ESCO TECHNOLOGIES INC - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

----------------------------------

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, 2002

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period 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 (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)

8888 Ladue Road, Ste. 200
St. Louis, Missouri 63124-2056
(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
------------------- ----------------

Common Stock, par value $0.01 per New York Stock
share Exchange, Inc.

Preferred Stock Purchase Rights New York Stock
Exchange, Inc.

(Cover page 1 of 2 pages)

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. [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes X No
--- ---

Aggregate market value of the Common Stock held by non-affiliates of the
registrant as of close of business on December 16, 2002: $444,932,178.*

* 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 shares of Common Stock outstanding at December 16, 2002:12,560,878

DOCUMENTS INCORPORATED BY REFERENCE:

1. Portions of the registrant's Annual Report to Stockholders for fiscal year
ended September 30, 2002 (the "2002 Annual Report") (Parts I and II).

2. Portions of the registrant's Proxy Statement dated December 18, 2002
(Part III).

(Cover page 2 of 2 pages)

ESCO TECHNOLOGIES INC.
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
Intellectual Property................................................... 4
Backlog................................................................. 4
Purchased Components and Raw Materials.................................. 4
Competition............................................................. 5
Research and Development................................................ 5
Environmental Matters................................................... 5
Government Contracts.................................................... 6
Employees............................................................... 6
Financing............................................................... 6
History of the Business................................................. 6
Forward-Looking Information............................................. 7
Available Information................................................... 7

2. Properties..................................................................... 7

3. Legal Proceedings.............................................................. 9

4. Submission of Matters to a Vote of Security Holders............................ 9

Executive Officers of the Registrant...................................................... 9

Part II

5. Market for the Registrant's Common Equity and Related
Stockholder Matters............................................................ 10

6. Selected Financial Data........................................................ 10

7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.......................................................... 10

7A. Quantitative and Qualitative Disclosures About Market Risk..................... 10

8. Financial Statements and Supplementary Data.................................... 10

9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure........................................................... 11

I

Item Description Page
- ---- ----------- ----

Part III

10. Directors and Executive Officers of the Registrant............................. 11

11. Executive Compensation......................................................... 11

12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters................................................ 11

Equity Compensation Plan Information.................................... 11

13. Certain Relationships and Related Transactions................................. 12

14. Controls and Procedures........................................................ 13

Part IV

15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K............... 13

SIGNATURES ............................................................................... 18

CERTIFICATIONS............................................................................ 19

INDEX TO EXHIBITS ........................................................................ 22

II

PART I

ITEM 1. BUSINESS

THE COMPANY

ESCO Technologies Inc. ("ESCO") is a producer of engineered products and
systems for industrial and commercial applications sold to customers world-wide.
ESCO operates in four industry segments which, together with the operating
subsidiaries within each segment, are as follows:

Filtration/Fluid Flow:
---------------------
PTI Technologies Inc.
PTI Advanced Filtration Inc.
PTI Technologies Limited
PTI S.p.A.
Filtertek Inc.
Filtertek BV
Filtertek de Puerto Rico, Inc.
Filtertek do Brazil Industria E Commerico Limitada
Filtertek SA
VACCO Industries ("VACCO")
ESCO Electronica De Mexico, S.A. de C.V.

Communications:
--------------
Distribution Control Systems, Inc. ("DCSI")
Distribution Control Systems Caribe, Inc. ("DCSI-Caribe")
Comtrak Technologies, L.L.C. ("Comtrak")

Test:
----
EMC Test Systems, L.P. ("ETS")
Lindgren R.F. Enclosures, Inc. ("Lindgren")
Ray Proof Limited
Euroshield OY

Other:
-----
Rantec Power Systems Inc. ("Rantec")

The above operating subsidiaries are engaged primarily in the research,
development, manufacture, sale and support of the products and systems described
below, and are subsidiaries of ESCO Technologies Holding Inc., a wholly-owned
direct subsidiary of ESCO. ESCO and its direct and indirect subsidiaries are
hereinafter referred to collectively as the "Company". The Company's businesses
are subject to a number of risks and uncertainties, including without limitation
those discussed below. See "Management's Discussion and Analysis" appearing in
the 2002 Annual Report and "Forward-Looking Information" below.

PRODUCTS

The Company's products are described below. See Note 12 of the Notes to
Consolidated Financial Statements in the 2002 Annual Report for financial
information regarding segments, which Note is herein incorporated by reference.

FILTRATION/FLUID FLOW

The Company's Filtration/Fluid Flow segment accounted for approximately
52% of the Company's total revenue in fiscal year 2002.

