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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-K
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period to
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Commission file number: 1-10596
ESCO Electronics Corporation
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Missouri 43-1554045
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
8888 Ladue Road, Ste. 200
St. Louis, Missouri 63124-2090
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(314) 213-7200
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Name of Each
Exchange on
Title of Each Class Which Registered
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Common Stock Trust Receipts New York Stock
Exchange, Inc.
Common Stock, par value $0.01 per New York Stock
share Exchange, Inc.
Preferred Stock Purchase Rights New York Stock
Exchange, Inc.
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
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 filing requirements
for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form l0-K or any amendment to this
Form l0-K. [ ]
Aggregate market value of the Common Stock Trust Receipts held by non-affiliates
of the registrant as of close of business on December 19, 1997: $195,738,287.*
* For purpose of this calculation only, without determining whether
the following are affiliates of the registrant, the registrant has
assumed that (i) its directors and executive officers are affiliates,
and (ii) no party who has filed a Schedule 13D or 13G is an
affiliate.
Number of Common Stock Trust Receipts outstanding at December 19, 1997:
11,834,229 Receipts.
DOCUMENTS INCORPORATED BY REFERENCE:
1. Portions of the registrant's Annual Report to Stockholders for fiscal year
ended September 30, 1997 (the "1997 Annual Report") (Parts I and II).
2. Portions of the registrant's Proxy Statement dated December 9, 1997 (Part
III).
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ESCO ELECTRONICS CORPORATION
INDEX TO ANNUAL REPORT ON FORM 10-K
Item Description Page
Part I
1. Business......................................................... 1
The Company............................................... 1
Products.................................................. 1
Marketing and Sales....................................... 3
Government Defense Contracts.............................. 4
Intellectual Property..................................... 6
Backlog................................................... 6
Purchased Components and Raw Materials.................... 6
Competition............................................... 6
Research and Development.................................. 7
Environmental Matters..................................... 7
Employees................................................. 8
Financing................................................. 8
History of the Business................................... 8
Forward-Looking Information...............................10
2. Properties.......................................................10
3. Legal Proceedings................................................11
4. Submission of Matters to a Vote of Security Holders..............12
Executive Officers of the Registrant........................................12
Part II
5. Market for the Registrant's Common Equity and Related
Stockholder Matters...............................................13
6. Selected Financial Data...........................................13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.............................................13
7A. Quantitative and Qualitative Disclosures About Market Risk .......13
8. Financial Statements and Supplementary Data.......................13
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure..............................................13
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Item Description Page
Part III
10. Directors and Executive Officers of the Registrant................13
11. Executive Compensation............................................14
12. Security Ownership of Certain Beneficial Owners and Management ...14
13. Certain Relationships and Related Transactions....................14
Part IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K..14
SIGNATURES ...........................................................19
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PART I
ITEM 1. BUSINESS
THE COMPANY
ESCO Electronics Corporation ("ESCO") is a holding company for the
following-listed operating subsidiaries: Distribution Control Systems, Inc.
("DCSI"), EMC Test Systems, L.P. ("ETS"), Filtertek Inc. ("Filtertek"),
Filtertek BV, Filtertek de Puerto Rico, Inc., Filtertek SA, PTI Technologies
Inc. ("PTI"), PTI Technologies Limited ("PTI Limited"), Rantec Microwave &
Electronics, Inc. ("Rantec"), Systems & Electronics Inc. ("SEI"), and VACCO
Industries ("VACCO") . These operating subsidiaries are wholly-owned
subsidiaries of Defense Holding Corp. ("DHC"), a wholly-owned subsidiary of
ESCO. ESCO and its direct and indirect wholly-owned subsidiaries are hereinafter
referred to collectively as the "Company".
The above-listed operating subsidiaries are engaged in the research,
development, manufacture, sale and support of a wide variety of defense and
commercial systems and products. Defense items principally are supplied to the
United States Government under prime contracts with the Army, Navy and Air Force
and under subcontracts with their prime contractors, and are also sold to
foreign customers. Commercial items are supplied to a variety of customers
worldwide. The Company's businesses are subject to a number of risks and
uncertainties, including without limitation those discussed below. See Item 3.
"Legal Proceedings" and "Management's Discussion and Analysis" appearing in the
1997 Annual Report.
On February 7, 1997, ESCO acquired the filtration products and thermoform
packaging businesses ("Filtertek") of Schawk, Inc.
PRODUCTS
The Company operates in two principal industry segments: defense and
commercial. See Note 11 of the Notes to Consolidated Financial Statements in the
1997 Annual Report, which Note is herein incorporated by reference.
DEFENSE PRODUCTS
The Company's defense products are described below. Current activity
includes the development of new products as well as production and support, in
the form of spare parts and service, of existing products.
DEFENSE SYSTEMS
SEI supplies light, medium and heavy transportation systems and weapon
subsystems to the armed forces. Currently in production is a multiple-wheeled
trailer with individually steerable axles for transporting large battle tanks.
In fiscal year 1997, this product (the M1000 trailer) contributed $28.1 million
in sales revenue; in fiscal year 1996, $34.0 million; and in fiscal year 1995,
$64.5 million. SEI also supplies high-capacity aircraft cargo loaders which aid
in rapid tactical and strategic deployment. The first production deliveries of a
60,000 pound capacity aircraft cargo loader developed for the U.S. Air Force
were made in late fiscal year 1997. The Air Force is currently conducting the
initial operational test and evaluation of this loader, the total production
requirement for which is expected to exceed 300 units. Further, SEI produces
light and heavy tactical bridging systems.
SEI also designs and manufactures launching and guidance systems utilizing
electro-optic technology for anti-armor missiles. These systems are manufactured
in differing configurations for installation on a variety of helicopters as well
as armored vehicles. SEI is currently developing the mission equipment package
for the
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Bradley Fire Support Team Vehicle, which is used to direct artillery fire,
locate enemy targets and provide vehicle self-location. In fiscal year 1997, SEI
was awarded a contract to apply a more advanced version of this mission
equipment package to the High-mobility Multi-purpose Wheeled Vehicle ("HMMWV").
DEFENSE ELECTRONICS
Defense electronics equipment is designed and manufactured by SEI and
Rantec. These subsidiaries primarily produce a diverse mix of military equipment
which includes, but is not limited to, the following product lines:
- SEI produces airborne radar systems for ground mapping, weather
imaging, terrain following and fire control applications. All of
these products have completed the production phase and are currently
in the spares support phase.
