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Esco Technologies Inc, USA
COMPANY WATCH
Esco Technologies Inc, USA
Citic Envirotech Ltd, Singapore Key Figures (S$ million) Second quarter ended 30.9 2015
2014
Revenue Of Which: Engineering Treatment Membrane
70.9
105.4
27.7 32.6 10.6
74.7 25.3 5.4
Materials, Consumables & Fees
25.9
60.2
7.7
4.9
Other Operating Expenses
12.5
11.2
Profit before Income Tax
17.9
23.3
Net Profit
15.0
18.0
Employee Benefits Expenses
2014
154.7
171.7
66.0 68.6 20.1
113.1 45.8 12.8
Materials, Consumables & Fees
66.3
101.0
Employee Benefits Expenses
18.0
9.0
Other Operating Expenses
27.1
21.1
Profit before Income Tax
25.0
49.3
Net Profit
18.7
40.8
COMMENT Membrane technology firm Citic Envirotech has posted second quarter fiscal 2016 revenues of S$70.9 million, down 32.7% on the year prior. The sales decline reflected a 62.9% fall in Engineering sector revenue to S$27.7 million, with the company posting strong gains in its other two segments with Treatment sales up 28.9% at S$32.6 million and Membrane sales 96.3% stronger at S$10.6 million. The gross margin rose from 29.2% in the year earlier period to 37.6% due to the increase in membrane sales that have higher 88
Filtration Industry Analyst
2014
Net Sales Of Which: Filtration
537.3
531.1
236.1
233.7
Cost of Sales
334.9
323.9
Selling, General and Admin Expenses 130.2
134.9
Consolidated EBIT Of Which: Filtration Net Earnings from Continuing Operations Net Earnings/(Loss) from Discontinued Operations
Six months ended 30.9 2015 Revenue Of Which: Engineering Treatment Membrane
Key Figures (US$ million) Year ended 30.9 2015
margins than Engineering segment revenues. Employee expenses rose 57.7% on the 2015 comparator to S$7.7 million, with additional staff recruitment for the operation and maintenance of new treatment plants and for membrane products manufacturing at Memstar. Net profit for the quarter was down 16.7% at S$15.0 million. For the corresponding six months, sales were down 9.9% at S$154.7 million and net profit 54.1% lower at S$18.7 million. ■ www.unitedenvirotech.com
Net Earnings
62.3
63.8
46.6
41.4
41.7
42.6
0.8
(42.2)
42.5
0.4
COMMENT For the year ended 30 September 2015, Esco Technologies Inc’s sales increased US$6 million to US$537 million from US$531 million in 2014. Filtration sales were up US$2 million, despite the expected decrease in SLS Space program sales at Vacco. Group orders were US$562 million in 2015 reflecting a US$25 million, or 8%, increase in backlog during the year, which resulted in an ending backlog of US$328 million at 30 September 2015. Filtration orders were US$253 million and included a significant amount of commercial aerospace orders (A-350, other new platform wins, etc) at PTI, increased space orders at Vacco (SLS), and higher orders at TEQ (KAZ Gen 2). “With the exception of the softness in the Test shielding market, our 2015 performance was solid and met, or exceeded, our financial expectations,” said Vic Richey, Esco Technologies chairman and CEO. Filtration’s EBIT increased US$5 million in 2015, resulting in a 20% EBIT margin. Both PTI and Crissair reported significant increases in sales and
EBIT as both benefitted from the continued strength of the commercial aerospace market and the initial production ramp up of recent new platform wins such as the A-350. Vacco was also able to recapture a significant portion of its Space business sales (SLS program timing) from the decreased sales expectations noted at the beginning of 2015. “I’m excited to see the continued strength at Doble and Filtration as it continues to validate the investments we’ve made over the past few years to enhance and accelerate a sustainable growth outlook,” continued Richey. “Filtration is now realising the benefits of the initial production increases related to its new aerospace platform wins, supplemented by additional Space program wins and the stabilisation of the SLS program. Each of these opportunities are expected to expand future growth as these programs have lengthy production runs.” Filtration sales are expected to grow in the high single-digits in 2016 with EBIT margins generally consistent with 2015. ■ www.escotechnologies.com
