UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549
                                    FORM 10-Q

(MARK ONE)

(X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2006

                                       OR

(    )  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(D) OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______

     COMMISSION FILE NUMBER 1-10596

                             ESCO TECHNOLOGIES INC.

             (Exact name of registrant as specified in its charter)


MISSOURI                                                             43-1554045
(State or other jurisdiction of                                (I.R.S. Employer
incorporation or organization)                              Identification No.)

9900A CLAYTON ROAD
ST. LOUIS, MISSOURI                                                  63124-1186
(Address of principal executive offices)                             (Zip Code)

       Registrant's telephone number, including area code: (314) 213-7200

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing requirements for the past 90 days.   Yes X      No

     Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large  accelerated  filer" in Rule 12b-2 of the  Exchange  Act. Large
accelerated filer X        Accelerated filer          Non-accelerated filer

     Indicate  by check mark  whether  the  registrant  is a shell  company  (as
defined in Rule 12b-2 of the Exchange Act). Yes      No X

     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest practicable date.

            Class                              Outstanding at January 31, 2007
            -----                              -------------------------------
[Common stock, $.01 par value per share]             25,890,425 shares





PART I.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                (Dollars in thousands, except per share amounts)

                                                Three Months Ended
                                                   December 31,
                                                   ------------

                                                 2006           2005
                                                ------         ------

Net sales                                     $  98,813          90,586
Costs and expenses:
   Cost of sales                                 71,344          63,986
    Selling, general and administrative
     expenses                                    29,384          23,487
    Amortization of intangible assets             2,137             513
    Interest (income) expense, net                 (338)           (717)
   Other (income) and expenses, net                (513)           (378)
                                                   -----           -----
     Total costs and expenses                   102,014          86,891
                                                -------          ------

(Loss) earnings before income taxes              (3,201)          3,695
Income tax (benefit) expense                     (1,820)          1,491
                                                 -------          -----
Net (loss) earnings                           $  (1,381)          2,204
                                                  =====           =====

(Loss) earnings per share:
    Basic                                     $   (0.05)           0.09
                                                   ====            ====

   Diluted                                    $   (0.05)           0.08
                                                   ====            ====

See accompanying notes to consolidated financial statements.





                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (Dollars in thousands)

                                          December 31,    September 30,
                                              2006             2006
                                              ----             ----
ASSETS                                     (Unaudited)
Current assets:
   Cash and cash equivalents                 $   27,998         36,819
   Accounts receivable, net                      75,430         83,816
   Costs and estimated earnings on
    long-term contracts, less progress
    billings of $12,063 and $4,405,
    respectively                                  1,208          1,345
   Inventories                                   55,292         50,984
   Current portion of deferred tax
    assets                                       24,921         24,251
   Other current assets                          11,296         10,042
                                                  ------        ------

       Total current assets                     196,145        207,257

Property, plant and equipment, net               69,227         68,754
Goodwill                                        143,399        143,450
Intangible assets, net                           61,658         59,202
Other assets                                      9,083         10,031
                                                  -----         ------

Total assets                                 $  479,512        488,694
                                                =======        =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Short-term borrowings and current
    maturities of long-term debt             $       -              -
   Accounts payable                              32,122         39,496
   Advance payments on long-term
    contracts, less costs
    incurred of $8,818 and $19,532,
    respectively                                  8,055          7,367
   Accrued salaries                              10,297         13,932
   Accrued other expenses                        20,105         15,100
                                                 ------         ------

       Total current liabilities                 70,579         75,895

Deferred revenue                                  3,997          7,458
Pension obligations                              13,138         13,143
Other liabilities                                14,556         15,764
Long-term debt                                         -             -
                                                -------        -------
       Total liabilities                        102,270        112,260
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 29,044,285 and
      29,030,995 shares, respectively               290            290
   Additional paid-in capital                   237,521        236,390
   Retained earnings                            191,665        193,046
   Accumulated other comprehensive loss          (1,051)        (2,070)
                                                 ------         ------
                                                428,425        427,656
   Less treasury stock, at cost:
    3,163,626 and 3,166,026 common
    shares, respectively                        (51,183)       (51,222)
                                                -------        -------
       Total shareholders' equity               377,242        376,434
                                                -------        -------

Total liabilities and shareholders'
 equity                                      $  479,512        488,694
                                             ==========        =======

See accompanying notes to consolidated financial statements.




                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                             (Dollars in thousands)

                                                    Three Months Ended
                                                       December 31,
                                                       ------------

                                                 2006               2005
                                                 ----               ----
Cash flows from operating activities:
    Net (loss) earnings                        $ (1,381)            2,204
    Adjustments  to  reconcile  net (loss)
     earnings  to net cash  provided  by
     operating activities:
       Depreciation and amortization              4,909             3,078
       Stock compensation expense                 1,486             1,273
       Changes in operating working capital       1,325              (532)
       Effect of deferred taxes                  (1,259)           (3,090)
       Change in deferred  revenue and
        costs, net                               (2,278)              285
       Other                                       (756)           (1,286)
                                                   ----            ------
          Net cash  provided by  operating
           activities                             2,046             1,932
Cash flows from investing activities:
    Acquisition of businesses, less cash acquired    -            (28,833)
    Capital expenditures                         (2,787)           (2,320)
    Additions to capitalized software            (8,344)           (5,724)
                                                 ------            ------
          Net cash used by  investing
           activities                           (11,131)          (36,877)
Cash flows from financing activities:
    Excess tax benefit from stock
     options exercised                               20               112
    Proceeds from exercise of stock options         301               267
    Other                                           (57)              441
                                                    ---               ---

          Net cash provided by
           financing activities                     264               820
                                                    ---               ---
Net decrease in cash and cash equivalents        (8,821)          (34,125)
Cash and cash equivalents, beginning of period   36,819           104,484
                                                 ------           -------

Cash and cash equivalents, end of period       $ 27,998          $ 70,359
                                               ========          ========


See accompanying notes to consolidated financial statements.






