SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______ COMMISSION FILE NUMBER 1-10596 ESCO TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) MISSOURI 43-1554045 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 8888 LADUE ROAD, SUITE 200 63124-2090 ST. LOUIS, MISSOURI (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code:(314) 213-7200 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares of the registrant's stock outstanding at January 31, 2002 was 12,437,288.
PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ESCO TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Dollars in thousands, except per share amounts) Three Months Ended December 31,___ 2001 2000 Net sales $84,336 82,871 Costs and expenses: Cost of sales 57,457 57,626 Selling, general and administrative 18,753 16,765 expenses Interest expense 51 81 Other, net 315 1,911 Total costs and expenses 76,576 76,383 Earnings before income taxes 7,760 6,488 Income tax expense 2,988 2,510 Net earnings $ 4,772 3,978 Earnings per share: Net earnings - Basic $ .38 .32 -Diluted .37 .31 See accompanying notes to consolidated financial statements.
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) December 31, September 30, 2001 2001 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 18,223 14,506 Accounts receivable, less allowance for doubtful accounts of $1,110 and $1,122, respectively 64,671 61,351 Costs and estimated earnings on long-term contracts, less progress billings of $24,037 and $21,913, respectively 3,356 6,637 Inventories 49,174 48,167 Other current assets 21,058 20,769 Total current assets 156,482 151,430 Property, plant and equipment, at cost 110,405 107,940 Less accumulated depreciation and amortization 45,010 42,902 Net property, plant and equipment 65,395 65,038 Goodwill, less accumulated amortization of $12,674 and $12,674, respectively 101,646 102,163 Deferred tax assets 37,155 38,573 Other assets 16,907 18,373 $ 377,585 375,577 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Short-term borrowings and current maturities of long-term debt $ 80 122 Accounts payable 34,436 35,180 Advance payments on long-term contracts, less costs incurred of $2,885 and $809, respectively 1,400 1,534 Accrued expenses and other current liabilities 26,062 27,233 Total current liabilities 61,978 64,069 Other liabilities 15,913 15,890 Long-term debt 8,322 8,338 Total liabilities 86,213 88,297 Commitments and contingencies -- -- Shareholders' equity: Preferred stock, par value $.01 per share, authorized 10,000,000 shares -- -- Common stock, par value $.01 per share, authorized 50,000,000 shares; issued 13,427,614 and 13,409,934 shares, respectively 134 132 Additional paid-in capital 207,021 206,282 Retained earnings since elimination of deficit at September 30, 1993 104,421 99,649 Accumulated other comprehensive loss (7,499) (6,518) 304,077 299,547 Less treasury stock, at cost: 1,003,846 and 985,469 common shares, respectively (12,705) (12,267) Total shareholders' equity 291,372 287,280 $ 377,585 375,577 See accompanying notes to consolidated financial statements.
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in thousands) Three Months Ended December 31, 2001 2000 Cash flows from operating activities: Net earnings $ 4,772 3,978 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 3,265 3,850 Changes in operating working capital (3,386) (1,570) Deferred taxes 1,418 (20) Other 1,394 (834) Net cash provided by operating activities 7,463 5,404 Cash flows from investing activities: Capital expenditures (3,261) (1,533) Net cash used by investing activities (3,261) (1,533) Cash flows from financing activities: Net decrease in short-term borrowings (12) (1,000) Proceeds from long-term debt 45 - Principal payments on long-term debt (92) 7 Purchases of common stock into treasury (456) (266) Other 30 13 Net cash used by financing activities (485) (1,246) Net increase in cash and cash equivalents 3,717 2,625 Cash and cash equivalents, beginning of period 14,506 5,620 Cash and cash equivalents, end of period $18,223 8,245 See accompanying notes to consolidated financial statements.