- SEI also supplies a lightweight man-portable surveillance radar that
detects and classifies moving personnel, vehicles, low flying
aircraft and artillery round impact.
- Automatic test equipment (ATE) for ground support of radar and other
avionics equipment is also produced by SEI. SEI is currently
developing a high power device test system which will be a part of
the U.S. Navy's family of avionics test equipment. Current activity
in the area of mobile electronic test sets, which are utilized for
testing equipment on high performance fighter aircraft as well as a
specialized military transport aircraft, is in the spares support
phase. SEI also provides interface adapters and test program software
to meet the needs of each particular unit under test.
- Rantec produces microwave antennas and antenna mounting and
positioning systems for airborne radar, missile guidance, electronic
warfare, military air traffic control and communications. Rantec also
produces power systems for use in electronic warfare and cockpit
display systems.
COMMERCIAL PRODUCTS
The Company's commercial products are described below.
FILTRATION/FLUID FLOW
PTI and PTI Limited develop and manufacture a wide range of filtration
products. PTI is a leading supplier of filters to the commercial aerospace
market. PTI's industrial business includes the supply of filtration solutions to
the industrial and mobile fluid power markets and petrochemical processing
industry. PTI also manufactures microfiltration and ultrafine filtration
products used in a variety of commercial markets and applications. PTI Limited
is a manufacturer and distributor of filter products, primarily in the European
industrial marketplace. VACCO and PTI jointly develop and manufacture industrial
filtration elements and systems primarily used within the petrochemical and
nuclear industries, where a premium is placed on superior performance in a harsh
environment. VACCO supplies latch valves, check valves and filters to the
aerospace industry, primarily for use on satellites. VACCO also uses its etched
disk technology to produce quiet valves and manifolds for U.S. Navy
applications.
Filtertek develops and manufactures a broad range of high-volume original
equipment manufacturer ("OEM") filtration products at its facilities in North
America, South America and Europe. Filtertek's products, which are centered
around its insert injection-molding technology wherein a filter medium is
inserted into the tooling prior to injection-molding of the filter housing, have
widespread applications in the medical and health care markets, automotive fluid
systems, and other commercial and industrial markets. A typical application
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can require daily production of many thousands of units, at very high levels of
quality, and is generally produced on highly-automated equipment. Many of
Filtertek's products incorporate proprietary product or process design, or both.
OTHER INDUSTRIAL /GOVERNMENT PRODUCTS
SEI supplies electronic sorting and material handling equipment to the
United States Postal Service and other customers.
Rantec designs and manufactures various power supplies, principally for
high resolution computer and avionics displays and other industrial equipment.
Filtertek, through its Tek Packaging Division, produces special
thermoform packaging for the medical, electronics, commercial and retail
markets.
COMMUNICATIONS/TEST
ETS designs and manufactures electromagnetic compatibility (EMC) test
equipment. It also supplies controlled radio frequency testing environments
(anechoic chambers), shielded structures for high security data processing, and
electromagnetic absorption materials. ETS's products include antennas, towers
and turntables, field probes, current probes, calibration equipment and other
accessories required for performing EMC testing. ETS also supplies TEM
(transverse electromagnetic) and GTEM! CELLS (gigahertz transverse
electromagnetic) test cells and associated test software. These cells and, in
particular, the GTEM! cells provide a controlled environment for quickly
performing both emission and immunity testing with minimal test setup changes.
DCSI is a leading manufacturer of two-way power line communication
systems for the utility industry. These systems provide the electric utilities
with a patented communication technology for demand-side management,
distribution automation, and automatic meter reading capabilities, thus
improving the efficiency of power delivery to the consumer of electric energy.
Rantec designs and manufactures antennas and feeds for commercial uses,
including an electronically scanned antenna used for control and navigation of
air traffic. Rantec has also developed and will produce a commercial satellite
cross-link antenna for use on the IRIDIUM(1) system, a forthcoming
communications satellite system. Rantec also produces satellite antenna systems
for use on commercial aircraft for in-flight entertainment, both audio and
video.
SEI has extensive experience in the design and manufacture of location
systems for military applications. SEI used this technological expertise to
develop a vehicle location, tracking and communications system which will have
applications in theft deterrence, fleet management and messaging communications.
SEI has also applied its expertise in image processing and target recognition to
develop a proprietary security monitoring system which should have applications
in commercial and industrial security systems.
MARKETING AND SALES
The Company's defense products predominantly are sold directly or
indirectly to the U.S. Government under contracts with the Army, Navy and Air
Force and subcontracts with prime contractors of such entities. Direct and
indirect sales to the U.S. Government accounted for approximately 44%, 53% and
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(1) IRIDIUM is a registered trademark and service mark of IRIDIUM LLC.
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70% of the Company's total sales in the fiscal years ended September 30, 1997,
1996 and 1995, respectively. The percentage figures for fiscal years 1996 and
1995 include 16% and 21%, respectively, attributable to U.S. Government sales of
Hazeltine Corporation, a former subsidiary of ESCO which was sold to GEC-Marconi
Electronic Systems Corporation ("GEC-Marconi") in July 1996. See Notes 2 and 11
of the Notes to Consolidated Financial Statements in the 1997 Annual Report,
which Notes are herein incorporated by reference.
The Company's commercial products generally are distributed to OEMs and
aftermarket users through a domestic and foreign network of distributors, sales
representatives and factory salespersons. Utility communication systems are sold
directly to the electric utilities.
International sales accounted for approximately 18%, 33% and 29% of the
Company's total sales in the fiscal years ended September 30, 1997, 1996 and
1995, respectively. The decrease in fiscal year 1997 was primarily due to the
divestiture of Hazeltine in July 1996 and lower Middle East sales at SEI.
Hazeltine's international sales in the fiscal years ended September 30, 1996 and
1995 amounted to 13% in each year of the Company's total sales. See Notes 2 and
11 of the Notes to Consolidated Financial Statements in the 1997 Annual Report.