                     ESCO TECHNOLOGIES INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   BASIS OF PRESENTATION

The  accompanying   consolidated   financial  statements,   in  the  opinion  of
management,  include  all  adjustments,  consisting  only  of  normal  recurring
accruals,  necessary  for a fair  presentation  of the  results  for the interim
periods  presented.  The  consolidated  financial  statements  are  presented in
accordance with the  requirements  of Form 10-Q and  consequently do not include
all the disclosures required by accounting  principles generally accepted in the
United  States  of  America  (GAAP).  For  further   information  refer  to  the
consolidated  financial  statements  and related notes included in the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 2006.

The Company's  business is typically not impacted by seasonality,  however,  the
results for the  three-month  period ended December 31, 2006 are not necessarily
indicative of the results for the entire 2007 fiscal year.


2.   EARNINGS PER SHARE (EPS)

Basic EPS is  calculated  using the  weighted  average  number of common  shares
outstanding  during the period.  Diluted EPS is  calculated  using the  weighted
average  number of common  shares  outstanding  during  the period  plus  shares
issuable upon the assumed  exercise of dilutive common share options and vesting
of  performance-accelerated  restricted shares (restricted  shares) by using the
treasury stock method.  The number of shares used in the calculation of earnings
per share for each period presented is as follows (in thousands):

                                         Three Months Ended
                                            December 31,
                                            ------------

                                         2006          2005
                                         ----          ----
     Weighted Average Shares
     Outstanding - Basic                25,874        25,575
     Dilutive Options and
     Restricted Shares                      -            759
                                        ------        ------
     Adjusted Shares- Diluted           25,874        26,334
                                        ======        ======



     The  Company  incurred  a net loss in the first  quarter  of  fiscal  2007,
     therefore,  the dilutive options and restricted  shares are not included if
     the result would be antidilutive and therefore,  diluted EPS is computed in
     the same manner as basic EPS.  Options to purchase 574,418 shares of common
     stock at prices  ranging  from  $42.10 - $54.88  and  options  to  purchase
     166,420  shares of common stock at prices ranging from $38.85 - $50.26 were
     outstanding  during the three month  periods  ended  December  31, 2006 and
     2005, respectively, but were not included in the computation of diluted EPS
     because the options'  exercise  prices were greater than the average market
     price of the common shares.  The options expire at various  periods through
     2013.  Approximately  34,000  restricted  shares  were  excluded  from  the
     computation of diluted EPS based upon the application of the treasury stock
     method for the three-month period ended December 31, 2005.

3.   SHARE-BASED COMPENSATION

     The Company provides  compensation  benefits to certain key employees under
     several  share-based  plans  providing for employee  stock  options  and/or
     performance-accelerated  restricted  shares  (restricted  shares),  and  to
     non-employee directors under a non-employee directors compensation plan.

     Stock Option Plans
     ------------------
     The Company's  stock option awards are generally  subject to graded vesting
     over a three year service period.  All outstanding  options were granted at
     prices equal to fair market value at the date of grant. The options granted
     prior to September 30, 2003 have a ten-year  contractual  life from date of
     issuance,  expiring in various  periods  through 2013.  Beginning in fiscal
     2004, the options  granted have a five-year  contractual  life from date of
     issuance.  Beginning  with  fiscal  2006  awards,  the  Company  recognizes
     compensation  cost on a  straight-line  basis  over the  requisite  service
     period for the entire award.  Prior to fiscal 2006, the Company  calculated
     the pro forma  compensation  cost using the graded  vesting  method (FIN 28
     approach).

     The fair value of each option  award is  estimated  as of the date of grant
     using  a  Black-Scholes   option  pricing  model.   The  weighted   average
     assumptions for the periods indicated are noted below.  Expected volatility
     is based on  historical  volatility  of ESCO's  stock  calculated  over the
     expected term of the option. The expected term was calculated in accordance
     with Staff  Accounting  Bulletin  No. 107 using the  simplified  method for
     "plain-vanilla"  options.  The risk-free  rate for the expected term of the
     option is based on the U.S.  Treasury  yield curve in effect at the date of
     grant.

     The fair value of each option grant is estimated on the date of grant using
     the Black-Scholes  option-pricing model with the following weighted-average
     assumptions  used for grants in the three month period  ended  December 31,
     2006 and 2005, respectively: expected dividend yield of 0% in both periods;
     expected volatility of 27.2% and 28.6%; risk-free interest rate of 4.6% and
     4.5%; and expected term of 3.5 years for both periods. Pre-tax compensation
     expense  related  to the stock  option  awards  was $0.8  million  and $0.5
     million  for the  three-month  periods  ended  December  31, 2006 and 2005,
     respectively.

     Information  regarding  stock options  awarded under the option plans is as
     follows:



                                                                     Weighted-
                                                    Aggregate         Average
                                                    Intrinsic        Remaining
                                        Weighted      Value         Contractual
                           Shares       Avg. Price  (in millions)      Life
                           ------       ----------  -------------      ----
     Outstanding at
     October 1, 2006     1,387,348       $26.60

     Granted               284,780       $45.76

     Exercised             (14,381)      $24.28        $0.3

     Cancelled              (3,168)      $41.36
                             ------      ------

     Outstanding at
     December 31, 2006   1,654,579       $29.89        $26.2        3.7 years
                         =========        =====

     Exercisable at
     December 31, 2006     979,281       $21.14        $23.8
                           =======        =====


     The  weighted-average  grant-date  fair value of options granted during the
     three-month  period ended December 31, 2006 and 2005 was $12.25 and $11.74,
     respectively.