ESCO TECHNOLOGIES INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. BASIS OF PRESENTATION The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures required by accounting principles generally accepted in the United States of America (GAAP). For further information refer to the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 2001. Certain prior year amounts have been reclassified to conform to the fiscal 2002 presentation. The results for the three month period ended December 31, 2001 are not necessarily indicative of the results for the entire 2002 fiscal year. 2. GOODWILL AND OTHER INTANGIBLE ASSETS- ADOPTION OF SFAS NO. 142 Management adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 142 Goodwill and Other Intangible Assets effective October 1, 2001, the beginning of the Company's fiscal year. SFAS No. 142 requires that goodwill and intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually in accordance with the provisions of SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite useful lives be amortized over their respective estimated useful lives to their estimated residual values, and reviewed for impairment in accordance with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. In addition, to the extent an intangible asset is identified as having an indefinite useful life, the Company is required to test the intangible asset for impairment in accordance with the provisions of SFAS No. 142. Any impairment loss will be measured as of the date of adoption and recognized as the cumulative effect of a change in accounting principle. No impairment loss was recorded upon the adoption of SFAS No. 142. The following table presents a reconciliation of net earnings for the three months ended December 31, 2000, as restated, to reflect the removal of goodwill amortization in accordance with SFAS No. 142, to be used for comparison purposes with the three months ended December 31, 2001. (Dollars in thousands, except per share amounts) Three Months Ended December 31, 2000 $3,978 Reported net earnings Add back: Goodwill amortization, net of tax 510 Adjusted net earnings $4,488 Earnings per share - Basic: As Reported $ .32 Goodwill amortization .05 Adjusted $ .37 Earnings per share - Diluted: As Reported $ .31 Goodwill amortization .04 Adjusted $ .35
3. EARNINGS PER SHARE (EPS) Basic EPS is calculated using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive common share options and performance shares by using the treasury stock method. The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands): Three Months Ended December 31, 2001 2000 Weighted Average Shares Outstanding - Basic 12,415 12,291 Dilutive Options and Performance Shares 496 389 Adjusted Shares- Diluted 12,911 12,680 For the three month period ended December 31, 2001, there were no options outstanding where the exercise price was greater than the average market price of the common shares. Options to purchase approximately 15,500 shares of common stock at a price of $19.22 per share were outstanding during the three month period ended December 31, 2000, but were not included in the computation of diluted EPS because the options' exercise price was greater than the average market price of the common shares. These options expire in various periods through 2011. Approximately 153,000 and zero performance shares were outstanding but unearned at December 31, 2001 and 2000, respectively, and therefore, were not included in the respective computation of diluted EPS. 4. INVENTORIES Inventories consist of the following (in thousands): December 31, September 30, 2001 2001 Finished goods $ 11,260 12,065 Work in process, including long- term contracts 16,842 17,089 Raw materials 21,072 19,013 Total inventories $ 49,174 48,167 5. COMPREHENSIVE INCOME Comprehensive income for the three-month periods ended December 31, 2001 and 2000 was $3.8 million and $4.2 million, respectively. The Company's comprehensive income is impacted by foreign currency translation adjustments of $1.3 million offset by changes in fair value of the Company's interest rate swaps designated as a cash flow hedge of $0.3 million, discussed below in Item 3. 6. BUSINESS SEGMENT INFORMATION The Company is organized based on the products and services that it offers. Under this organizational structure, the Company operates in four segments: Filtration/Fluid Flow, Test, Communications and Other. Effective October 1, 2001, the Company adopted the provisions of SFAS No. 142. In conjunction with the adoption of SFAS No. 142, and to reflect the change in the manner in which management evaluates and measures the performance of its operating segments, the Company has changed its segment reporting financial disclosures from "Net Sales and Operating Profit" to "Net Sales and EBIT". EBIT is defined as: Earnings Before Interest and Taxes.