December 2015
Esco Technologies Inc, USA
Citic Envirotech Ltd, Singapore Key Figures (S$ million) Second quarter ended 30.9 2015
2014
Revenue Of Which: Engineering Treatment Membrane
70.9
105.4
27.7 32.6 10.6
74.7 25.3 5.4
Materials, Consumables & Fees
25.9
60.2
7.7
4.9
Other Operating Expenses
12.5
11.2
Profit before Income Tax
17.9
23.3
Net Profit
15.0
18.0
Employee Benefits Expenses
2014
154.7
171.7
66.0 68.6 20.1
113.1 45.8 12.8
Materials, Consumables & Fees
66.3
101.0
Employee Benefits Expenses
18.0
9.0
Other Operating Expenses
27.1
21.1
Profit before Income Tax
25.0
49.3
Net Profit
18.7
40.8
COMMENT Membrane technology firm Citic Envirotech has posted second quarter fiscal 2016 revenues of S$70.9 million, down 32.7% on the year prior. The sales decline reflected a 62.9% fall in Engineering sector revenue to S$27.7 million, with the company posting strong gains in its other two segments with Treatment sales up 28.9% at S$32.6 million and Membrane sales 96.3% stronger at S$10.6 million. The gross margin rose from 29.2% in the year earlier period to 37.6% due to the increase in membrane sales that have higher 88
Filtration Industry Analyst
2014
Net Sales Of Which: Filtration
537.3
531.1
236.1
233.7
Cost of Sales
334.9
323.9
Selling, General and Admin Expenses 130.2
134.9
Consolidated EBIT Of Which: Filtration Net Earnings from Continuing Operations Net Earnings/(Loss) from Discontinued Operations
Six months ended 30.9 2015 Revenue Of Which: Engineering Treatment Membrane
Key Figures (US$ million) Year ended 30.9 2015
margins than Engineering segment revenues. Employee expenses rose 57.7% on the 2015 comparator to S$7.7 million, with additional staff recruitment for the operation and maintenance of new treatment plants and for membrane products manufacturing at Memstar. Net profit for the quarter was down 16.7% at S$15.0 million. For the corresponding six months, sales were down 9.9% at S$154.7 million and net profit 54.1% lower at S$18.7 million. ■ www.unitedenvirotech.com
Net Earnings
62.3
63.8
46.6
41.4
41.7
42.6
0.8
(42.2)
42.5
0.4
COMMENT For the year ended 30 September 2015, Esco Technologies Inc’s sales increased US$6 million to US$537 million from US$531 million in 2014. Filtration sales were up US$2 million, despite the expected decrease in SLS Space program sales at Vacco. Group orders were US$562 million in 2015 reflecting a US$25 million, or 8%, increase in backlog during the year, which resulted in an ending backlog of US$328 million at 30 September 2015. Filtration orders were US$253 million and included a significant amount of commercial aerospace orders (A-350, other new platform wins, etc) at PTI, increased space orders at Vacco (SLS), and higher orders at TEQ (KAZ Gen 2). “With the exception of the softness in the Test shielding market, our 2015 performance was solid and met, or exceeded, our financial expectations,” said Vic Richey, Esco Technologies chairman and CEO. Filtration’s EBIT increased US$5 million in 2015, resulting in a 20% EBIT margin. Both PTI and Crissair reported significant increases in sales and
EBIT as both benefitted from the continued strength of the commercial aerospace market and the initial production ramp up of recent new platform wins such as the A-350. Vacco was also able to recapture a significant portion of its Space business sales (SLS program timing) from the decreased sales expectations noted at the beginning of 2015. “I’m excited to see the continued strength at Doble and Filtration as it continues to validate the investments we’ve made over the past few years to enhance and accelerate a sustainable growth outlook,” continued Richey. “Filtration is now realising the benefits of the initial production increases related to its new aerospace platform wins, supplemented by additional Space program wins and the stabilisation of the SLS program. Each of these opportunities are expected to expand future growth as these programs have lengthy production runs.” Filtration sales are expected to grow in the high single-digits in 2016 with EBIT margins generally consistent with 2015. ■ www.escotechnologies.com
December 2015