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Dec 31, 2020
ESCO Technologies Q1 2021 Earnings Report
Reported GAAP EPS of $0.52 and Adjusted EPS of $0.55, exceeding consensus estimates, and achieved record Q1 cash flow.
Key Takeaways
ESCO Technologies Inc. reported strong Q1 2021 results, demonstrating resilience through diversity and effective cost management. The company's performance was driven by USG's exceeding expectations, while managing COVID-19 impacts in commercial aerospace and utility sectors. Record cash flow was generated, debt was reduced, and investments in new products continued.
GAAP EPS was $0.52, and Adjusted EPS was $0.55, surpassing consensus estimates.
Record Q1 cash flow from operations was achieved, with a leverage ratio of 0.38x and liquidity of $740 million.
USG segment substantially exceeded internal expectations with nearly 25% Adjusted EBIT margin.
The company continues to pursue acquisitions and expand internal investments in new product development.
ESCO Technologies
ESCO Technologies
ESCO Technologies Revenue by Segment
Revenue by Segment
Utility Solutions Group Revenue
CapyFin.comRF Test & Measurement Revenue
CapyFin.com Forward Guidance
The company anticipates tangible signs of recovery in the second half of fiscal 2021, pointing to a solid outlook for the back half of the year. Management expects growth in Sales, Adjusted EBITDA, and Adjusted EPS compared to 2020, with Adjusted EBITDA and Adjusted EPS reasonably consistent with 2019.
Positive Outlook
- Tangible signs of recovery in the second half of fiscal 2021.
- Expected growth in Sales, Adjusted EBITDA and Adjusted EPS compared to 2020.
- Adjusted EBITDA and Adjusted EPS reasonably consistent with 2019.
- Commercial aerospace and utility end-markets have seen some degree of customer stabilization.
- Notable pockets of recovery are visible.
Challenges Ahead
- Uncertainty as to the timing and pace of recovery in commercial aerospace and utility areas.
- The wide distribution of viable COVID-19 vaccines is anticipated to benefit and accelerate the recovery of commercial air travel and utility spending with customers resuming normal testing protocols and equipment purchases, but Management has determined that it is advisable to wait at least another 90 days before resuming specific guidance.
- It is difficult to predict how the balance of 2021 will be affected using normal forecasting methodologies.
- The company will continue its suspension of forward-looking guidance.
- First half of 2021 is projected to be a slightly lower comparison to 2020’s first half.
Revenue & Expenses
Visualization of income flow from segment revenue to net income