($ in millions) Three Months ended December 31, NET SALES 2001 2000 Filtration/Fluid Flow $ 44.4 44.2 Test 17.8 21.7 Communications 19.3 14.3 Other 2.8 2.7 Consolidated totals $ 84.3 82.9 EBIT Filtration/Fluid Flow $ 2.3 2.0 (2) Test 1.4 2.1 (3) Communications 4.4 3.5 Other (.3) (1.0) (4) Consolidated totals $ 7.8 (1) 6.6 (1) The three month period ended December 31, 2001 excludes goodwill amortization in accordance with the adoption of SFAS No. 142. (2) The three month period ended December 31, 2000 includes $0.5 million of goodwill amortization. (3) The three month period ended December 31, 2000 includes $0.4 million of goodwill amortization. (4) The amount for the three month period ended December 31, 2000 consisted of $0.3 million related to Rantec and ($1.3) million related to unallocated corporate operating charges, which includes ($0.3) million of charges related to termination costs in Brazil and includes ($0.4) million of corporate litigation costs related to the Filtration/Fluid flow segment. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS NET SALES Net sales were $84.3 million and $82.9 million for the first quarter of fiscal 2002 and 2001, respectively. The largest increase was in the Company's Communications segment, resulting from significantly higher shipments of Automatic Meter Reading (AMR) equipment to electric utility cooperatives (Co-ops) and Wisconsin Public Service Corporation (WPS). FILTRATION/FLUID FLOW Net sales were $44.4 million and $44.2 million for the first quarter of fiscal 2002 and 2001, respectively. Sales increased slightly during the first quarter of fiscal 2002 as a result of the contribution from Bea Filtri S.p.A. (Bea), acquired in June 2001, which contributed approximately $2.8 million of net sales in the first quarter of fiscal 2002, partially offset by lower sales in the commercial aerospace, automotive and semiconductor markets, which continue to experience economic softness. TEST Net sales were $17.8 million and $21.7 million for the first quarter of fiscal 2002 and 2001, respectively. The sales decrease in the first quarter of fiscal 2002 as compared to the prior year period is mainly due to the prior year substantial completion of the General Motors test chamber complex, which contributed $2.1 million of net sales and $0.5 million of gross profit in the first quarter of fiscal 2001 as compared to $0.2 million of net sales and $0.03 million of gross profit in fiscal 2002, and continued softness in the overall electronics and telecommunications markets. Sales of the Company's Magnetic Resonance Imaging (MRI) products continued to increase in the first quarter of fiscal 2002 due to the growing health care market. COMMUNICATIONS For the first quarter of fiscal 2002, net sales of $19.3 million were $5.0 million, or 34.8% higher than the $14.3 million of net sales recorded in the first quarter of fiscal 2001. The increase is the result of significantly higher shipments of AMR equipment to electric utility cooperatives (Co-ops) and WPS. OTHER Net sales were $2.8 million in the first quarter of fiscal 2002 and $2.7 million in the same period of fiscal 2001. The Other segment represents the net sales of Rantec Power Systems (Rantec). ORDERS AND BACKLOG Firm order backlog was $202.0 million at December 31, 2001, compared with $180.1 million at September 30, 2001. Orders totaling $106.2 million were received in the first quarter of fiscal 2002. Approximately $46.1 million of new orders in the first quarter of fiscal 2002 related to Filtration/Fluid Flow products, $17.9 million related to Test products, and $39.0 million related to Communications products. Subsequent to the quarter-end, on February 4, 2002, the Company received a $112 million contract from PPL Electric Utilities Corporation, a subsidiary of PPL Corporation, for an automated meter reading system. The project is scheduled for completion at the end of calendar year 2004. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative (SG&A) expenses for the first quarter of fiscal 2002 were $18.8 million, or 22.2% of net sales, compared with $16.8 million, or 20.2% of net sales for the prior year period. The increase in SG&A spending in the first quarter of 2002 is mainly due to the Bea acquisition, which contributed approximately $0.8 million of SG&A expenses in the first quarter of fiscal 2002, and additional investments in research and development, engineering, and marketing within the Communications segment to enhance new product development efforts and market expansion opportunities. OTHER COSTS AND EXPENSES, NET Other costs and expenses, net, were $0.3 million for the quarter ended December 31, 2001 compared to $1.9 million for the prior year quarter. The first quarter of fiscal 2002 excludes goodwill amortization in accordance with the adoption of SFAS No. 142, while the first quarter of fiscal 2001 included goodwill amortization of $0.9 million. Principal components of the amount for the first quarter of fiscal 2002 include $0.3 million of amortization of intangible assets, primarily patents, and $0.3 million of ongoing facility consolidation costs related to Filtration/Fluid Flow, offset by a $0.4 million gain from insurance proceeds related to a former subsidiary. Principal components of the amount for the first quarter of fiscal 2001 include $0.9 million of goodwill amortization, $0.3 million of amortization of intangible assets and $0.3 million of moving expenses related to the West Coast Filtration/Fluid Flow operations. EBIT During fiscal 2002, Management began evaluating the performance of its operating segments based