The majority of these international sales involve defense products. Since most
of the Company's foreign export sales involve technologically advanced products,
services and expertise, U.S. export control regulations limit the types of
products and services that may be offered and the countries and governments to
which sales may be made. The Department of State issues and maintains the
International Traffic in Arms Regulations pursuant to the Arms Export Control
Act. Pursuant to these regulations, certain products and services cannot be
exported without obtaining a license from the Department of State. Most of the
defense products that the Company sells abroad cannot be sold without such a
license. Consequently, the Company's international sales may be adversely
affected by changes in the U.S. Government's export policy or by any suspension
or revocation of the Company's foreign export control licenses.
In addition, the Company's international sales are subject to risks
inherent in foreign commerce, including currency fluctuations and devaluations,
the risk of war, changes in foreign governments and their policies, differences
in foreign laws, uncertainties as to enforcement of contract rights, and
difficulties in negotiating and litigating with foreign sovereigns.
For its defense products, the Company maintains a domestic field
marketing/sales network with offices located in the Washington, D.C. area and at
several major U.S. Government defense procurement centers. The Washington, D.C.
office carries out legislative activities, and conducts customer liaison
activities with all branches of the U.S. armed services and with foreign
government offices in the Washington, D.C. area. The primary responsibility for
individual products or programs is handled within the product line
organizations, with the field organization providing closely coordinated
assistance.
GOVERNMENT DEFENSE CONTRACTS
A portion of the Company's defense contracts with the U.S. Government and
subcontracts with prime contractors of the U.S. Government are firm fixed-price
contracts. Under firm fixed-price contracts, work is performed and paid for at a
fixed amount without adjustment for the actual costs experienced in connection
with the contracts. Therefore, unless the customer actually or constructively
alters or impedes the work performed, all risk of loss due to cost overruns is
borne by the contractor. All Government prime contracts and virtually all of the
Company's subcontracts provide that they may be terminated at the convenience of
the Government. Upon such termination, the contractor is normally entitled to
receive the purchase price for delivered items, reimbursement for allowable
costs incurred and allocable to the contract (which do not include many ordinary
costs of doing business in a commercial context) and an allowance for profit on
the allowable costs incurred or adjustment for loss if completion of performance
would have resulted in a loss. The contractor is also normally entitled to
reimbursement of the cost it incurs to prepare and to negotiate a settlement of
the termination for convenience.
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In addition, the Company's prime and subcontracts provide for termination
for default if the Company fails to perform or breaches a material obligation.
In the event of a termination for default, the customer may have the unilateral
right at any time to require the Company to return unliquidated progress
payments pending final resolution of the propriety of the termination for
default. If the customer purchases the same or similar products from a third
party, the Company may also have to pay the excess, if any, of the cost of
purchasing the substitute items over the contract price in the terminated
contract. A customer, if it has suffered other ascertainable damages as a result
of a sustained default, could demand payment of such damages by the Company.
The Company incurs significant work-in-progress costs in the performance
of U.S. Government contracts. However, the Company is usually entitled to
invoice the Government for monthly progress payments. The current progress
payment rate is 75%; however, there is no assurance that this rate will not
change in the future. Any reduction in the rate would increase the amount of
working capital required for these contracts. The Government does not recognize
interest as an allowable contract expenditure; therefore, a progress payment
rate decrease may have an adverse effect on the Company's cash flow and
profitability.
The Company's backlog includes firm fixed-price U.S. Government
contracts, development programs and production programs in their early phases.
These programs have inherently high risks associated with design, first article
testing and customer acceptance. The profitability of such programs cannot be
assured, and they could represent exposure to the Company. In the event of
development or production problems that are not actually or constructively
caused by the customer, the Company would have the responsibility for proposing
and providing curative action with no additional compensation. In the event the
customer does not accept the curative action or the curative action does not
succeed, the contract could be terminated for default.
In connection with the Company's U.S. Government business, the Company is
also subject to Government investigations of its policies, procedures and
internal controls for compliance with procurement regulations and applicable
laws. The Company may be subject to downward contract price adjustments, refund
obligations or civil and criminal penalties, and suspension or debarment from
Government contracting. It is the Company's policy to cooperate with the
Government in any investigations of which it has knowledge, but the outcome of
any such Government investigations cannot be predicted with certainty.
As a U.S. Government contractor, the Company faces additional risks,
including dependence on Congressional appropriations and administrative
allotment of funds, changes in Governmental policies which may reflect military
and political developments, substantial time and effort required for design and
development, significant changes in contract scheduling, complexity of designs
and the rapidity with which products become obsolete due to technological
advances, constant necessity for design improvements, intense competition for
available Government business, and difficulty of forecasting costs and schedules
when bidding on developmental and highly sophisticated technical work (possibly
resulting in unforeseen technological difficulties and/or cost overruns).
Foreign sales involve additional risks due to possible changes in economic and
political conditions. See "Marketing and Sales" above.
As a U.S. Government contractor, recognition of revenue is based upon
certain accounting policies described in Notes 1(d) and 1(f) of the Notes to
Consolidated Financial Statements in the 1997 Annual Report, which Notes are
herein incorporated by reference. The Company's revenues are impacted by the
timing of the receipt of orders during the year, which may cause fluctuations in
quarterly sales comparisons on a year-to-year basis. The Company periodically
reviews contracts in the ordinary course to ascertain if customer actions or
inactions have caused or will cause increased costs. The Company has submitted
requests for equitable adjustments ("REAs") and claims seeking additional
compensation, which involve substantial amounts of money. To the extent these
REAs and claims are finally resolved for less than the amounts anticipated, the
Company's financial position and operating results could be adversely affected.
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INTELLECTUAL PROPERTY
The Company owns or has other rights in various forms of intellectual
property (i.e., patents, trademarks, copyrights, mask works and other items).
However, the Company believes that, although in its commercial business certain
patents are significant with respect to certain products, currently its
business, taken as a whole, is not materially dependent on intellectual property
rights. With respect to patents in particular, most of the Company's U.S.
Government contracts authorize it to use U.S. patents owned by others if
necessary in performing such contracts. Corresponding provisions in Government
contracts awarded to other companies make it impossible for the Company to
prevent others from using its patents in most domestic defense work. As the
Company expands its presence in commercial markets, it is placing a greater
emphasis on developing intellectual property and protecting its rights therein.