The PTI group of companies develops and manufactures a wide range of
filtration products. PTI

1

Technologies Inc. is a leading supplier of filters to the commercial aerospace
and industrial markets. The industrial business includes the supply of
filtration products for process and mobile fluid power applications. PTI
Advanced Filtration Inc. ("PTA") and its integrated business units of PTI
Technologies Limited and PTI S.p.A. (successor to Bea Filtri S.p.A.) produce
membrane-based microfiltration and separation products and systems for use in
process scale filtration and separation applications. Their key customer
segments include the food and beverage, pharmaceutical, healthcare,
microelectronics, industrial coatings and petrochemical markets. The acquisition
of flat sheet module technology in fiscal 2002 from North Carolina SRT Inc.
allows PTA to broaden its filtration and separation product lines for these
markets. PTI Technologies Limited, located in England, and PTI S.p.A., located
in Italy, primarily serve the European market. VACCO supplies flow control
products to the aerospace industry for use in aircraft, satellite propulsion
systems, satellite launch vehicles and the space shuttle. VACCO also uses its
etched disc technology to produce quiet valves and manifolds for U.S. Navy and
severe service industrial applications.

All of the Filtertek entities listed above under "THE COMPANY" are
hereinafter collectively referred to as "Filtertek". Filtertek develops and
manufactures a broad range of high-volume 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 system market, and other commercial and industrial markets. Typical
Filtertek customers may require daily production of many thousands of units, at
very high levels of quality, that are generally produced in highly-automated
manufacturing cells. Many of Filtertek's products are produced utilizing
patented designs or proprietary product or process design, or both. Filtertek's
products are typically supplied to original equipment manufacturers under
long-term contracts. In fiscal year 2002, Filtertek introduced a number of new
products including diesel fuel injection filters and pleated fuel pump filter
modules, newly patented transmission sump filters, new cell culture filtration
products, drug delivery flow control devices, and industrial products such as
spray paint system filters.

COMMUNICATIONS

In fiscal year 2002, approximately 26% of the Company's total revenue was
derived from its Communications segment.

DCSI is a leading manufacturer of two-way power line communication
systems for the utility industry. These systems provide electric utilities with
a patented communication technology for automatic meter reading, demand-side
management and distribution automation (the TWACS(R) systems). Revenue from the
TWACS systems accounted for approximately 25%, 16% and 14% of the Company's
consolidated revenue in fiscal years 2002, 2001 and 2000, respectively. During
fiscal year 2002, DCSI was awarded a $112 million multi-year contract by PPL
Electric Utilities Corporation for a TWACS automatic meter reading system.
Revenue of $31.5 million was generated from this contract in fiscal 2002.
Revenue from this contract is expected to continue through fiscal year 2004. In
addition, revenue from a $50 million follow-on contract with Puerto Rico
Electric Power Authority awarded in fiscal 2001 amounted to $10.4 million in
fiscal 2002. This contract is expected to continue through fiscal year 2006.
These contracts may be terminated at the convenience of the customer, in which
event the Company is entitled to receive equitable compensation for work
performed prior to the termination in addition to reimbursement of costs
relating to the termination. In May 2002, the $9.3 million contract awarded to
DCSI in fiscal 2001 by Wisconsin Public Service Corp. ("WPS"), after successful
completion of its first-phase TWACS system installation, was temporarily halted
voluntarily to conduct tests to evaluate the potential impact of stray voltage
on dairy farms. The evaluation study concluded that the impact, if any, of power
line readings utilizing the TWACS system did not adversely contribute to stray
voltage and would not cause the stray voltage to exceed the level of concern
previously established by the Public Service Commission of Wisconsin. WPS
indicated it was set to resume deployment of its automatic meter reading system
and the TWACS technology. However, for reasons unrelated to the TWACS system,
WPS voluntarily decided that it would not install the TWACS system on
5,000-6,000 dairy farms, which represent approximately one percent of the total
meters in its service territory. Electric utility cooperatives continue to
represent a solid business base. In fiscal 2002, revenue of $38 million was
generated from a total of 65 such customers.

Comtrak manufactures advanced video security monitoring systems, which
have applications in commercial and industrial security systems. Comtrak is
continuing to work jointly with ADT Security Services, Inc., who is selling this
system under its SecurVision(R) trademark to a variety of markets.

2

TEST

The Company's Test segment accounted for approximately 19% of the
Company's total revenue in fiscal year 2002.