     Performance-accelerated Restricted Share Awards
     -----------------------------------------------

     The performance-accelerated restricted shares (restricted shares) vest over
     five years with  accelerated  vesting if certain  performance  targets  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 all
     outstanding  restricted  share awards is being  recognized over the shorter
     performance period as it is probable the performance condition will be met.
     The  restricted  share  award  grants were valued at the stock price on the
     date of grant. Pre-tax compensation expense related to the restricted share
     awards was $0.5 million and $0.6 million for the three-month  periods ended
     December 31, 2006 and 2005, respectively.

     The following summary presents information regarding outstanding restricted
     share  awards as of December  31, 2006 and changes  during the  three-month
     period then ended:



                                                                Weighted
                                             Shares            Avg. Price

     Nonvested at October 1, 2006            155,730             $34.33
     Granted                                  62,030             $45.69
                                              ------             ------
     Nonvested at December 31, 2006          217,760             $37.56
                                             =======             ======


     Non-Employee Directors Plan
     ---------------------------
     Pursuant to the non-employee directors compensation plan, each non-employee
     director  receives a retainer  of 800 common  shares per  quarter.  Pre-tax
     compensation  expense related to the non-employee  director grants was $0.2
     million and $0.2 million for the  three-month  periods  ended  December 31,
     2006 and 2005, respectively.

     The total share-based compensation cost that has been recognized in results
     of  operations  and included  within SG&A was $1.5 million and $1.3 million
     for the three-month periods ended December 31, 2006 and 2005, respectively.
     The total  income tax  benefit  recognized  in results  of  operations  for
     share-based compensation arrangements was $0.4 million and $0.4 million for
     the three-month periods ended December 31, 2006 and 2005, respectively.  As
     of  December  31,  2006,  there was  $13.6  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 3.5
     years.


4.    INVENTORIES
     Inventories consist of the following (in thousands):
                                                    December 31,   September 30,
                                                        2006            2006
                                                        ----            ----

     Finished goods                                    $  15,971        12,834
     Work in process, including long-term
     contracts                                            14,343        13,211
     Raw materials                                        24,978        24,939
                                                          ------        ------
          Total inventories                            $  55,292        50,984
                                                       =========        ======


5.   COMPREHENSIVE (LOSS) INCOME

     Comprehensive  (loss) income for the three-month periods ended December 31,
     2006 and 2005 was $(0.4)  million and $1.5 million,  respectively.  For the
     three-month  period ended  December 31, 2006,  the Company's  comprehensive
     loss was positively impacted by foreign currency translation adjustments of
     $1.0  million.  For the  three-month  period ended  December 31, 2005,  the
     Company's  comprehensive income was negatively impacted by foreign currency
     translation adjustments of $0.7 million.


6.   BUSINESS SEGMENT INFORMATION

     The Company is organized based on the products and services that it offers.
     Under  this  organizational   structure,  the  Company  operates  in  three
     segments: Communications, Filtration/Fluid Flow and Test. The components of
     the Filtration/Fluid Flow segment are presented separately due to differing
     long-term economics.

     Management evaluates and measures the performance of its operating segments
     based on "Net Sales" and  "EBIT",  which are  detailed in the table  below.
     EBIT is defined as earnings from continuing  operations before interest and
     taxes.

        ($ in thousands)                 Three Months ended
                                            December 31,
                                            ------------

      NET SALES                   2006                         2005
      ---------                   ----                         ----
      Communications            $ 30,034                       19,133

      PTI                         11,619                       10,697
      VACCO                        6,681                        8,054
      Filtertek                   22,277                       22,695
                                  ------                       ------
      Filtration/Fluid Flow       40,577                       41,446


      Test                        28,202                       30,007
                                  ------                       ------
      Consolidated totals       $ 98,813                       90,586
                                ========                       ======

      EBIT
      ----
      Communications              (2,782)                        (959)

      PTI                          1,103                        1,199
      VACCO                          338                        1,891
      Filtertek                      376                          997
      Filtration/Fluid Flow        1,817                        4,087
                                   -----                        -----

      Test                         2,143                        2,916

      Corporate                   (4,717)                      (3,066)
                                  ------                       ------
      Consolidated EBIT           (3,539)                       2,978
      Add: Interest income           338                          717
                                     ---                          ---
      Earnings (loss)
      before income taxes       $ (3,201)                       3,695
                                ========                        =====


7.   RETIREMENT AND OTHER BENEFIT PLANS

     A summary of net periodic benefit expense for the Company's defined benefit
     plans and postretirement  healthcare and other benefits for the three-month
     periods ended December 31, 2006 and 2005 are shown in the following tables.
     Net  periodic  benefit  cost for each period  presented is comprised of the
     following:

                                            Three Months Ended
                                                December 31,
                                                ------------
     (Dollars in thousands)                  2006          2005
                                             ----          ----
     Defined benefit plans
          Interest cost                    $  688           650
          Expected return on assets          (700)         (675)
     Amortization of:
             Prior service cost                 2            -
          Actuarial loss                       98           125
                                               --           ---
     Net periodic benefit cost             $   88           100
                                               ==           ===


Net  periodic  postretirement  (retiree  medical)  benefit  cost for each period
presented is comprised of the following:

                                      Three Months Ended
                                         December 31,
                                         ------------
     (Dollars in thousands)           2006           2005
                                      ----           ----
     Service cost                    $  10              9
     Interest cost                      12             10
     Prior service cost                 (1)            -

     Amortization  of  actuarial
      gain                             (11)            (9)
                                       ---             --
     Net periodic postretirement
      benefit cost                   $  10             10
                                        ==             ==


