ESCO Technologies Inc. (NYSE:ESE) Q2 2023 Results Conference Call May 9, 2023 5:00 PM ET

Company Participants

Bryan Sayler - President and CEO

Chris Tucker - Senior Vice President and CFO

Kate Lowrey - Vice President of Investor Relations

Conference Call Participants

John Franzreb - Sidoti & Company

Ross Kesselman - CJS

Operator

Good day, and thank you for standing by. Welcome to the Second Quarter 2023 ESCO Technologies Earnings Call [Operator Instructions]. Please be advised that today's conference is recorded. On the call today, we have Bryan Sayler, President and CEO; Chris Tucker, Senior Vice President and CFO.

And now I would like to hand the conference over to our first speaker today, Kate Lowrey, Vice President of Investor Relations. Kate, you now have the floor.

Kate Lowrey

Thank you. Statements made during this call, which are not strictly historical, are forward-looking statements within the meaning of the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and actual results 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, the risk factors referenced in the company's press release issued today, which will be included as an exhibit to the company's Form 8-K to be filed. We undertake no duty to update or revise any forward-looking statements, except as may be required by the applicable laws and regulations. In addition, during this call, the company may discuss some non-GAAP financial measures in describing the company's operating results. A reconciliation of these measures to their most comparable GAAP measures can be found in the press release issued today and found on the company's website at www.escotechnologies.com under the link Investor Relations.

Now I'll turn the call over to Bryan.

Bryan Sayler

Thanks, Kate, and thanks, everyone, for joining today's call. We appreciate all of you taking time to get an update on ESCO this afternoon. So our year is off to a great start, and I'm pleased to speak with all of you about our second quarter results. The first six months of fiscal 2023 have gone well, and we're pleased that the outlook remains robust as we look forward. Before I jump into the highlights for the quarter, I do want to take a moment to thank all of our employees. ESCO has delivered strong results over the last 1.5 years, and our talented and dedicated employees have been essential to these outcomes. Business has been very good, but we continue to experience a challenging operating environment. Supply chain performance has steadily improved, but it's not quite delivering with the efficiency that we experienced pre-pandemic. We also see challenges at a number of locations related to getting up to full staff. These issues do create extra burdens for our operating teams across the company, and I appreciate everyone's extra efforts to help the company adapt and improve as we continue to drive growth. With that, let me pivot into the quarterly results. We had a really strong second quarter with good sales and earnings growth. Even more exciting is the continued strength that we're seeing with orders and backlog. All three of our segments had book-to-bill ratios in excess of 100%, and we finished the quarter with $741 million of backlog. That represents a $70 million increase over March 2022 and a $46 million increase from September of '22. It's clear that we serve a dynamic customer base in high-growth industries.