SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): May 13, 2003
ESCO TECHNOLOGIES INC.
(Exact Name of Registrant as Specified in Charter)
Missouri 1-10596 43-1554045
(State or Other (Commission (I.R.S. Employer
Jurisdiction of Incorporation) File Number) Identification No.)
8888 Ladue Road, Suite 200, St. Louis, Missouri 63124-2056
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: 314-213-7200
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Description of Exhibit
99.1 Press Release dated May 13, 2003
ITEM 9. REGULATION FD DISCLOSURE (INFORMATION PROVIDED UNDER ITEM 12. RESULTS OF
OPERATIONS AND FINANCIAL CONDITION)
Operations and Financial Information Furnished
On May 13, 2003, the Company issued a press release announcing its fiscal second
quarter 2003 financial and operating results. This press release is furnished as
Exhibit 99.1, and incorporated herein by reference.
In addition, the Company announced in a press release issued on May 2, 2003 that
a webcast of a second quarter conference call would be held on May 13, 2003.
The press release furnished herewith will be posted to the Company's website
located at http://www.escotechnologies.com and can be viewed through the
Investor Relations page of the website under the tab "Press Releases", although
the Company reserves the right to discontinue that availability at any time.
Non-GAAP Financial Measures
The press release furnished herewith contains financial measures and financial
terms not calculated in accordance with generally accepted accounting principles
in the United States of America ("GAAP") in order to provide investors and
management with an alternative method for assessing the Company's operating
results in a manner that is focused on the performance of the Company's ongoing
operations. The Company has provided definitions below for the non-GAAP
financial measures utilized in the press release, together with an explanation
of why management uses these measures, and why management believes that these
non-GAAP financial measures are useful to investors. The press release uses the
non-GAAP financial measures of "Net earnings excluding the after-tax charges
relating to the MSA and MTA," "EBIT from continuing operations," "EBIT excluding
the after-tax charges relating to the MSA and MTA," "Free cash flow," and
"EBITDA from continuing operations."
The Company defines "Net earnings excluding the after-tax charges relating to
the MSA and MTA" as net earnings excluding the special items described in the
press release. These special items comprise a one-time charge resulting from the
termination of a Manufacturing and Supply Agreement (MSA) with Whatman HemaSure
Inc., and costs resulting from the Management Transition Agreement between the
Company and its former Chairman (MTA). The Company's management uses this
information in evaluating the results of the continuing operations of the
Company and believes that this information provides investors with better
insight into the period over period financial performance of the Company.
The Company defines "EBIT from continuing operations" as earnings before
interest and taxes. The Company's management evaluates the performance of its
operating segments based on EBIT from continuing operations and believes that
EBIT from continuing operations 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 from continuing operations is also one of the
measures used by management in determining resource allocations within the
Company and incentive compensation.
"EBIT excluding the after-tax charges relating to the MSA and MTA": The Company
calculates this non-GAAP financial measure as EBIT of the Company's business
operations for the respective period, excluding the special items described
above in the discussion of "Net earnings excluding the after-tax charges
relating to the MSA and MTA." The Company's management uses this information in
evaluating the results of the continuing operations of the Company and believes
that this information provides investors with better insight into the period
over period financial performance of the Company.
The Company defines "Free cash flow" as "Net cash provided by operating
activities" less "Capital expenditures". The Company's management believes that
free cash flow is useful to investors and management as a supplemental financial
measurement in the evaluation of the Company's business and believes that free
cash flow may provide additional information with respect to the Company's
ability to meet its future debt service, capital expenditures and working
capital requirements. Free cash flow can also be reinvested in the Company for
future growth.
The Company defines "EBITDA from continuing operations" as earnings before
interest, taxes, depreciation and amortization. The Company's management uses
EBITDA as a supplemental financial measurement in the evaluation of the
Company's business and believes that EBITDA may provide additional information
with respect to the Company's ability to meet its future debt service, capital
expenditures and working capital requirements.
The presentation of net earnings excluding the after-tax charges relating to the
MSA and MTA, EBIT from continuing operations, EBIT excluding the after-tax
charges relating to the MSA and MTA, free cash flow, and EBITDA from continuing
operations, is intended to supplement investors' understanding of the Company's
operating performance. The Company's non-GAAP financial measures may not be
comparable to other companies' non-GAAP financial performance measures.
Furthermore, these measures are not intended to replace net earnings, cash
flows, financial position, or comprehensive income (loss), as determined in
accordance with GAAP.
Other Matters
The information contained in this report, including Exhibit 99.1, shall not be
deemed to be "filed" for the purposes of Section 18 of the Securities Exchange
Act of 1934 as amended ("Exchange Act") or otherwise subject to the liabilities
of that section, unless the Company specifically incorporates it by reference in
a document filed under the Securities Act of 1933 as amended or the Exchange
Act.
Statements in this report, including Exhibit 99.1, regarding the Company's
ability to negotiate a successful settlement and/or enforce the terms of the
MSA, statements in the Chairman's comments concerning future closures,
consolidations and relocations, the associated costs and resulting savings to be
achieved, results to be achieved from future Filtration initiatives, future
fiscal 2003 revenues, gains/charges and earnings and other written or oral
statements which are not strictly historical are "forward-looking" statements
within the meaning of the safe harbor provisions of the federal securities laws.
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: further weakening of economic
conditions in served markets; changes in customer demands or customer
insolvencies; competition; intellectual property rights; the Company's
successful exploitation of acquired intellectual property rights; the success of
future Filtration initiatives adopted by Management; successful execution of
planned facility closures, consolidations and relocations with regard to the
Company's Puerto Rico facility and U.K. facility; the impact of FASB
Interpretation No. 46; consolidation of internal operations; integration of
recently acquired businesses; delivery delays or defaults by customers;
termination for convenience of customer contracts; timing and magnitude of
future contract awards; performance issues with key suppliers and
subcontractors; collective bargaining and labor disputes; changes in laws and
regulations including changes in accounting standards and taxation requirements;
litigation uncertainty; and the Company's successful execution of internal
operating plans.
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 hereunto duly authorized.
ESCO TECHNOLOGIES INC.
Dated: May 13, 2003 By: /s/ G.E. Muenster
G.E. Muenster
Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.1 Press release dated May 13, 2003