8.   RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS


     In September 2006, the FASB issued SFAS No. 158, "Employer's Accounting for
     Defined Benefit Pension and Other  Postretirement  Plans" (SFAS 158), which
     amends SFAS 87 and SFAS 106 to require  recognition  of the  overfunded  or
     underfunded status of pension and other postretirement benefit plans on the
     balance sheet.  Under SFAS 158,  gains and losses,  prior service costs and
     credits,  and any remaining  transition  amounts under SFAS 87 and SFAS 106
     that have not yet been recognized through net periodic benefit cost will be
     recognized in accumulated other  comprehensive  income, net of tax effects.
     The  measurement  date - the date at which the benefit  obligation and plan
     assets are  measured - is required  to be the  Company's  fiscal  year-end,
     which is the date the Company  currently  uses.  SFAS 158 is effective  for
     publicly-held  companies  for fiscal years ending after  December 15, 2006.
     The adoption of SFAS 158 is not  expected to have a material  impact to the
     Company's financial position or results of operations.

     In June 2006, the FASB issued FASB  Interpretation  No. 48, "Accounting for
     Uncertainty in Income Taxes, an  Interpretation of FASB Statement No. 109."
     This Interpretation is effective for the Company beginning October 1, 2007.
     This  Interpretation  prescribes a recognition  threshold  and  measurement
     process for the financial  statement  recognition  and measurement of a tax
     position  taken or  expected  to be taken in a tax  return.  The Company is
     currently  evaluating  the  adoption  of this  Interpretation  and does not
     currently  have an  estimate  of the impact on the  consolidated  financial
     statements.


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS

The  following  discussion  refers  to the  Company's  results  from  continuing
operations,  except where noted.  References  to the first  quarters of 2006 and
2005   represent  the  fiscal   quarters  ended  December  31,  2006  and  2005,
respectively.

NET SALES

Net sales  increased  $8.2  million,  or 9.1%,  to $98.8  million  for the first
quarter of 2007 from $90.6 million for the first quarter of 2006 due to the 2006
acquisitions of Hexagram and Nexus.  Favorable  foreign currency values resulted
in  approximately  $1.1 million of the sales increase  realized  during the 2007
first quarter.

- -Communications
- ---------------
Net sales  increased  $10.9  million,  or 57.1%,  to $30.0 million for the first
quarter  of 2007 from $19.1  million  for the first  quarter of 2006.  The sales
increase in the first  quarter of 2007 as compared to the prior year quarter was
due to:  $7.6  million  in sales from  Hexagram;  an  increase  in sales of $2.4
million  from  Nexus  (due to a full  quarter  of sales  compared  to one  month
included in prior year quarter);  an additional  $0.8 million of sales of DCSI's
automatic  meter reading  (AMR)  products to COOP  customers and  investor-owned
utilities (IOUs); and $0.1 million of higher shipments of Comtrak's SecurVision
video security products.  In the first quarter of 2007, DCSI's sales to COOP and
public power (Municipal)  customers were $11.7 million compared to $11.4 million
in the first quarter of 2006.

Sales of SecurVision products were $2.6 million for the first quarter of 2007 as
compared to $2.5 million for the prior year first quarter.

- -Filtration/Fluid Flow
- ----------------------
Net sales  decreased  $0.9  million,  or 2.2%,  to $40.6  million  for the first
quarter  of 2007 from $41.5  million  for the first  quarter of 2006.  The sales
decrease  during the fiscal  quarter ended  December 31, 2006 as compared to the
prior year  quarter is mainly  due to: a  decrease  in defense  spares and T-700
shipments at VACCO of $1.4  million;  a net sales  decrease at Filtertek of $0.4
million  driven  by lower  automotive  shipments;  partially  offset  by  higher
commercial aerospace shipments at PTI of $0.9 million.

- -Test
- -----

For the first quarter of 2007, net sales of $28.2 million were $1.8 million,  or
6.0%, lower than the $30.0 million of net sales recorded in the first quarter of
fiscal 2006.  The sales decrease in the first quarter of 2007 as compared to the
prior year quarter was mainly due to: a $1.5 million  decrease in net sales from
the Company's  European  operations  due to the timing of test chamber  sales; a
$1.0 million decrease in net sales from the Company's U.S.  operations driven by
the timing of sales of test chambers and components;  partially offset by a $0.7
million increase in net sales from the Company's Asian operations due to several
chamber  projects  in  Japan.  Approximately  $3  million  of test  chamber  and
component  sales were delayed due to site readiness  issues  ("parent  building"
general contracting delays) at several locations.

ORDERS AND BACKLOG
Backlog was $300.9  million at December 31, 2006 compared with $253.4 million at
September 30, 2006. The Company  received new orders  totaling $146.3 million in
the first  quarter of 2007  compared to $126.1  million  ($117.1  million of new
orders and $9.0 million of Nexus  acquired  backlog) in the prior year  quarter.
New orders of $61.8  million were  received in the first quarter of 2007 related
to  Communications  products,  $45.3 million  related to  Filtration/Fluid  Flow
products and $39.3 million related to Test products. Significant orders received
in the first quarter of 2007 included:  $15.5 million of orders from Pacific Gas
& Electric (PG&E) mentioned below; a $6.3 million  automotive test chamber order
in India; a $3.4 million aerospace  filtration order with Boeing; a $1.0 million
chamber  order in  Korea;  and a $1.0  million  chamber  order in Canada to test
handheld communications devices

In  November  2005,  DCSI  signed an  agreement  with  PG&E with an  anticipated
contract value of up to  approximately  $310 million covering up to five million
endpoints over a five year deployment  period beginning in fiscal 2007. Also, in
November 2005, Hexagram entered into an agreement to provide equipment, software
and  services  to PG&E in  support  of the gas  utility  portion  of PG&E's  AMI
project.  The total anticipated  contract revenue from commencement  through the
five-year  full  deployment  for this Hexagram  contract is expected to be up to
approximately  $225 million.  The Company received orders totaling $15.5 million
from PG&E under these agreements during the first quarter of fiscal 2007.