BACKLOG
The backlog of firm orders was approximately $228.2 million at September
30, 1997 and approximately $244.0 million at September 30, 1996. As of September
30, 1997, it is estimated that: (i) defense business accounted for approximately
48% of the firm orders and commercial business accounted for approximately 52%,
and (ii) domestic customers accounted for approximately 88% of the firm orders
and foreign customers accounted for approximately 12%. Of the total backlog of
orders at September 30, 1997, approximately 89% (including all commercial
orders) is expected to be completed in the fiscal year ending September 30,
1998.
PURCHASED COMPONENTS AND RAW MATERIALS
The Company's products require a wide variety of components and
materials. Although the Company has multiple sources of supply for most of its
material requirements, certain components are supplied by sole-source vendors,
and the Company's ability to perform certain contracts depends on their
performance. In the past, these required raw materials and various purchased
components generally have been available in sufficient quantities.
COMPETITION
The Company faces intense competition from a large number of firms for
nearly all of its products. The principal competitive factors in the defense
markets are price, service, quality, technical expertise and the ability to
design and manufacture products to desired specifications. In filtration/ fluid
flow, EMC test and commercial communications markets, competition is driven
primarily by quality, price, technology and delivery performance. For most of
its defense products and many of its commercial products, the Company's
competitors are larger and have greater financial resources than the Company. As
budgets decline, larger prime contractors may retain work which previously would
have been subcontracted. Although the Company is a leading supplier in several
of the markets it serves, the Company maintains a relatively small share of the
business in many of the markets in which it participates. Because of the
diversity and specialized nature of the Company's products, it is impossible to
state precisely its competitive position with respect to each of its products.
Substantial efforts are required in order to maintain existing business levels.
The reduced military threat posed by the former Soviet Union and the
continued domestic pressure to balance the Federal budget have led to reductions
in U.S. defense spending for military equipment. These reductions have resulted
in consolidations within the defense industry. In addition, the U.S.
Government's increasing willingness to purchase commercial products where
feasible will introduce new competitors in traditional defense markets. Further,
the U.S. Government's adoption of the Foreign Comparison Test program, wherein
the Government evaluates foreign products as a potential alternative to products
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developed by U.S. suppliers, is also expected to increase competitive pressures
in these markets. These factors have all contributed to a highly competitive
marketplace for defense products. In the international defense markets, the
continuing decline in business in most areas in which the Company participates
together with the globalization of competition have resulted in a highly
competitive environment. However, the Company's strategy of forming alliances
with several foreign companies should result in strengthening the Company's
competitive position in these markets. Political factors also enter into foreign
sales, including a foreign government's evaluation of the Company's willingness
to subcontract work content to companies located in the foreign country
involved.
The Company recognizes that domestic and international defense markets
may continue to decline, which would result in even stronger competitive
pressures. This trend could adversely affect the Company's future results unless
offset by greater foreign sales or new programs or products. The Company's
on-going commercial diversification program should allow the Company to continue
to reduce its overall dependence on its defense business and may alleviate some
of the downward pressure on sales from the increased defense market competition.
Competition in the Company's commercial markets is broadly based, and
global in scope. Individual competitors range in size from annual revenues of
less than $1 million to billion dollar enterprises, such as Pall Corporation, a
major competitor in the filtration/fluid flow market. While the Company's
commercial markets generally enjoy greater growth prospects than the defense
markets, competition can be equally intense.
RESEARCH AND DEVELOPMENT
Research and development and the Company's technological expertise are
important factors in the Company's business. Research and development programs
are designed to develop technology for new products or to extend or upgrade the
capability of existing products and to assess their commercial potential.
In addition to its work under development contracts, the Company performs
research and development at its own expense. For the fiscal years ended
September 30,1997, 1996 and 1995, total Company-sponsored research and
development expenses were approximately $6.2 million, $11.9 million and $15.1
million, respectively, and Company-sponsored research and development expenses
attributable to Hazeltine were approximately $6.1 million and $9.3 million for
the fiscal years ended September 30, 1996 and 1995, respectively. Total
customer-sponsored research and development expenses were approximately $6.3
million, $3.9 million and $10.1 million for the fiscal years ended September 30,
1997, 1996 and 1995, respectively. Such customer-sponsored expenses attributable
to Hazeltine were approximately $3.9 million and $9.1 million for the fiscal
years ended September 30, 1996 and 1995, respectively. The decreases in fiscal
years 1997 and 1996 research and development expenses were due to the
divestiture of Hazeltine in fiscal year 1996.
ENVIRONMENTAL MATTERS
The Company is involved in various stages of investigation and cleanup
relating to environmental matters. These matters primarily relate to Company
facilities located in Newbury Park, California and Riverhead, New York. Textron,
Inc. has indemnified the Company in respect of the cleanup expenses at the
Newbury Park facility. In connection with the sale of Hazeltine, the Company
retained ownership of the Riverhead facility (which is currently vacant), and
agreed to indemnify Hazeltine and GEC-Marconi against certain environmental
remediation expenses related to Hazeltine's facility at Quincy, Massachusetts.
The Company is also involved in the remediation of off-site waste disposal
facilities located in Winter Park, Florida and Jackson County, Arkansas, with
regard to both of which the Company is one of a number of potentially
responsible parties and thus bears a proportionate share of the total
remediation expenses. It is
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very difficult to estimate the potential costs of such matters and the possible
impact of these costs on the Company at this time due in part to: the
uncertainty regarding the extent of pollution; the complexity of Government laws
and regulations and their interpretations; the varying costs and effectiveness
of alternative cleanup technologies and methods; the uncertain level of
insurance or other types of cost recovery; and in the case of off-site waste
disposal facilities, the uncertain level of the Company's relative involvement
and the possibility of joint and several liability with other contributors under
applicable law. Based on information currently available, the Company does not
believe that the aggregate costs involved in the resolution of these
environmental matters will have a material adverse effect on the Company's
financial statements. See Item 3. "Legal Proceedings".
EMPLOYEES
As of October 31, 1997, the Company employed approximately 3,400 persons.
Approximately 360 of the Company's employees are covered by a collective
bargaining agreement, which expires in fiscal year 2000.
FINANCING
The Company has a credit agreement, which has been amended and restated
as of February 7, 1997, and further amended as of May 6, 1997 and as of November
21, 1997, for a $60 million term loan, amortizing at $1 million per quarter
until March 31, 1998 and at $2 million per quarter thereafter through maturity,
and an $80 million revolving credit facility (together the "Credit Facilities")
with a group of seven banks agented by Morgan Guaranty Trust Company of New
York. The Credit Facilities will mature and expire on September 30, 2000, and
contain customary events of default, including change in control of the Company.
