UNITED STATES
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): February 4, 2005
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 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Today, February 4, 2005, the Registrant is issuing a press release (Exhibit 99.1
to this report) announcing its fiscal 2005 first quarter financial and operating
results. See Item 7.01, Regulation FD Disclosure below.
ITEM 7.01. REGULATION FD DISCLOSURE
Today, the Registrant is issuing a press release announcing its fiscal 2005
first quarter financial and operating results. This press release is furnished
herewith as Exhibit 99.1 and will be posted on the Registrant's website located
at http://www.escotechnologies.com. It can be viewed through the "Investor
Relations" page of the website under the tab "Press Releases," although the
Registrant 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 Registrant's operating
results in a manner that is focused on the performance of the Registrant's
ongoing operations. The Registrant 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 "operational" net earnings,
earnings per share and results of operations, as well as "EBIT from continuing
operations," "EBIT margin," "operational" EBIT margin, "free cash flow from
continuing operations" and Filtration segment"operational" EBIT.
The Registrant defines "operational" net earnings, earnings per share, and
results of operations as net earnings, earnings per share, and results of
operations in accordance with GAAP, except for the exclusion of (i) exit costs
and severance charges related to the shutdown and relocation of the Filtration
segment Puerto Rico facility, (ii) asset impairment charges related to the
Filtration segment Puerto Rico facility and Test segment U.K. facility, (iii)
severance charges related to the Test segment U.K. facility, (iv) gain from
settlement of patent litigation related to the Filtration segment, (v) costs
resulting from the Management Transition Agreement between the Registrant and
its former Chairman, (vi) the charge resulting from an equipment lease
termination related to the Whatman Hemasure contract dispute, (vii) the interest
rate swap charge, (viii) the cumulative effect of accounting charge related to
the synthetic lease obligation, (ix) gain on the sale of Rantec Power Systems,
Inc., which was divested and is shown as "discontinued operations" in fiscal
2003 and (x) the results of operations from the MicroSep businesses which were
divested in fiscal 2004 and are shown as "discontinued operations" in fiscal
2004 and 2003. The Registrant defines "operational" EBIT margin as EBIT margin
(defined below) with the foregoing exclusions. The Registrant's management uses
these "operational" results in evaluating the measures of continuing operations
of the Registrant and believes that this information provides investors with
additional insight into the period over period financial performance of the
Registrant.
The Registrant defines "EBIT from continuing operations" as earnings before
interest and taxes. The Registrant defines "EBIT margin" as EBIT from continuing
operations as a percent of net sales. The Registrant's management evaluates the
performance of its operating segments based on EBIT from continuing operations
and EBIT margin, and believes that EBIT from continuing operations and EBIT
margin are useful to investors to demonstrate the operational profitability of
the Registrant's business segments by excluding interest and taxes, which are
generally accounted for across the entire Registrant on a consolidated basis.
EBIT from continuing operations is also one of the measures used by management
in determining resource allocations within the Registrant and incentive
compensation.
The Registrant defines "Free cash flow from continuing operations" as "Net cash
provided by operating activities-continuing operations" less "Capital
expenditures-continuing operations." The Registrant's management believes that
free cash flow from continuing operations is useful to investors and management
as a supplemental financial measurement in the evaluation of the Registrant's
business and believes that free cash flow may provide additional information
with respect to the Registrant's ability to meet its future debt service,
capital expenditures and working capital requirements. Free cash flow can also
be reinvested in the Registrant for future growth.
The Registrant defines Filtration segment "operational" EBIT as segment EBIT,
excluding the costs related to the shutdown of the Puerto Rico facility, the
gain from settlement of the patent litigation, and the Whatman Hemasure charge.
The presentation of the information described above is intended to supplement
investors' understanding of the Registrant's operating performance. The
Registrant'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,
comprehensive income (loss), or any other measure as determined in accordance
with GAAP.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit No. Description of Exhibit
99.1 Press Release dated February 4, 2005
OTHER MATTERS
The information contained in this report, including Exhibit 99.1, shall not be
deemed to be "filed" for 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 Registrant incorporates it by reference into a filing
under the Securities Act of 1933 as amended or the Exchange Act.
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: February 4, 2005 By:
G.E. Muenster
Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description of Exhibit
99.1 Press release dated February 4, 2005