New orders of $59.2  million were  received in the first quarter of 2006 related
to  Communications  products  (including  the $9.0  million  of  Nexus  acquired
backlog),  $41.1  million  related to  Filtration/Fluid  Flow products and $25.8
million related to Test products.

AMORTIZATION OF INTANGIBLE ASSETS
Amortization  of  intangible  assets was $2.1  million and $0.5  million for the
three-month periods ended December 31, 2006 and 2005, respectively. Amortization
of intangible  assets for the  three-month  periods ended  December 31, 2006 and
2005, included $0.7 million and $0.1 million,  respectively,  of amortization of
acquired intangible assets related to the Nexus and Hexagram  acquisitions.  The
amortization  of acquired  intangible  assets  related to Nexus and Hexagram are
included in Corporate's operating results, see "EBIT - Corporate". The remaining
amortization expenses consist of other identifiable intangible assets (primarily
software,  patents and licenses).  During the three-month periods ended December
31, 2006 and 2005, the Company recorded $0.9 million and zero, respectively,  of
amortization related to DCSI's TNG capitalized software.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling,  general and  administrative  (SG&A)  expenses for the first quarter of
2007 were $29.4 million (29.7% of net sales), compared with $23.5 million (25.9%
of net sales) for the prior year  quarter.  The increase in SG&A spending in the
quarter  ended  December  31,  2006 as  compared  to the prior year  quarter was
primarily due to: $2.8 million of SG&A expenses related to Hexagram; an increase
of $1.9 million in SG&A expenses related to Nexus (due to a full quarter of SG&A
expenses compared to one month included in the prior year quarter); $0.8 million
of sales and marketing  expenses  incurred in the Test segment to further expand
its Asian presence; and $0.4 million increase at Corporate due to an increase in
professional fees incurred to support a research tax credit project.


OTHER (INCOME) AND EXPENSES, NET
Other  income,  net, was $0.5 million for the first  quarter of 2007 compared to
$0.4 million for the prior year quarter.  Principal  components of other income,
net, for the first quarter of 2007 included $0.6 million of royalty income.  The
principal  components of other income, net, for the first quarter of fiscal 2006
included the following items:  $0.6 million of royalty income;  partially offset
by  a  $0.2  million  charge  related  to  the   termination  of  a  subcontract
manufacturer.

EBIT
The Company  evaluates the performance of its operating  segments based on EBIT,
defined below. EBIT was $(3.5) million (3.6% of net sales) for the first quarter
of 2007 and $3.0 million (3.3% of net sales) for the first quarter of 2006.  The
decrease  in EBIT for the first  quarter of 2007 as  compared  to the prior year
period is primarily due to the decrease in margins in the Communications segment
described below.

This Form 10-Q contains the financial measure "EBIT", which is not calculated in
accordance with generally accepted accounting principles in the United States of
America  (GAAP).  EBIT provides  investors and  Management  with an  alternative
method for assessing the Company's operating results. The Company defines "EBIT"
as earnings from continuing  operations  before  interest and taxes.  Management
evaluates the  performance of its operating  segments based on EBIT and believes
that EBIT is useful to investors to demonstrate the operational profitability of
the  Company's  business  segments by excluding  interest  and taxes,  which are
generally  accounted for across the entire Company on a consolidated basis. EBIT
is also one of the measures  Management uses to determine  resource  allocations
within the Company and incentive  compensation.  The following  table presents a
reconciliation of EBIT to net (loss) earnings.

                                   Three Months ended
($ in thousands)                       December 31,
                                       ------------

                                  2006              2005
                                  ----              ----

EBIT                          $ (3,539)            2,978
Add: Interest income               338               717
Income taxes                    (1,820)            1,491
                                ------             -----
Net (loss) earnings           $ (1,381)            2,204
                                 =====             =====


- -Communications
- ---------------
EBIT in the first  quarter of 2007 was a loss of $(2.8)  million  compared  to a
loss of $(1.0) million in the prior year quarter.  The  additional  loss for the
first  quarter  of 2007  was due to:  a $1.7  million  increase  in loss at DCSI
resulting  from the  amortization  expenses of its TNG software and PG&E related
program support costs; a $0.3 million loss at Hexagram due to development  costs
incurred  on new  products;  a $0.2  million  increase  in loss at Nexus  due to
additional  SG&A  spending  related to  marketing  and new product  initiatives;
partially offset by an EBIT contribution of $0.3 million at Comtrak. The Company
does not expect an EBIT loss in the  Communications  segment to continue  during
the remainder of fiscal 2007 due to the projected increase in sales supported by
the orders received during the first quarter of 2007.

- -Filtration/Fluid Flow
- ----------------------
EBIT was $1.8 million  (4.5% of net sales) and $4.1 million  (9.9% of net sales)
in the first quarters of 2007 and 2006,  respectively.  For the first quarter of
2007 as compared to the prior year quarter,  EBIT decreased $2.3 million due to:
a $1.6  million  decrease at VACCO due to lower  defense  spares  shipments  and
additional  engineering costs on new Space programs;  a $0.6 million decrease at
Filtertek due to lower sales volumes and higher raw material  costs;  and a $0.1
million  decrease at PTI resulting from changes in sales mix and higher material
costs.

- -Test
- -----
EBIT in the  first  quarter  of 2007 was $2.1  million  (7.6% of net  sales)  as
compared to $2.9  million  (9.7% of net sales) in the prior year  quarter.  EBIT
decreased  $0.8  million as  compared  to the prior year  quarter  due to timing
delays in  chamber  projects,  reduced  component  sales,  additional  sales and
marketing costs to support  near-term sales growth  opportunities  and increased
material costs.

