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Kaydon Corp, USA
COMPANY WATCH
Esco Technologies Inc, USA
Kaydon Corp, USA
Key Figures (US$ million) Third quarter ended 30.9 2007
Key Figures (US$ million) Third quarter ended 29.9.2007
2006 121.8
Net Sales Of Which: Filtration/Fluid Flow
162.1 53.0
45.0
Net Sales Of Which: Other Products
18.8
17.2
Cost of Sales
106.9
78.7
Cost of Sales
64.1
58.8
Earnings before Income Taxes Of Which: Filtration/Fluid Flow
20.6
13.2
Gross Profit
43.3
40.9
8.3
5.5
24.5
24.9
Net Earnings
16.6
10.6
Operating Income Of Which: Other Products
2.2
0.8
Net Income
17.1
17.6
Nine months ended 29.9.2007
30.9.2006
Net Sales Of Which: Other Products
327.7
303.8
58.2
53.2
Year ended 30.9 2007
2006
527.5
458.9
107.4
30.9.2006 99.7
Net Sales Of Which: Filtration/Fluid Flow
188.4
174.1
Cost of Sales
349.9
300.3
42.7
48.9
Cost of Sales
191.6
177.8
23.4
19.5
Gross Profit
136.1
126.0
31.3
Operating Income Of Which: Other Products
79.1
74.7
8.0
4.3
Net Income
55.0
51.9
Earnings before Income Taxes Of Which: Filtration/Fluid Flow Net Earnings
33.7
COMMENT Esco Technologies had a strong fourth quarter with overall net sales up 33.1% to US$162.1 million, while net earnings were 56.6% stronger at US$16.6 million. Full-year results were similar, with revenue climbing 14.9% to US$527.5 million and net earnings up 7.7% at US$33.7 million. Filtration sales of US$53.0 million were 17.8% higher than the 2006 fourth quarter, driven by the continuing strength in most end markets including defence spares and space products, commercial aerospace, and, medical and commercial products. Full year sales increased 8.2% on the previous period to total US$188.4 million benefiting from similar market growth. In terms of profitability, the Filtration segment’s fourth quarter EBIT increased 50.9% on the year earlier to reach US$8.3 million, equivalent to
8
Filtration Industry Analyst
15.7% of sales. For the full year, EBIT was up 20% at US$23.4 million (12.4% of sales). In both cases the upturn reflected sales increased and a related improvement in margins. Following the close of the quarter, Esco said it was selling the filtration portion of Filtertek Inc, although retaining its packaging division. Filtertek had 2007 filtration sales of US$82.8 million. Proceeds from the sale will be used to partially fund the company’s acquisition of Doble Engineering. “While pleased to have 2007 behind us, I am truly excited about the prospects and growth opportunities across the company in 2008,” Vic Richey, Esco’s chair and CEO, said. “Additionally, our organic growth is expected to be significantly enhanced with the addition of Doble.” ■ www.escotechnologies.com
COMMENT Diversified industrial manufacturer Kaydon has posted record third quarter sales of US$107.4 million, up 7.7% on a year earlier. Net income for the period, however, was down 2.8% on the 2006 figure at US$17.1 million, equivalent to 17.3% of sales. Revenues in the company’s Other Products segment, home to its filtration businesses, increased 9.3% on the year earlier quarter to reach US$18.8 million, with sales growth achieved across all the segment’s businesses. Operating income for the segment was up 175% at US$2.2 million, thanks to higher sales volumes, particularly in Kaydon’s liquid and air filtration businesses, and from the benefits of plant consolidation at its liquid fil-
tration business completed in 2006. For the equivalent ninemonth period, Other Products saw net sales increase 9.3% to US$58.2 million, and operating income climb 86.0% to US$8.0 million. “We are pleased with the strong sales and orders achieved during the third quarter,” James O’Leary, Kaydon’s president and CEO commented. “Our net income and earnings per share were strong as compared to an outstanding performance in the prior third quarter. Our order intake was a third-quarter record and the resultant record US$211.4 million backlog provides positive momentum through the fourth quarter and in to 2008.” ■ www.kaydon.com
