ESCO Technologies Inc. reported its operating results for the first quarter ended December 31, 2014. EPS was $0.41 per share, a 21% increase over Q1 2014 EPS from continuing operations as adjusted of $0.34 per share, and a 24% increase over Q1 2014 GAAP EPS of $0.33 per share.
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Management previously provided Q1 2015 EPS guidance in the range of $0.28 to $0.33 per share.
Q1 2015 sales decreased $4 million, or 3 percent to $120 million compared to $124 million in Q1 2014. Utility Solutions Group (USG, or Doble) sales increased $4 million (14 percent), Filtration sales decreased $8 million (14 percent), and Test sales were consistent in both periods.
Q1 2015 gross margin increased to 41.6 percent compared to 40.3 percent in Q1 2014, driven by the significant increase in Doble sales which included new international customers, new hardware and software applications including DobleARMS(R), and additional services;.
The effective tax rate in Q1 2015 was 26.7 percent compared to 35.7 percent in Q1 2014. The Q1 2015 rate was favorably impacted by the December 2014 extension of the research credit which provided a $0.9 million cumulative tax benefit reducing the tax rate by 6.4 percentage points.
The Q1 2015 projected tax rate was 35 percent compared to the 26.7 percent reported. The better than expected tax rate generated approximately $0.05 of EPS in Q1 2015.
Q1 2015 Orders were $152 million (book-to-bill of 1.26x) resulting in an order backlog of $335 million at December 31, 2014, reflecting a $32 million, or 10 percent increase during the quarter.
Test orders were a record $60 million (book-to-bill of 1.53x) and included a $10 million automotive chamber in China. Filtration orders were $64 million (book-to-bill of 1.35x) and included additional orders from KAZ, and significant aerospace and Space orders. Doble's orders were $28 million (book-to-bill of 0.83x) consistent with its historical quarterly profile.
Net debt at December 31, 2014 was $21 million ($39 million of cash and $60 million of borrowings).
During Q1 2015, the company returned $8.5 million to shareholders through dividends ($2.1 million) and share repurchases ($6.4 million, and 183,000 shares). ■