- -Corporate
- ----------
Corporate  costs  included in EBIT were $4.7  million  and $3.1  million for the
three-month periods ended December 31, 2006 and 2005, respectively. The increase
in  Corporate  costs in the first  quarter of 2007 as compared to the prior year
quarter was due to: $0.6 million of additional pre-tax  amortization of acquired
intangible  assets  related to Nexus and  Hexagram;  $0.4 million of  additional
professional  fees  incurred  to support a research  tax  credit  project;  $0.2
million of additional expense related to stock compensation,  and an increase in
headcount.  In the first quarter of 2007,  Corporate costs included $1.5 million
of pre-tax stock compensation  expense and $0.7 million of pre-tax  amortization
of acquired intangible assets related to Nexus and Hexagram.

INTEREST INCOME, NET
Interest  income,  net, was $0.3  million and $0.7  million for the  three-month
periods ended December 31, 2006 and 2005, respectively. The decrease in interest
income in the first  quarter of 2007 as compared  to the prior year  quarter was
due to lower average cash balances on hand.

INCOME TAX EXPENSE
The first quarter 2007 effective income tax rate was a benefit of 56.9% compared
to an expense of 40.4 % in the first  quarter of 2006.  The first  quarter  2007
income tax benefit was favorably  impacted by a $0.9 million,  net, research tax
credit.  The effect of the  research  tax credit  positively  impacted the first
quarter 2007 rate by 27.9%. The first quarter 2007 rate was unfavorably impacted
by 8.5% due to additional  state and foreign tax  liabilities and by 1.9% due to
non-deductible  stock option expense related to foreign  optionees.  The Company
estimates the fiscal 2007 tax rate to be approximately 39%.

In December 2006, the President  signed into law the "Tax Relief and Health Care
Act of 2006" (The Act).  The Act extended the  expiration  date for the research
tax credit from December 31, 2005 to December 31, 2007.  The Company  expects an
additional  research  credit claim of  approximately  $1.0  million,  net, to be
recorded for the year ending September 30, 2007.

CAPITAL RESOURCES AND LIQUIDITY
Working capital  (current assets less current  liabilities)  decreased to $125.6
million at December 31, 2006 from $131.4 million at September 30, 2006. Accounts
receivable decreased by $8.4 million in the first quarter of 2007, of which $6.3
million related to DCSI due to customer collections; and $2.9 million related to
the  Filtration  segment  due to timing  and volume of sales.  The $4.3  million
increase in  inventories  at December  31, 2006 is mainly due to a $3.4  million
increase within the Communications  segment due to the timing of expected sales.
Accounts  payable  decreased  by $7.4 million in the first  quarter of 2007,  of
which $3.2 million related to DCSI due to timing of vendor payments.

Net cash provided by operating  activities was $2.0 million and $1.9 million for
the three-month periods ended December 31, 2006 and 2005, respectively.

In  December  2006,  DCSI signed an  agreement  with an  additional  independent
manufacturer to produce and supply a significant portion of DCSI's end-products.

Capital  expenditures were $2.8 million and $2.3 million in the first quarter of
fiscal 2007 and 2006,  respectively.  Major  expenditures  in the current period
included manufacturing equipment used in the Filtration/Fluid Flow businesses.

At December 31, 2006,  intangible  assets,  net, of $61.7 million included $48.5
million of capitalized software.  Approximately $42.6 million of the capitalized
software  balance  represents  software  development  costs on the TNG  software
within the  Communications  segment to further penetrate the IOU market.  TNG is
being deployed to efficiently  handle the  additional  levels of  communications
dictated by the size of the service  territories and the frequency of reads that
are required under  time-of-use  or critical peak pricing  scenarios to meet the
requirements of large IOUs. At December 31, 2006, the Company had  approximately
$8 million of commitments related to the development of TNG version 2.0 which is
expected  to be spent over the next seven  months.  Amortization  of TNG is on a
straight-line  basis  over  seven  years and began in March  2006.  The  Company
recorded  $0.9  million  in  amortization  expense  related  to TNG in the first
quarter of 2007.

The closure and  relocation of the Filtertek  Puerto Rico facility was completed
in March 2004. The Puerto Rico facility is included in other current assets with
a carrying  value of $3.6 million at December  31,  2006.  The facility is being
marketed for sale.

In October 2004,  the Company  entered into a $100 million  five-year  revolving
bank  credit  facility  with a $50  million  increase  option  that  has a final
maturity and  expiration  date of October 6, 2009.  At December  31,  2006,  the
Company had  approximately  $99.2  million  available to borrow under the credit
facility in addition to $28.0  million cash on hand.  At December 31, 2006,  the
Company had no  borrowings,  and  outstanding  letters of credit of $2.2 million
($0.8 million outstanding under the credit facility).  Cash flow from operations
and borrowings under the Company's bank credit facility are expected to meet the
Company's capital requirements and operational needs for the foreseeable future.

