Esco Technologies Inc. · NYSE:ESE
Esco Technologies — Investor Presentation (November 2007)
31 slides from Esco Technologies's investor presentation, Nov 13, 2007
Slide 1: ESCO Technologies Investor Presentation
NYSE Symbol: ESE November 14, 2007 Filtration/Fluid Flow RF Shielding and Test Communications 9900A Clayton Road St. Louis, MO 63124-1186 (314) 213-7200 www.escotechnologies.com
Slide 2: Forward-Looking Statements
Filtration/Fluid Flow RF Shielding and Test Communications Statements regarding future events, the timing, certainty and resulting impact of the Doble acquisition,the development of new products and software, future growth drivers, the Company's ability to address the needs of utilities, performance
Slide 3: Today ESCO is...
Today ESCO is... A Proven Supplier of Special Purpose Communications Systems for the Electric, Gas and Water utilities, including Hardware and Software to support Advanced Metering Infrastructure (AMI) applications A Leading Provider of Engineered Filtration Products to the Transportation, Health Ca
Slide 4: ESCO Products & Applications
ESCO Products & Applications Test Filtration Communications 4
Slide 5: ESCO Business Profile - FY 2007
RF Shielding & Test Communications Filtration East 28 38 34 ESCO Business Profile - FY 2007 RF Shielding & Test Communications Filtration 24 45 31 $14.4M 24% $23.4M 39% $22.0M 37% Fiscal 2007 Segment EBIT $59.8M $197.6M 37% $188.4M 36% $141.5M 27% Fiscal 2007 Sales $527.5M 5 RF Shielding & Test Filt
Slide 6: ESCO Served Markets - Pro Forma FY 2007
Utility Communications Health Care Defesne Aerospace Electronics Commercial Aerospace Automotive Products Consumer & Appliance Video Security Industrial East 44.5 12 5.5 9.6 6.2 9.6 5 1.2 4 West North ESCO Served Markets - Pro Forma FY 2007 Utility Communications 45% Health Care 12% Defense Aerospac
Slide 7: Segment Profiles
Filtration/Fluid Flow RF Shielding and Test Communications Segment Profiles All are Technology Driven Businesses Customer and Solution Focused Expanding Through New Products and Internationally Engineering expenditures are typically 7-8% of sales 7
Slide 8: Communications Segment
Communications Segment A Proven Supplier of Special Purpose Communication Systems for the Electric, Gas and Water utilities, including Hardware and Software to support Advanced Metering (AMI) applications as well as Advanced Digital Video Security Applications With the Doble acquisition, the Communi
Slide 9: Communications ESCO Addressable Market
Communications ESCO Addressable Market North American Automatic Meter Reading Market ~$10B 190 Million Endpoints 45% Electric 21% Gas 34% Water Plus Add-On Products Replacement Systems Service Territory Expansion Annuity Software Maintenance and Upgrades International Served Markets Utility -- Video
Slide 10: Communications ESCO Capabilities (Excluding Doble)
Communications ESCO Capabilities (Excluding Doble) Comprehensive suite of proven products and technologies to meet the needs of any utility across the entire range of applications from basic AMR through a true AMI deployment. Fixed Network RF and Power Line Communication Systems Competitors...(Itron
Slide 11: Communications AMI Growth Drivers
Communications AMI Growth Drivers Successful Large Scale Deployments Economics Meter Reading Theft or Leakage Customer Service Call Center Outage Restoration Service Calls Distribution Infrastructure Regulatory Federal Energy Bill (Demand Response) Gateway Devices for In-Home Applications Prepay In
Slide 12: Acquisition Highlights
Acquisition Highlights... ESCO has agreed to acquire Doble Engineering for $319 million in cash, representing a 11.3x purchase multiple to projected December 31, 2007 adjusted EBITDA of $28.3 million Transaction expected to close during first quarter FY 2008 Founded in 1920, Doble is the world leade
Slide 13: Doble Solutions