ETS designs and manufactures electromagnetic compatibility ("EMC") test
equipment. It also supplies controlled radio frequency ("RF") testing
environments (anechoic chambers) and electromagnetic absorption materials for
the telecommunications, transportation and industrial sectors. ETS's products
include antennas, antenna masts, turntables, current probes, field probes, TEM
(transverse electromagnetic) cells, GTEM (gigahertz transverse electromagnetic)
cells, calibration equipment and other test accessories required to perform a
variety of RF tests. ETS also provides all the design, program management and
integration services required to supply customers with turnkey EMC solutions.
Following the integration of the operations of Holaday Industries, Inc. into
ETS, its products include probes, meters, analysis software, personal protection
equipment and components used by original equipment manufacturers and service
professionals. ETS now also performs calibration certification services for its
probes, meters and other components.

Lindgren designs, manufactures, installs and services electromagnetic
("EM") shielding systems used in medical equipment, wireless communication
product testing and electronics products. Lindgren's products include RF and
magnetic shielding for magnetic resonance imaging ("MRI") rooms, shielded test
enclosures, RF filters, fiber optic interface components, active magnetic field
compensation systems, and a line of proprietary doors designed specifically for
EM isolation, containment and measurement applications. Lindgren also supplies
special high performance RF and acoustic shielded rooms for secure data
processing and communications for government security applications.

Euroshield OY designs and manufactures a broad range of modular shielding
systems and shielded doors, some of which are proprietary, for
telecommunications and industrial applications in the world market. It also
provides the design, program management and integration services to supply the
European market with turnkey solutions.

In fiscal year 2002, the Test segment significantly expanded its Asian
presence with the establishment of operations in both China and Japan.

OTHER

The Company's Other products segment represented approximately 3% of the
Company's total revenue in fiscal year 2002.

Rantec designs and manufactures high voltage and low voltage power
supplies and DC to DC converters which are marketed to a broad range of
customers worldwide. Applications include medical and avionics CRT displays, as
well as ground-based, shipboard and airborne electronic systems.

MARKETING AND SALES

The Company's Filtration/Fluid Flow and Test segments' products generally
are distributed to customers through a domestic and foreign network of
distributors, sales representatives and factory salespersons. The Communications
and Other segments' systems are primarily sold directly to the respective end
users; however, the Communications segment utilizes distributors and sales
representatives to sell its systems to the electric utility cooperative market.

The Company's international sales accounted for approximately 25%, 22%
and 23% of the Company's total sales in the fiscal years ended September 30,
2002, 2001 and 2000, respectively. The increase in fiscal 2002 as compared to
fiscal 2001 is primarily due to the acquisition of Bea Filtri S.p.A. in June
2001. See Note 12 of the Notes to Consolidated Financial Statements in the 2002
Annual Report for financial information regarding geographic areas.

3

The Company's international sales are subject to risks inherent in
foreign commerce, including currency fluctuations and devaluations, the risk of
war and terrorism, 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 customers.

Some of the Company's products 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 8%, 12% and 8% of the
Company's total sales in the fiscal years ended September 30, 2002, 2001 and
2000, respectively.

INTELLECTUAL PROPERTY

The Company owns or has other rights in various forms of intellectual
property (i.e., patents, trademarks, service marks, copyrights, mask works,
trade secrets and other items). As a major supplier of engineered products to
growing industrial and commercial markets, the Company emphasizes developing
intellectual property and protecting its rights therein. However, the scope of
protection afforded by intellectual property rights, including those of the
Company, is often uncertain and involves complex legal and factual issues. Some
intellectual property rights, such as patents, have only a limited term. Also,
there can be no assurance that issued patents will not be infringed or designed
around by others. In addition, the Company may not elect to pursue an infringer
due to the high costs and uncertainties associated with litigation. Further,
there can be no assurance that courts will ultimately hold issued patents valid
and enforceable.

With respect to the Filtration/Fluid Flow segment, an increasing number
of products are based on patented or otherwise proprietary technology that sets
them apart from the competition. Of particular importance to Filtertek is a
United States patent covering certain transmission sump filters, which will
expire approximately May 1, 2009. In March 2002, the Company acquired exclusive
rights to the patent portfolio and related intellectual property of North
Carolina SRT Inc. and its affiliate ("NCSRT") (including its flat sheet module
technology), a manufacturer of cross-flow filtration and separation modules and
equipment. In the Communications segment, many of the products are based on
patented or otherwise proprietary technology. Patents covering the products in
the Communications segment have varying expiration dates ranging between 2004
and 2013. The Communications segment policy is to seek patent and/or other forms
of intellectual property protection on new and improved products, components of
products and methods of operation for its businesses, as such developments are
made. In the Test and Other segments, patent protection is sought for
significant inventions.