Pacific Gas & Electric
- ----------------------
In November 2005,  DCSI entered into a contract to provide  equipment,  software
and services to Pacific Gas & Electric (PG&E) in support of the electric portion
of PG&E's Advanced  Metering  Infrastructure  (AMI) project.  PG&E's current AMI
project plan calls for the purchase of TWACS communication  equipment for up to
approximately  five million electric customers over a five-year period after the
commencement  of full  deployment.  The total  anticipated  contract  value from
commencement  through the five-year full deployment  period is expected to be up
to approximately  $310 million.  PG&E also has the right to purchase  additional
equipment and services to support existing and new customers  through the twenty
year  term of the  contract.  Equipment  will be  purchased  by PG&E  only  upon
issuance of purchase  orders and release  authorizations.  PG&E will continue to
have the right to purchase  products or services  from other  suppliers  for the
electric  portion of the AMI project.  On July 20, 2006, the  California  Public
Utilities Commission approved PG&E's AMI project.  DCSI has agreed to deliver to
PG&E versions of its newly  developed TNG software as they become  available and
are  tested.  Delivery  of the final  version  for which DCSI has  committed  is
currently  anticipated in the fourth quarter of fiscal 2007. In accordance  with
U.S. generally accepted accounting standards, the Company will defer all revenue
related to the DCSI  arrangement  until all software is delivered and acceptance
criteria  have been met. The contract  provides  for  liquidated  damages in the
event of DCSI's late  development  or delivery of  hardware  and  software,  and
includes  indemnification  and other customary  provisions.  The contract may be
terminated by PG&E for default,  for its convenience and in the event of a force
majeure lasting beyond certain  prescribed  periods.  The Company has guaranteed
the obligations of DCSI under the contract.  If PG&E terminates the contract for
its convenience, DCSI will be entitled to recover certain costs.

In  November  2005,  Hexagram  entered  into a contract  to  provide  equipment,
software  and  services to PG&E in support of the gas utility  portion of PG&E's
AMI project.  The total anticipated  contract revenue from commencement  through
the  five-year  full  deployment  is  expected  to be up to  approximately  $225
million.  As with DCSI's  contract with PG&E,  equipment  will be purchased only
upon  issuance of  purchase  orders and  release  authorizations,  and PG&E will
continue to have the right to purchase products or services from other suppliers
for the gas utility portion of the AMI project. On July 20, 2006, the California
Public Utilities  Commission approved PG&E's AMI project.  The contract provides
for liquidated damages in the event of late deliveries, includes indemnification
and other customary  provisions,  and may be terminated by PG&E for default, for
its  convenience  and in the event of a force  majeure  lasting  beyond  certain
prescribed  periods.  The Company has guaranteed the performance of the contract
by Hexagram.

CRITICAL ACCOUNTING POLICIES
Management has evaluated the accounting  policies used in the preparation of the
Company's financial  statements and related notes and believes those policies to
be reasonable and appropriate.  Certain of these accounting policies require the
application  of  significant  judgment by  Management  in selecting  appropriate
assumptions  for  calculating  financial  estimates.   By  their  nature,  these
judgments are subject to an inherent degree of uncertainty.  These judgments are
based on historical experience, trends in the industry,  information provided by
customers and information  available from other outside sources, as appropriate.
The most significant areas involving  Management  judgments and estimates may be
found in the Critical Accounting Policies section of Management's Discussion and
Analysis and in Note 1 to the Consolidated Financial Statements contained in the
Company's  Annual  Report on Form 10-K for the fiscal year ended  September  30,
2006 at Exhibit  13, as  supplemented  by Note 2 to the  Consolidated  Financial
Statements in Item 1 hereof.

OTHER MATTERS

Contingencies

As a normal incident of the businesses in which the Company is engaged,  various
claims, charges and litigation are asserted or commenced against the Company. In
the opinion of  Management,  final  judgments,  if any,  which might be rendered
against the Company in current  litigation are adequately  reserved,  covered by
insurance,  or  would  not  have a  material  adverse  effect  on its  financial
statements.


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In September  2006,  the FASB issued SFAS No. 158,  "Employer's  Accounting  for
Defined Benefit Pension and Other Postretirement Plans" (SFAS 158), which amends
SFAS 87 and SFAS 106 to require  recognition  of the  overfunded or  underfunded
status of pension and other  postretirement  benefit plans on the balance sheet.
Under SFAS 158,  gains and losses,  prior  service  costs and  credits,  and any
remaining  transition  amounts under SFAS 87 and SFAS 106 that have not yet been
recognized  through net periodic  benefit cost will be recognized in accumulated
other comprehensive  income, net of tax effects. The measurement date - the date
at which the benefit obligation and plan assets are measured - is required to be
the Company's  fiscal  year-end,  which is the date the Company  currently uses.
SFAS 158 is effective for publicly-held  companies for fiscal years ending after
December 15,  2006.  The adoption of SFAS 158 is not expected to have a material
impact to the Company's financial position or results of operations.


In June 2006,  the FASB  issued  FASB  Interpretation  No. 48,  "Accounting  for
Uncertainty in Income Taxes, an  Interpretation of FASB Statement No. 109." This
Interpretation  is effective  for the Company  beginning  October 1, 2007.  This
Interpretation  prescribes a recognition  threshold and measurement  process for
the financial  statement  recognition and measurement of a tax position taken or
expected to be taken in a tax return.  The Company is currently  evaluating  the
adoption of this  Interpretation  and does not currently have an estimate of the
impact on the consolidated financial statements.