February 2008
Esco Technologies Inc, USA
Kaydon Corp, USA
Key Figures (US$ million) Third quarter ended 30.9 2007
Key Figures (US$ million) Third quarter ended 29.9.2007
2006 121.8
Net Sales Of Which: Filtration/Fluid Flow
162.1 53.0
45.0
Net Sales Of Which: Other Products
18.8
17.2
Cost of Sales
106.9
78.7
Cost of Sales
64.1
58.8
Earnings before Income Taxes Of Which: Filtration/Fluid Flow
20.6
13.2
Gross Profit
43.3
40.9
8.3
5.5
24.5
24.9
Net Earnings
16.6
10.6
Operating Income Of Which: Other Products
2.2
0.8
Net Income
17.1
17.6
Nine months ended 29.9.2007
30.9.2006
Net Sales Of Which: Other Products
327.7
303.8
58.2
53.2
Year ended 30.9 2007
2006
527.5
458.9
107.4
30.9.2006 99.7
Net Sales Of Which: Filtration/Fluid Flow
188.4
174.1
Cost of Sales
349.9
300.3
42.7
48.9
Cost of Sales
191.6
177.8
23.4
19.5
Gross Profit
136.1
126.0
31.3
Operating Income Of Which: Other Products
79.1
74.7
8.0
4.3
Net Income
55.0
51.9
Earnings before Income Taxes Of Which: Filtration/Fluid Flow Net Earnings
33.7
COMMENT Esco Technologies had a strong fourth quarter with overall net sales up 33.1% to US$162.1 million, while net earnings were 56.6% stronger at US$16.6 million. Full-year results were similar, with revenue climbing 14.9% to US$527.5 million and net earnings up 7.7% at US$33.7 million. Filtration sales of US$53.0 million were 17.8% higher than the 2006 fourth quarter, driven by the continuing strength in most end markets including defence spares and space products, commercial aerospace, and, medical and commercial products. Full year sales increased 8.2% on the previous period to total US$188.4 million benefiting from similar market growth. In terms of profitability, the Filtration segment’s fourth quarter EBIT increased 50.9% on the year earlier to reach US$8.3 million, equivalent to
8
Filtration Industry Analyst
15.7% of sales. For the full year, EBIT was up 20% at US$23.4 million (12.4% of sales). In both cases the upturn reflected sales increased and a related improvement in margins. Following the close of the quarter, Esco said it was selling the filtration portion of Filtertek Inc, although retaining its packaging division. Filtertek had 2007 filtration sales of US$82.8 million. Proceeds from the sale will be used to partially fund the company’s acquisition of Doble Engineering. “While pleased to have 2007 behind us, I am truly excited about the prospects and growth opportunities across the company in 2008,” Vic Richey, Esco’s chair and CEO, said. “Additionally, our organic growth is expected to be significantly enhanced with the addition of Doble.” ■ www.escotechnologies.com
COMMENT Diversified industrial manufacturer Kaydon has posted record third quarter sales of US$107.4 million, up 7.7% on a year earlier. Net income for the period, however, was down 2.8% on the 2006 figure at US$17.1 million, equivalent to 17.3% of sales. Revenues in the company’s Other Products segment, home to its filtration businesses, increased 9.3% on the year earlier quarter to reach US$18.8 million, with sales growth achieved across all the segment’s businesses. Operating income for the segment was up 175% at US$2.2 million, thanks to higher sales volumes, particularly in Kaydon’s liquid and air filtration businesses, and from the benefits of plant consolidation at its liquid fil-
tration business completed in 2006. For the equivalent ninemonth period, Other Products saw net sales increase 9.3% to US$58.2 million, and operating income climb 86.0% to US$8.0 million. “We are pleased with the strong sales and orders achieved during the third quarter,” James O’Leary, Kaydon’s president and CEO commented. “Our net income and earnings per share were strong as compared to an outstanding performance in the prior third quarter. Our order intake was a third-quarter record and the resultant record US$211.4 million backlog provides positive momentum through the fourth quarter and in to 2008.” ■ www.kaydon.com
February 2008