The Company considers its patent and other intellectual property to be
of significant value in each of its segments. The Communications segment owns
intellectual property, including its TWACS technology, which it deems necessary
or desirable for the manufacture, use or sale of its products. No other segment
is materially dependent on any single patent, group of patents or other
intellectual property.

BACKLOG

Total Company backlog at September 30, 2002 was $293.2 million,
representing an increase of $113.1 million (62.8%) from the beginning of the
fiscal year backlog of $180.1 million. The backlog of firm orders at September
30, 2002 and September 30, 2001, respectively, was: $80.3 million and $70.8
million for Filtration/Fluid Flow; $170.7 million and $72.8 million for
Communications; $34.3 million and $27.4 million for Test; and $8.0 million and
$9.1 million for Other. As of September 30, 2002, it is estimated that domestic
customers accounted for approximately 81% of the Company's total firm orders,
and international customers accounted for approximately 19%. Of the Company's
total backlog of orders at September 30, 2002, approximately 69% is expected to
be completed in the fiscal year ending September 30, 2003.

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 and raw materials 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

4

been available in sufficient quantities. The Filtration/Fluid Flow segment
purchases supplies from a wide array of vendors. In most instances, multiple
vendors of raw materials are screened during a qualification process to ensure
that there will not be an interruption of supply should one of them discontinue
operations. In the Communications segment, DCSI utilizes a limited number of
sources to produce substantially all of DCSI's end-products. The Test segment is
a vertically integrated supplier of EM shielding products, producing most of its
critical RF components. This capability enables the Test segment to control the
level of quality, RF performance and delivery response time for its customers.

COMPETITION

Competition in the Company's major markets is broadly based and global in
scope. The Company faces intense competition from a large number of firms for
nearly all of its products. Competition can be particularly intense during
periods of economic slowdown, and this has been experienced in the past in some
of the Filtration/Fluid Flow markets. Although the Company is a leading supplier
in several of the markets it serves, it maintains a relatively small share of
the business in many of the markets in which it participates. Individual
competitors range in size from annual revenues of less than $1 million to
billion dollar enterprises. Because of the specialized nature of the Company's
products, it is impossible to state precisely its competitive position with
respect to its products. Substantial efforts are required in order to maintain
existing business levels. In the Company's major served markets, competition is
driven primarily by quality, technology, price and delivery performance. The
following information concerns the Company's primary segments.

Pall Corporation is a major competitor in the Filtration/Fluid Flow
market. Other significant competitors in this market include Millipore Corp.,
Osmonics Inc. and Cuno Inc.

Primary competitors of the Communications segment in the utility
communications market include Itron, Inc. and Schlumberger Limited.

The Test segment is the global leader in the EM shielding market.
Significant competitors in this served market include Braden Shielding Systems
and TDK RF Solutions Inc.

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 enhance their commercial potential.

The Company performs research and development at its own expense, and
also engages in research and development funded by customers. For the fiscal
years ended September 30, 2002, 2001 and 2000, total Company-sponsored research
and development expenses were approximately $14.9 million, $9.7 million and $6.1
million, respectively. The increase in fiscal 2002 for Company-sponsored
research and development expenses was due to additional investments made within
the Filtration/Fluid Flow and Communications segments. Total customer-sponsored
research and development expenses were approximately $6.2 million, $5.2 million
and $4.0 million for the fiscal years ended September 30, 2002, 2001 and 2000,
respectively. All of the foregoing expense amounts exclude certain engineering
costs primarily associated with product line extensions, modifications and
maintenance, which amounted to approximately $7.8 million, $10.5 million and
$8.4 million for the fiscal years ended September 30, 2002, 2001 and 2000,
respectively.

ENVIRONMENTAL MATTERS

The Company is involved in various stages of investigation and cleanup
relating to environmental matters. It is 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

5

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 any of its environmental matters will have a
material adverse effect on the Company's financial statements.

GOVERNMENT CONTRACTS

The Company's contracts with the U.S. Government and subcontracts with
prime contractors of the U.S. Government are primarily firm fixed price
contracts under which 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 Company.
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 Company is normally entitled to receive equitable
compensation for same. See "Marketing And Sales" in this Item 1 for additional
information regarding Government contracts.

EMPLOYEES

As of November 30, 2002, the Company employed approximately 2,500
persons. Approximately 190 of these employees are covered by a collective
bargaining agreement, which will expire in fiscal year 2005.