In addition, under the Credit Facilities an event of default would occur if, for
any reason other than payment or performance in accordance with the terms of one
of the Company's contracts guaranteed by Emerson as referenced in the following
section, Emerson shall cease to be liable under its guarantees with respect to
any such contract. See "History Of The Business" below, "Management's Discussion
and Analysis--Capital Resources and Liquidity" in the 1997 Annual Report, and
Notes 7 and 12 of the Notes to Consolidated Financial Statements in the 1997
Annual Report, which Notes are herein incorporated by reference.
HISTORY OF THE BUSINESS
ESCO was incorporated in Missouri in August 1990 as a wholly-owned
subsidiary of Emerson Electric Co. ("Emerson") to be the holding company for
Electronics & Space Corp. ("E&S"), Hazeltine, Southwest Mobile Systems
Corporation ("Southwest"), Rantec, VACCO and DCSI, which were then Emerson
subsidiaries. Ownership of ESCO and its subsidiaries was distributed on October
19, 1990 (the "Distribution Date") by Emerson to its shareholders through a
special distribution (the "Distribution"). On September 30, 1992, ESCO acquired
ownership of Textron Filtration Systems, Inc. from Textron, Inc. and renamed the
entity "PTI Technologies Inc." On March 12, 1993, ESCO acquired The
Electro-Mechanics Company, a privately held company, from its shareholders. On
December 1, 1993, ESCO acquired all outstanding stock of Schumacher Filters
Limited (located in England) from Kraftanlagen, AG of Germany, and renamed this
entity "PTI Technologies Limited". On December 29, 1994, ESCO acquired the
assets of Ray Proof North America, a division of Shielding Systems Corporation,
a subsidiary of Bairnco Corporation.
Effective September 30, 1995, E&S was merged into Southwest.
Subsequently, the latter entity's name was changed to Systems & Electronics Inc.
Effective October 19, 1995, the assets of EMCO, the assets acquired from
Ray Proof North America, and the assets comprising Rantec's California and
Oklahoma radio/frequency anechoics business were
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transferred to a newly-formed Texas limited partnership, EMC Test Systems, L.P.
("ETS"). The sole general partner of ETS is Rantec Commercial, Inc., a
wholly-owned subsidiary of Rantec. The sole limited partner of ETS is Rantec
Holdings, Inc., a wholly-owned subsidiary of Defense Holding Corp.
On July 22, 1996, ESCO sold 100% of the capital stock of Hazeltine to
GEC-Marconi. On February 7, 1997, ESCO acquired the filtration products and the
thermoform packaging businesses ("Filtertek") of Schawk, Inc. See Note 2 of the
Notes to Consolidated Financial Statements in the 1997 Annual Report.
By means of the Distribution, Emerson distributed one share of ESCO's
common stock, par value $0.01 per share (the "Common Stock"), for every 20
shares of Emerson common stock owned on October 5, 1990. Pursuant to a Deposit
and Trust Agreement (the "Deposit and Trust Agreement") by and among Emerson,
ESCO and Boatmen's Trust Company, as voting trustee, in lieu of receiving a
share of Common Stock on the Distribution Date, each Emerson shareholder
received a Common Stock trust receipt (a "Receipt") representing the Common
Stock and its associated preferred stock purchase rights.
In connection with the Distribution, Emerson, ESCO and ESCO's
subsidiaries entered into various agreements which deal with, among other
things: (A) Emerson's guarantee of certain contracts of ESCO's subsidiaries
existing at September 30, 1990 pursuant to which ESCO paid Emerson a guarantee
fee of $7.4 million per year during the subsequent five (5) year period, which
ended September 30, 1995 (as of September 30, 1997, the aggregate backlog of
firm orders received by the Company was approximately $228.2 million which
included guaranteed contracts totaling approximately $4.2 million, and there
were open letters of credit with an aggregate value of approximately $2.4
million related to foreign advance payments in support of various contracts
guaranteed by Emerson); (B) the lease by E&S (which lease was guaranteed by
ESCO) from Emerson of real property in St. Louis County, Missouri which formerly
comprised ESCO's headquarters and E&S' primary manufacturing facility, and which
terminated on September 30, 1995; (C) the allocation between ESCO and Emerson of
certain rights and obligations relating to outstanding litigation,
pre-Distribution tax liabilities and certain other matters; and (D) the
provision of certain services by ESCO to Emerson and by Emerson to ESCO, which
terminated on September 30, 1995. See Note 12 of the Notes to Consolidated
Financial Statements in the 1997 Annual Report. Copies of certain of these
agreements, as well as the Deposit and Trust Agreement, are incorporated by
reference as exhibits to this Form 10-K.
Pursuant to the Deposit and Trust Agreement, if ESCO should fail in
certain circumstances to collateralize its obligation to indemnify Emerson with
respect to contracts that are directly or indirectly guaranteed by Emerson,
Emerson would have the right to direct the voting of the ESCO Common Stock
represented by the Receipts with respect to the election of directors (including
changing the size of the Board or removing directors and filling any vacancies).
Emerson has the right to require ESCO to provide collateral upon: (A) the
occurrence of certain events relating to such guaranteed contracts, including
defaults; (B) ESCO's failure to provide certain information, notices or
consultation to Emerson or to maintain certain financial ratios and covenants;
or (C) the acquisition of beneficial ownership of 20% or more of the voting
power of ESCO's outstanding capital stock by any person or group. If Emerson
requires such collateral, it is unlikely that ESCO will be able to provide it in
light of, among other things, the amount of collateral which would be required
to secure its obligations under the guaranteed contracts, which obligations may
continue even after completion of the contracts, and restrictions in its
financing arrangements unless a waiver is obtained from its lenders. See
"Financing" above and Note 8 of the Notes to Consolidated Financial Statements
in the 1997 Annual Report, which Note is herein incorporated by reference.
Effective September 30, 1993, ESCO's Board of Directors authorized an
accounting readjustment of the Company's balance sheet in accordance with the
accounting provisions applicable to a "quasi-reorganization," an elective
accounting procedure intended to restate assets and liabilities to fair values
and to eliminate any accumulated deficit in retained earnings. See Note 1(b) of
the Notes to Consolidated Financial Statements in the 1997 Annual Report, which
Note is herein incorporated by reference.