Communications Application Support & Services Products Protection Test Instruments Apparatus Maintenance F Series - Relay Test Instrument M4000 Insulation Analyzer M5300 Sweep Frequency Response Analyzer On-Site Product Training Doble Product Support Consulting Services Lab Services Annual Client Co
Slide 14: Doble Highlights
Doble's products and services are much less discretionary to utilities than are other expenditures Aging infrastructures and priority on maintaining the reliability of infrastructures Limited excess capacity Utility outsourcing trend appears to be gaining momentum Proven management team End market o
Slide 15: A Transformational Transaction
A Transformational Transaction ESCO Today ESCO Pro Forma RF Shielding & Test Communications Filtration East 37.5 26.8 35.7 Communications 37.5% Filtration / Fluid Flow 35.7% Test 26.8% Sales by Segment RF Shielding & Test Communications Filtration East 45.6 23.3 31 Communications 45.6% Filtration /
Slide 16: Filtration Segment
Filtration Segment A Leading Provider of Engineered Filtration Products to the Transportation, Health Care and Process Markets Worldwide 16
Slide 17: Filtration Segment ESCO Addressable Market
Filtration Segment ESCO Addressable Market ~$4B Served Markets: Liquid Only - - Health Care - Automotive - - Consumer & Appl. - Aerospace Growth Drivers Leadership Position in Certain Niches Driven by Technology Advancements and Customer Support Medical Devices Aerospace Fuel Delivery 17
Slide 18: RF Shielding & Test Segment
RF Shielding & Test Segment The Industry Leader in RF Shielding, Wireless and EMC Test Products 18
Slide 19: RF Shielding & Test ESCO Addressable Market
RF Shielding & Test ESCO Addressable Market ~ $500M Served Markets Wireless - Health Care Electronics - Acoustics Aerospace - Automotive Growth Drivers Proliferation of Wireless Devices and emerging technologies (such as Wi-Fi, WiMAX, etc.) International (Asia) Increasing use of MRI's and emerging M
Slide 20: ESCO Strategy
Filtration/Fluid Flow RF Shielding and Test Communications ESCO Strategy 20
Slide 21: ESCO Strategy
ESCO Strategy ESCO will increase Shareholder Value through Continued Investment in New Products Engineering Expenditures are typically 7-8% of Sales Selective Acquisitions Communications Segment is the primary focus Ongoing Performance Improvement Actions Focused on both our cost and competitive pos
Slide 22: ESCO Financial Goals
ESCO 5 Year View Sales Growth > 10% CAGR EBIT Margin > 18% EPS Growth > 15% CAGR Financial Goals 22
Slide 23: Financials
Filtration/Fluid Flow RF Shielding and Test Communications Financials 23
Slide 24: FY 2007 Segment Performance
FY 2007 Segment Performance 24
Slide 25: Pro Forma FY 2007 Segment Performance (with Doble)
Pro Forma FY 2007 Segment Performance (with Doble) Note that Doble financial performance is included in the Communications segment 25
Slide 26: Balance Sheet
Balance Sheet 26 FY'07 Cash Flow from Operating Activities $45.3M
Slide 27: Entered Orders and Backlog
Entered Orders and Backlog 27 FY'06 Entered Orders were $479.2
Slide 28: The Way Forward
The Way Forward Committed to $3.00 per share in '09 Growth in Communications from Advanced Metering and Direct Access to Water and Gas New Products in Filtration Improve the Margins and Extend our Reach in Test Selective Acquisitions Continue to Aggressively work our Cost and Competitive Position Co
Slide 29: Appendix A Reconciliation of Non-GAAP Financial Measures
Filtration/Fluid Flow RF Shielding and Test Communications Appendix A Reconciliation of Non-GAAP Financial Measures 29
Slide 30: Reconciliation of Non-GAAP Financial Measures FY 2007
Reconciliation of Non-GAAP Financial Measures FY 2007 ($M) Note: EBIT Margin greater than or equal to 18% in ESCO's Financial Goals Section cannot be reconciled with a GAAP measure as this represents a forward looking financial measure with no comparable GAAP measurement quantifiable at this time. E
Slide 31: Filtration/Fluid Flow RF Shielding and Test Communications 1
Filtration/Fluid Flow RF Shielding and Test Communications 31
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