FORWARD LOOKING STATEMENTS

Statements in this report that are not strictly historical are "forward looking"
statements  within the  meaning of the safe  harbor  provisions  of the  federal
securities  laws.  Forward  looking  statements  include  those  relating to the
estimates  or  projections  made in  connection  with the  Company's  accounting
policies,  SFAS 158,  FASB  Interpretation  No. 48,  annual  effective tax rate,
research  tax  credits,   timing  of  Communications   segment  commitments  and
expenditures,  outcome  of  current  claims and  litigation,  future  cash flow,
capital  requirements  and  operational  needs for the foreseeable  future,  the
ultimate  values and timing of revenues  under the DCSI / PG&E  contract and the
Hexagram / PG&E  contract,  the start of  deployment  under the  Company's  PG&E
contracts,  the future  delivery and acceptance of the TNG software by PG&E, and
timing of  spending  for TNG  commitments.  Investors  are  cautioned  that such
statements are only  predictions,  and speak only as of the date of this report.
The  Company's  actual  results in the future may differ  materially  from those
projected in the forward-looking  statements due to risks and uncertainties that
exist in the Company's  operations and business environment  including,  but not
limited to: actions by PG&E's Board of Directors and PG&E's management impacting
PG&E's  AMI  projects;  the timing and  success of DCSI's  software  development
efforts;  the timing  and  content  of  purchase  order  releases  under  PG&E's
contracts;  the  Company's  successful  performance  under  the PG&E  contracts;
weakening of economic conditions in served markets;  changes in customer demands
or customer insolvencies;  competition; intellectual property rights; successful
execution of the planned sale of the Company's  Puerto Rico  facility;  material
changes  in the costs of  certain  raw  materials  including  steel,  copper and
petroleum based resins;  delivery  delays or defaults by customers;  termination
for convenience of customer  contracts;  timing and magnitude of future contract
awards;  performance  issues with key suppliers,  customers and  subcontractors;
collective  bargaining  and  labor  disputes;  changes  in laws and  regulations
including  changes in  accounting  standards  and taxation  requirements;  costs
relating to environmental  matters;  litigation  uncertainty;  and the Company's
successful execution of internal operating plans.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to the Company's  operations result primarily from changes
in interest rates and changes in foreign currency exchange rates. There has been
no material change to the Company's market risks since September 30, 2006. Refer
to the Company's  Annual Report on Form 10-K for the fiscal year ended September
30, 2006 for further discussion about market risk.


ITEM 4.       CONTROLS AND PROCEDURES


The  Company  carried  out an  evaluation,  under the  supervision  and with the
participation of Management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as of the end of the period covered
by this  report.  Based upon that  evaluation,  the  Company's  Chief  Executive
Officer and Chief  Financial  Officer  concluded  that the Company's  disclosure
controls and procedures were effective as of that date.  Disclosure controls and
procedures  are  controls  and  procedures  that are  designed  to  ensure  that
information required to be disclosed in Company reports filed or submitted under
the Securities Exchange Act of 1934 (the "Exchange Act") is recorded, processed,
summarized and reported within the time periods  specified in the Securities and
Exchange Commission's rules and forms. There has been no change in the Company's
internal  control over financial  reporting (as defined in Rule 13a-15(f)  under
the Exchange Act) during the period  covered by this report that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.


                            PART II OTHER INFORMATION


ITEM 2.       UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

In August  2006,  the  Company's  Board of Directors  authorized  an open market
common stock repurchase program for up to 1.2 million shares,  subject to market
conditions  and other  factors,  which covers the period  through  September 30,
2008.  There were no stock  repurchases  during  the  three-month  period  ended
December 31, 2006.



ITEM 6.       EXHIBITS

a)   Exhibits

     Exhibit
     Number

        3.1    Restated Articles of         Incorporated by reference to
               Incorporation                Form 10-K for the fiscal year
                                            ended September 30, 1999, at
                                            Exhibit 3(a)

        3.2    Amended Certificate of       Incorporated by reference to
               Designation Preferences      Form 10-Q for the fiscal
               and Rights of Series A       quarter ended March 31, 2000,
               Participating Cumulative     at Exhibit 4(e)
               Preferred Stock of the
               Registrant

        3.3    Articles of Merger           Incorporated by reference to
               effective July 10, 2000      Form 10-Q for the fiscal
                                            quarter ended June 30, 2000,
                                            at Exhibit 3(c)

        3.4    Bylaws, as amended and       Incorporated by reference to
               restated as of July 10,      Form 10-K for the fiscal year
               2000.                        ended September 30, 2003, at
                                            Exhibit 3.4

        3.5    Amendment to Bylaws
               effective as of February
               2, 2007.

        4.1    Specimen Common Stock        Incorporated by reference to
               Certificate                  Form 10-Q for the fiscal
                                            quarter ended June 30, 2000,
                                            at Exhibit 4(a)

        4.2    Specimen Rights              Incorporated by reference to
               Certificate                  Current Report on Form 8-K
                                            dated February 3, 2000, at
                                            Exhibit B to Exhibit 4.1

        4.3    Rights Agreement dated       Incorporated by reference to
               as of September 24, 1990     Current Report on Form 8-K
               (as amended and Restated     dated February 3, 2000, at
               as of February 3, 2000)      Exhibit 4.1
               between the Registrant
               and Registrar and
               Transfer Company, as
               successor  Rights Agent

        4.4    Credit Agreement dated       Incorporated by reference to
               as of October 6, 2004        Form10-K for the fiscal year
               among the Registrant,        ended September 30, 2004, at
               Wells Fargo Bank, N.A.,      Exhibit 4.4
               as agent, and the
               lenders listed therein

         4.5   Consent and waiver to        Incorporated by reference to
               Credit Agreement (listed     Current Report on Form 8-K
               as 4.4, above) dated as      dated February 2, 2006 at
               of January 20, 2006          Exhibit 4.1

        31.1   Certification of Chief
               Executive Officer
               relating to Form 10-Q
               for period ended
               December 31, 2006

        31.2   Certification of Chief
               Financial Officer
               relating to Form 10-Q
               for period ended
               December 31, 2006

         32    Certification of Chief
               Executive Officer and
               Chief Financial Officer
               relating to Form 10-Q
               for period ended
               December 31, 2006


SIGNATURE

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                               ESCO TECHNOLOGIES INC.

                               /s/ Gary E. Muenster
                               Gary E. Muenster
                               Senior Vice President and Chief Financial
                               Officer
                               (As duly authorized officer and principal
                               accounting officer of the registrant)





Dated:   February 8, 2007