on EBIT, which the Company defines as: earnings before interest and taxes. EBIT increased $1.2 million to $7.8 million (9.3% of net sales) for the first quarter of fiscal 2002 from EBIT of $6.6 million (7.9% of net sales) for the first quarter of fiscal 2001. The prior year quarter included goodwill amortization of approximately $0.9 million. Excluding the amortization of goodwill from the first quarter of fiscal 2001's results, EBIT would have been $7.5 million (9.0% of net sales). FILTRATION/FLUID FLOW EBIT increased $0.3 million to $2.3 million for the first quarter of fiscal 2002 from $2.0 million for the first quarter of fiscal 2001. The prior year period included goodwill amortization of $0.5 million. Excluding the goodwill amortization, EBIT for the first quarter of fiscal 2001 would have been $2.5 million. The current year was adversely impacted by the softening of the commercial aerospace, automotive and semiconductor markets and investments in new product development and market expansion opportunities, primarily in microfiltration. TEST EBIT was $1.4 million and $2.1 million in the first quarter of fiscal 2002 and 2001, respectively. The prior year period included goodwill amortization of $0.4 million. Excluding the goodwill amortization, EBIT for the first quarter of fiscal 2001 would have been $2.5 million. The decline in EBIT in the first quarter of fiscal 2002 as compared to the prior year period is mainly due to the substantial completion of the General Motors test chamber complex in fiscal 2001 and the continued softness in the electronics and telecommunications markets. COMMUNICATIONS First quarter EBIT of $4.4 million in fiscal 2002 was $0.9 million or 24.3% higher than the $3.5 million of EBIT in the first quarter of fiscal 2001. The increase in EBIT is the result of significantly higher shipments of AMR equipment. There was no impact on the Communications segment as a result of adopting the provisions of SFAS No. 142. OTHER EBIT was ($0.3) million and ($1.0) million for the three month periods ended December 31, 2001 and 2000, respectively. The amount for the three month period ended December 31, 2001 consisted of $0.2 million related to Rantec and ($0.5) million related to unallocated corporate operating charges. The amount for the three month period ended December 31, 2000 consisted of $0.3 million related to Rantec and ($1.3) million related to unallocated corporate operating charges, which includes ($0.3) million of charges related to termination costs in Brazil and includes ($0.4) million of corporate litigation costs related to the Filtration/Fluid Flow segment. INTEREST EXPENSE (INCOME) Interest expense, net, was approximately $0.1 million for both the three month periods ended December 31, 2001 and 2000, respectively. INCOME TAX EXPENSE The first quarter fiscal 2002 effective income tax rate was 38.5% compared to 38.7% in the first quarter of fiscal 2001. Management estimates the annual effective tax rate for fiscal 2002 to be approximately 39%. FINANCIAL CONDITION Working capital increased to $94.5 million at December 31, 2001 from $87.4 million at September 30, 2001. During the first quarter of fiscal 2002, total current assets increased by $5.1 million, of which cash and cash equivalents increased by $3.7 million. In addition, accounts payable and accrued expenses decreased by $1.9 million primarily due to the timing of payments. Net cash provided by operating activities was $7.5 million in the first three months of fiscal 2002 compared to net cash provided by operating activities of $5.4 million in the same period of fiscal 2001. Cash flow from operations and borrowings under the bank credit facility are expected to provide adequate resources to meet the Company's capital requirements and operational needs for the foreseeable future. Capital expenditures were $3.3 million in the first three months of fiscal 2002 compared with $1.5 million in the comparable period of fiscal 2001. Major expenditures in the current period included manufacturing automation equipment used in the Filtration / Fluid Flow businesses. The Company has a $31.5 million obligation under a synthetic lease facility arranged by Bank of America. For GAAP purposes, this is accounted for as an operating lease. This obligation is secured by leases of three manufacturing locations, two of which are located in Oxnard, CA and the other in Cedar Park, TX, as well as a $10.6 million letter of credit issued under the $75 million credit facility. The leases expire on December 29, 2005 at which time the Company will be required to extend the leases, purchase the properties for $31.5 million, or refinance the obligation. On February 8, 2001, the Company approved a stock repurchase program. Under this program, the Company is authorized to purchase up to 1.3 million shares of its common stock in the open market, subject to market conditions and other factors, through September 30, 2003. The Company repurchased 20,000 shares during the first quarter of fiscal 2002. The Company continues to explore consolidation opportunities within its existing businesses which could improve future earnings and enhance the Company's competitive position. The Company will also continue to look for acquisitions that offer complementary products and/or new technologies. FORWARD LOOKING STATEMENTS Statements in this report that are not strictly historical are "forward looking" statements within the meaning of the safe harbor provisions of the federal securities laws. Forward looking statements include those relating to estimated income tax expense and the Company's capital requirements and operational needs for the foreseeable future. Investors are cautioned that such statements are only predictions, and speak only as of the date of this report. The Company's actual results in the future may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company's operations and business environment including, but not limited to: further weakening of economic conditions in served markets; changes in customer demands or customer insolvencies; electricity shortages; competition; intellectual property rights; consolidation of internal operations; integration of recently acquired businesses; delivery delays or defaults by customers; performance issues with key suppliers and subcontractors; collective bargaining labor disputes; and the Company's successful execution of internal operating plans. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Market risks relating to the Company's operations result primarily from changes in interest rates and changes in foreign currency exchange rates. The Company has interest rate exposure relating to floating rate lease obligations and, accordingly, during 2001, the Company entered into two interest rate swaps totaling approximately $30 million to mitigate this exposure. These interest rate swaps relate to an operating lease obligation under its synthetic lease facility, which is arranged by Bank of America. The interest rate swaps are for $23.6 million and $6.5 million and effectively fix the interest rates on the underlying lease obligations at 6.78% and 5.49%, respectively. These lease obligations and their related interest rate swaps expire on December 29, 2005. In addition, the Company has interest rate exposure of approximately $4 million relating to floating rate obligations denominated in EURO dollars. Therefore, in September 2001, the Company entered into an interest rate swap of approximately $4 million to mitigate this exposure. This interest rate swap effectively fixed the interest rate at 4.89%. This amount is borrowed under the Company's $75 million credit facility and matures on April 11, 2005 along with its related interest rate swap. These swaps are accounted for as cash flow hedges under the provisions of SFAS 133, "Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS 138". For the quarter ended December 31, 2001, other comprehensive loss included a pretax increase in fair value of approximately $0.3 million related to the interest rate swaps. The Company is subject to foreign currency exchange rate risk inherent in our sales commitments, anticipated sales, anticipated purchases and assets and liabilities denominated in currencies other than the U.S. dollar. The currency most significant to our operations is the Euro. The Company hedges certain foreign currency commitments by purchasing foreign currency forward contracts. PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) Exhibits Exhibit Number 3(a) Restated Articles of Incorporated by reference to Incorporation Form 10-K for the fiscal year ended September 30, 1999 at Exhibit 3(a) 3(b) Amended Certificateof Incorporated by reference to Form Designation Preferences 10-Q for the fiscal quarter ended and Rights of Series A March 31, 2000 at Exhibit 4(e) participating Cumulative Preferred Stock of the Registrant 3(c) Articles of Merger Incorporated by reference to effective July 10, 2000 Form 10-Q for the fiscal quarter ended June 30, 2000 at Exhibit 3(c) 3(d) Bylaws, as amended Incorporated by reference to Form 10-Q for the fiscal quarter ended June 30, 2000 at Exhibit 3(d) 4(a) Specimen Common Stock Incorporated by reference to Form Certificate 10-Q for the fiscal quarter ended June 30, 2000 at Exhibit 4(a) 4(b) Specimen Rights Incorporated by reference to Certificate Exhibit B to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated February 3, 2000 4(c) Rights Agreement dated Incorporated by reference to as of September 24, 1990 Current Report on Form 8-K (as amended and dated February 3, 2000, at Restated as of Exhibit 4.1 February 3, 2000) between the Registrant and Registrar and Transfer Company, as successor Rights Agent 4(d) Amended and Restated Credit Incorporated by reference Agreement dated as of February to Form 10-Q for the fiscal 28, 2001 among the Registrant, quarter ended March 31, 2001 Bank of America, N.A., at Exhibit 4(d) as agent, and the lenders listed therein b) Reports on Form 8-K. During the quarter ended December 31, 2001, the Company filed the following Current Reports on Form 8-K: The Company filed a Current Report on Form 8-K, dated October 8, 2001, which reported in "Item 5. Other Events"the appointment of the Company"s new Stock Transfer Agent and Registrar, Exchange Agent and Rights Agent. The Company filed a Current Report on Form 8-K, dated November 28, 2001, which reported in"Item 7. Financial Statements, Pro Forma Financial Information and Exhibits"and "Item 9. Regulation FD Disclosure" that the Company would include certain information regarding its financial goals on its website. The Company filed a Current Report on Form 8-K/A, dated November 28, 2001, which reported in "Item 7. Financial Statements, Pro Forma Financial Information and Exhibits" that the Company was amending its Current Report on Form 8-K. dated November 28, 2001, to correct an error in Exhibit 99.2. 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 thereunto duly authorized. ESCO TECHNOLOGIES INC. /s/ Gary E. Muenster Gary E. Muenster Vice President and Corporate Controller (As duly authorized officer and principal accounting officer of the registrant) Dated: February 14, 2002