9
13
During fiscal year 1995, the Company changed its method of accounting
from amortizing the Emerson guarantee fee over the expected duration of the
guaranteed contracts (estimated benefit period of seven years) on a
straight-line basis to amortizing it based upon the related guaranteed contract
revenues generated to date and the expected future revenues. This change in
accounting principle, which is inseparable from a change in accounting estimate,
was retroactively implemented effective October 1, 1994. See Note 1(e) of the
Notes to Consolidated Financial Statements in the 1997 Annual Report, which Note
is herein incorporated by reference.
FORWARD-LOOKING INFORMATION
The statements contained in this Item 1. "Business" and in Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" concerning the Company's future revenues, profitability, financial
resources, product mix, production and deliveries, market demand, product
development and competitive position are forward-looking statements made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. 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: changing priorities or reductions in
the U.S. and worldwide defense budgets; termination of government contracts due
to unilateral government action or the Company's failure to perform; delivery
delays or defaults by customers; performance issues with key suppliers and
subcontractors; the Company's successful execution of internal operating plans;
and collective bargaining labor disputes.
ITEM 2. PROPERTIES
The Company's principal buildings contain approximately 1,911,000 square
feet of floor space. Approximately 1,548,500 square feet are owned by the
Company and approximately 362,500 square feet are leased. Substantially all of
the Company's owned properties are encumbered in connection with the Company's
Credit Facilities. See Item 1. "Business--Financing" and Note 7 of the Notes to
Consolidated Financial Statements in the 1997 Annual Report. The principal
plants and offices are as follows:
SIZE SQ. FT. PRINCIPAL USE
LOCATION (SQ. FT.) OWNED/LEASED (INDUSTRY SEGMENT)
-------- --------- ------------ ------------------
West Plains, MO 393,000 Owned Manufacturing
(Defense and Commercial)
St. Louis, MO 260,500 Owned Management and Engineering
(Defense and Commercial)
Sanford, FL 172,200 Owned Manufacturing (Defense and
Commercial)
Newbury Park, CA 144,600 Leased Management, Engineering and
Manufacturing (Defense and
Commercial)
Huntley, IL 127,000 Owned Manufacturing (Commercial)
Patillas, PR 110,000 Owned Manufacturing (Commercial)
10
14
Durant, OK 100,000 Owned Manufacturing (Commercial)
Hebron, IL 99,800 Owned Management, Engineering and
Manufacturing (Commercial)
South El Monte, CA 80,800 Owned Management, Engineering and
Manufacturing (Defense and
Commercial)
Calabasas, CA 61,700 Owned Management, Engineering and
Manufacturing (Defense and
Commercial)
Stockton, CA 55,000 Leased Manufacturing (Commercial)
Austin, TX 50,000 Leased Management, Engineering and
Manufacturing (Commercial)
Los Osos, CA 40,000 Owned Engineering and Manufacturing
(Defense and Commercial)
Newcastle West, 37,000 Owned Manufacturing (Commercial)
Ireland
St. Louis, MO 35,000 Leased Management, Engineering and
Manufacturing (Commercial)
Juarez, Mexico 34,400 Leased Manufacturing (Defense and
Commercial)
Sheffield, England 33,500 Owned Management, Manufacturing and
Distributor (Commercial)
Plailly, France 33,000 Owned Manufacturing (Commercial)
Sao Paulo, Brazil 22,000 Leased Manufacturing (Commercial)
St. Louis, MO 21,800 Leased ESCO Headquarters (Defense and
Commercial)
The Company believes its buildings, machinery and equipment have been
generally well maintained, are in good operating condition and are adequate for
the Company's current production requirements.
ITEM 3. LEGAL PROCEEDINGS
In August 1994, a class action lawsuit was filed by Ronald and Angela
Aprea and other persons against Hazeltine in the Supreme Court of the State of
New York, Suffolk County, alleging personal injury and property damage caused by
Hazeltine's purported releases of hazardous materials at Hazeltine's facility at
Greenlawn, New York. In connection with the sale of Hazeltine, the Company
indemnified Hazeltine and GEC-Marconi against expenses and potential liability
related to this suit. The suit seeks compensatory and punitive damages, and an
order enjoining Hazeltine from discharging further hazardous materials and for
Hazeltine to remediate all damage to the property of the plaintiffs. The Company
believes that no one and no property has been injured by any release of
hazardous materials from Hazeltine's facility. In fiscal year 1995, the Court
dismissed
11
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two counts of the complaint as a result of Hazeltine's motion to dismiss, and
the plaintiffs filed an amended complaint. The plaintiffs filed a motion to be
certified as a class, and, early in fiscal year 1997, the Court denied this
motion. The plaintiffs appealed, and this appeal on the class action issue is
now pending in the state appellate court. Based upon current facts, the Company
is not able to estimate the probable outcome. Therefore, no provision for this
litigation has been made in the consolidated financial statements in the 1997
Annual Report. Management believes the Company will be successful in defending
this action and that the outcome will not have a material adverse effect on the
Company's financial statements. See Note 13 of the Notes to Consolidated
Financial Statements in the 1997 Annual Report, which Note is herein
incorporated by reference. See also Item 1. "Business--Government Defense
Contracts" and "Business--Environmental Matters".
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT.
The following sets forth certain information as of December 13, 1997
with respect to ESCO's executive officers. These officers have been elected to
terms which expire at the first meeting of the Board of Directors after the next
annual meeting of stockholders.
Name Age Position(s)
---- --- -----------
Dennis J. Moore * 59 Chairman, President and Chief Executive Officer
Philip M. Ford 57 Senior Vice President and Chief Financial Officer
Walter Stark 54 Senior Vice President, Secretary and General
Counsel
Philip A. Hutchison 56 Senior Vice President, Human Resources and
Administration
- ------------
* Also a director and Chairman of the Executive Committee of the Board of
Directors.
There are no family relationships among any of the executive officers and
directors.
Since October 1992, Mr. Moore has been Chairman, President and Chief
Executive Officer of ESCO.
Mr. Ford has been Senior Vice President and Chief Financial Officer of
ESCO since October 1, 1990.
Since October 1992, Mr. Hutchison has been Senior Vice President, Human
Resources and Administration of ESCO.
Since October 1992, Mr. Stark has been Senior Vice President, Secretary
and General Counsel of ESCO.
12
16
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The information required by this item is incorporated herein by reference
to Notes 7 and 8 of the Notes to Consolidated Financial Statements, "Common
Stock Market Prices" and "Shareholders' Summary--Capital Stock Information"
appearing in the 1997 Annual Report. A special cash distribution of $3.00 per
share was paid to Stockholders in September 1996. No other cash dividends have
been declared on the Common Stock underlying the Receipts, and ESCO does not
anticipate, currently or in the foreseeable future, paying cash dividends on the
Common Stock, although it reserves the right to do so to the extent permitted by
applicable law and agreements. ESCO's dividend policy will be reviewed by the
Board of Directors at such future time as may be appropriate in light of
relevant factors at that time, based on ESCO's earnings and financial position
and such other business considerations as the Board deems relevant at that time.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item, with respect to selected financial
data, is incorporated herein by reference to "Five-Year Financial Summary" and
Note 2 of the Notes to Consolidated Financial Statements appearing in the 1997
Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item is incorporated herein by reference
to "Management's Discussion and Analysis" appearing in the 1997 Annual Report.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by reference
to the Consolidated Financial Statements of the Company on pages 17 through 34
and the report thereon of KPMG Peat Marwick LLP, independent certified public
accountants, appearing on page 35 of the 1997 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding nominees and directors appearing under "Nominees
and Continuing Directors" in ESCO's Notice of the Annual Meeting of the
Stockholders and Proxy Statement dated December 9, 1997 (the "1998 Proxy
Statement") is hereby incorporated by reference. Information regarding executive
officers is set forth in Part I of this Form 10-K.
13
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Information appearing under "Section 16(a) Beneficial Ownership Reporting
Compliance" in the 1998 Proxy Statement is hereby incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information appearing under "Board of Directors and Committees" and
"Executive Compensation" (except for the "Report of the Human Resources And
Ethics Committee On Executive Compensation" and the "Performance Graph") in the
1998 Proxy Statement is hereby incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information regarding beneficial ownership of Receipts representing
shares of common stock by nominees and directors, by executive officers, by
directors and executive officers as a group and by any five percent stockholders
appearing under "Security Ownership of Management" and "Security Ownership of
Certain Beneficial Owners" in the 1998 Proxy Statement is hereby incorporated by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report:
1. The Consolidated Financial Statements of the Company on pages
17 through 34 and the Independent Auditors' Report thereon of
KPMG Peat Marwick LLP appearing on page 35 of the 1997 Annual
Report.
2. Financial statement schedules have been omitted because the
subject matter is disclosed elsewhere in the financial
statements and notes thereto, not required or not applicable, or
the amounts are not sufficient to require submission.
3. Exhibits
Filed Herewith or Incorporated by
Exhibit Reference to Document Indicated By
Number Description Footnote
------- ------------------------------------------- ----------------------------------------
2(a)(i) Stock Purchase Agreement dated as of May Incorporated by Reference, Exhibit 2
23, 1996 between ESCO and GEC-Marconi [1]
2(a)(ii) First Amendment Agreement dated as of July Incorporated by Reference, Exhibit 2
19, 1996 to Stock Purchase Agreement listed [1]
as Exhibit 2(a)(i) above
2(b)(i) Acquisition Agreement dated December 18, Incorporated by Reference, Exhibit
1996 between the Company and Schawk, Inc. 2(a) [2]
14
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2(b)(ii) First Amendment dated as of February 6, Incorporated by Reference, Exhibit
1997 to Acquisition Agreement listed as Exhibit 2(b) [2]
2(b)(i) above
3(a) Restated Articles of Incorporation of ESCO Incorporated by Reference, Exhibit
3.1 [3]
3(b) Bylaws of ESCO, as amended Incorporated by Reference, Exhibit
3(b) [4]
4(a) Specimen certificate for ESCO's Common Incorporated by Reference, Exhibit
Stock Trust Receipts 4(a) [5]
4(b) Rights Agreement dated as of September 24, Incorporated by Reference, Exhibit
1990 between ESCO and Boatmen's Trust 4.2 [3]
Company, as Rights Agent
4(c)(i) Credit Agreement dated as of Incorporated by Reference, Exhibit 4
September 23, 1990 (as amended and [2]
restated as of December 30, 1992,
amended as of January 15, 1993, October 15, 1993
and November 29, 1993, amended and restated as of
May 27, 1994, amended as of August 5, 1994,
amended and restated as of September 29, 1995,
amended as of June 6, 1996 and August 2, 1996,
and amended and restated as of February 7,
1997) among ESCO, Defense Holding Corp., the
Banks listed therein and Morgan Guaranty Trust
Company of New York, as Agent
4(c)(ii) Amendment dated as of May 6, 1997 to Credit
Agreement listed as Exhibit 4(c)(i) above
4(c)(iii) Amendment dated as of November 21, 1997
to Credit Agreement listed as Exhibit 4(c)(i)
above
No other long-term debt instruments are filed
since the total amount of securities
authorized under any such instrument does not
exceed ten percent of the total assets of ESCO
and its subsidiaries on a consolidated basis.
ESCO agrees to furnish a copy of such
instruments to the Securities and Exchange
Commission upon request.
4(d) Deposit and Trust Agreement dated as of Incorporated by Reference, Exhibit
September 24, 1990 among ESCO, Emerson 4.3 [3]
Electric Co., Boatmen's Trust Company, as
Trustee, and the holders of Receipts from
time to time
15
19
10(a) Distribution Agreement dated as of September Incorporated by Reference, Exhibit
24, 1990 by and among ESCO, Emerson 2.1 [3]
Electric Co., and ESCO's direct and indirect
subsidiaries
10(b) Tax Agreement dated as of September 24, Incorporated by Reference, Exhibit
1990 by and among ESCO, Emerson Electric 2.2 [3]
Co., and ESCO's direct and indirect
subsidiaries
10(c)(i) 1990 Stock Option Plan* Incorporated by Reference,Exhibit
10.3 [3]
10(c)(ii) Amendment to 1990 Stock Option Plan dated Incorporated by reference, Exhibit
as of September 4, 1996* 10(c)(ii) [6]
10(d) Form of Incentive Stock Option Agreement* Incorporated by Reference, Exhibit
10(g) [5]
10(e) Form of Incentive Stock Option Agreement - Incorporated by Reference, Exhibit
Alternative* 10(h) [5]
10(f) Form of Non-Qualified Stock Option Incorporated by Refrence, Exhibit
Agreement* 10(i) [5]
10(g) Form of Split Dollar Agreement* Incorporated by Reference, Exhibit
10(j) [4]
10(h) Form of Indemnification Agreement with each Incorporated by Reference, Exhibit
of ESCO's directors. 10(k) [4]
10(i) Stock Purchase Agreement dated as of Incorporated by Reference, Exhibit
August 20, 1992 by and between Textron, Inc. 10(l) [7]
and ESCO
10(j)(i) Performance Share Plan* Incorporated by Reference [8]
10(j)(ii) Amendment to Performance Share Plan Incorporated by Reference, Exhibit
dated as of September 4, 1996* 10(j)(ii) [6]
10(k) Supplemental Executive Retirement Plan as Incorporated by Reference, Exhibit
amended and restated as of August 2, 1993* 10(n) [9]
10(l)(i) Directors' Extended Compensation Plan* Incorporated by Reference, Exhibit
10(o) [9]
10(l)(ii) Compensatory Arrangement with former Incorporated by Reference, Exhibit
ESCO director* 10(l)(ii) [6]
10(m)(i) 1994 Stock Option Plan* Incorporated by Reference [10]
10(m)(ii) Amendment to 1994 Stock Option Plan dated Incorporated by Reference, Exhibit
as of September 4, 1996* 10(m)(ii) [6]
10(n) Form of Incentive Stock Option Agreement* Incorporated by Reference, Exhibit
10(n) [11]
16
20
10(o) Form of Non-Qualified Stock Option Incorporated by Reference, Exhibit
Agreement* 10(o) [11]
10(p) Severance Plan* Incorporated by Reference, Exhibit
10(p)[11]
10(q) Performance Compensation Plan dated as of Incorporated by Reference, Exhibit
August 2, 1993 (as amended and restated as 10(q) [6]
of October 1, 1995)*
10(r) 1997 Performance Share Plan* Incorporated by Reference [12]
10(s) Notice Of Award--stock award to executive
officer*
13 The following-listed sections of the Annual
Report to Stockholders for the year ended
September 30, 1997:
Five-Year Financial Summary (p. 36)
Management's Discussion and Analysis
(pgs. 10-16)
Consolidated Financial Statements (pgs.
17-34) and Independent Auditors' Report
(p. 35)
Shareholders' Summary--Capital Stock
Information (p. 37)
Common Stock Market Prices (p. 36)
21 Subsidiaries of ESCO
23 Independent Auditors' Consent
27 Financial Data Schedule
- ---------------
[1] Incorporated by reference to Current Report on Form 8-K--date of earliest
event reported: July 22, 1996, at the Exhibit indicated
[2] Incorporated by reference to Form 10-Q for the fiscal quarter ended December
31, 1996, at the Exhibit indicated
[3] Incorporated by reference to Registration Statement on Form 10, as amended
on Form 8 filed September 27, l990, at the Exhibit indicated
[4] Incorporated by reference to Form l0-K for the fiscal year ended September
30, l991, at the Exhibit indicated
[5] Incorporated by reference to Form 10-K for the fiscal year ended September
30, 1990, at the Exhibit indicated
[6] Incorporated by reference to Form 10-K for the fiscal year ended September
30, 1996, at the Exhibit indicated.
[7] Incorporated by reference to Form 10-K for the fiscal year ended September
30, 1992, at the
17
21
Exhibit indicated
[8] Incorporated by reference to Notice of the Annual Meeting of the
Stockholders and Proxy Statement dated December 9, 1992
[9] Incorporated by reference to Form 10-K for the fiscal year ended September
30, 1993, at the Exhibit indicated
[10] Incorporated by reference to Notice of the Annual Meeting of the
Stockholders and Proxy Statement dated December 8, 1994
[11] Incorporated by reference to Form 10-K for the fiscal year ended September
30, 1995, at the Exhibit indicted
[12] Incorporated by reference to Notice of the Annual Meeting of the
Stockholders and Proxy Statement dated December 6, 1996.
* Represents a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of
this Part IV.
(b) No report on Form 8-K was filed during the quarter ended September 30,
1997.
(c) Exhibits: Reference is made to the list of exhibits in this Part IV, Item
14(a)3 above.
(d) Financial Statement Schedules: Reference is made to Part IV, Item 14(a)2
above.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(D) 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 ELECTRONICS CORPORATION
By /s/ D. J. Moore
------------------
D.J. Moore
Chairman, President and
Chief Executive Officer
Dated: December 19, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below effective December 19, 1997, by the following
persons on behalf of the registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ D. J. Moore Chairman, President, Chief
-----------------------
D.J. Moore Executive Officer and Director
/s/ P. M. Ford Senior Vice President and Chief
-----------------------
P.M. Ford Financial Officer (Principal Accounting
Officer)
/s/ J. J. Adorjan Director
-----------------------
J.J. Adorjan
/s/ W. S. Antle III Director
-----------------------
W.S. Antle III
/s/ J. J. Carey Director
-----------------------
J.J. Carey
/s/ J.M. McConnell Director
-----------------------
J.M. McConnell
/s/ D. C. Trauscht Director
-----------------------
D.C. Trauscht
19
23
INDEX TO EXHIBITS
Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in
Regulation S-K.
Exhibit No. Exhibit
4(c)(ii) Amendment dated as of May 6, 1997 to Credit Agreement listed
as Exhibit 4(c)(i) in the list of exhibits in Item 14(a)(3)
4(c)(iii) Amendment dated as of November 21, 1997 to Credit Agreement
listed as Exhibit 4(c)(i) in the list of exhibits in Item 14(a)(3)
10(s) Notice of Award--stock award to executive officer
13 The following-listed sections of the Annual Report to
Stockholders for the year ended September 30, 1997:
Five-year Financial Summary (p. 36)
Management's Discussion and Analysis (pgs. 10-16)
Consolidated Financial Statements (pgs. 17-34) and
Independent Auditors' Report (p. 35)
Shareholders' Summary--Capital Stock Information (p. 37)
Common Stock Market Prices (p. 36)
21 Subsidiaries of ESCO
23 Independent Auditors' Consent
27 Financial Data Schedule
See Item 14(a)3 for a list of exhibits incorporated by reference
20