FINANCING

Effective April 5, 2002, the Company amended its existing $75 million
revolving credit facility, changing the previously scheduled reductions and
extending the Company's option to increase the credit facility by $25 million
through April 11, 2004. The amendment calls for $5 million reductions to the
credit facility on each April 11 beginning in 2002 through 2004, with the
balance due upon maturity and expiration, April 11, 2005. As of September 30,
2002, the Company had not exercised the increase option, and the revolving line
of credit was $70 million. The credit facility is available for direct
borrowings and/or the issuance of letters of credit. The credit facility is
provided by a group of five banks, led by Bank of America. Substantially all of
the assets of the Company are pledged under the credit facility. The credit
facility contains customary events of default, including change in control of
the Company. See "Management's Discussion and Analysis--Capital Resources &
Liquidity" in the 2002 Annual Report, and Note 8 of the Notes to Consolidated
Financial Statements in the 2002 Annual Report, which information is 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 indirect holding
company for several Emerson subsidiaries, which were primarily in the defense
business. Ownership of ESCO and its subsidiaries was distributed on October 19,
1990 by Emerson to its shareholders through a special distribution. In September
1999, the Company completed the divestiture of Systems & Electronics Inc.
("SEI"), and shifted the Company's focus from defense contracting to the supply
of engineered products marketed to industrial and commercial users. Effective
July 10, 2000, ESCO changed its name from ESCO Electronics Corporation to ESCO
Technologies Inc.

In March 2002, the Company acquired the exclusive rights to the patent
portfolio and related intellectual property of North Carolina SRT, Inc. and its
affiliate, a manufacturer of cross-flow filtration and separation modules and
equipment. This business is included in the Filtration/Fluid Flow segment.

In fiscal year 2002, the Company completed the consolidation of the
operations of Holaday Industries, Inc. and the Lindgren facilities in Minnesota
and Florida into the Test segment's new facility in Cedar Park, Texas.

6

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" of the 2002 Annual Report concerning the Company's future revenues,
profitability, financial resources, utilization of net deferred tax assets,
product mix, production and deliveries, market demand, product development,
competitive position, impact of environmental matters and statements containing
phrases such as "believes", "anticipates", "may", "could", "should", and "is
expected to" 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: further weakening of economic conditions in served markets; changes
in customer demands or customer insolvencies; competition; intellectual property
rights; consolidation of internal operations; integration of recently acquired
businesses; delivery delays or defaults by customers; termination for
convenience of customer contracts; performance issues with key suppliers and
subcontractors; collective bargaining and labor disputes; changes in laws and
regulations; litigation uncertainty; and the Company's successful execution of
internal operating plans.

AVAILABLE INFORMATION

The Company makes available free of charge through its Internet website,
www.escotechnologies.com, its annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended, as soon as reasonably practicable after such material is
electronically filed with or furnished to the Securities and Exchange
Commission.

ITEM 2. PROPERTIES

The Company's principal buildings contain approximately_________________
square feet of floor space. Approximately ___________________square feet are
owned by the Company and approximately __________________square feet are leased.
Substantially all of the Company's owned properties are encumbered in connection
with the Company's credit facility. See Item 1. "Business--Financing" and Note 8
of the Notes to Consolidated Financial Statements in the 2002 Annual Report,
which information is herein incorporated by reference. The principal plants and
offices are as follows:

SQ. FT. LEASE
SIZE OWNED/ EXPIRATION PRINCIPAL USE
LOCATION (SQ. FT.) LEASED DATE (INDUSTRY SEGMENT)
- -------- --------- ------ ------------- ------------------

Oxnard, CA 127,400 Leased 12-29-05 Management, Engineering and
Manufacturing (Filtration/Fluid
Flow)

Oxnard, CA 125,000 Leased 12-29-05 Management, Engineering and
Manufacturing (Filtration/Fluid
Flow)

Patillas, PR 110,000 Owned Manufacturing (Filtration/Fluid
Flow)

Durant, OK 100,000 Owned Manufacturing (Test)

Hebron, IL 99,800 Owned Management, Engineering and
Manufacturing (Filtration/Fluid
Flow)

Milan, Italy 85,700 Leased 6-7-13 Management, Engineering and
(w/one 6-year Manufacturing (Filtration/Fluid
renewal option) Flow)

7

Huntley, IL 85,000 Owned Manufacturing (Filtration/Fluid
Flow)

South El Monte, CA 80,800 Owned Management, Engineering and
Manufacturing (Filtration/Fluid
Flow)

Cedar Park, TX 70,000 Leased 12-29-05 Management, Engineering and
Manufacturing (Test)

Glendale Heights, IL 59,400 Leased 3-31-05 Management, Engineering and
(w/one 5-year Manufacturing (Test)
and three 3-year
renewal options)

Los Osos, CA 40,000 Owned Management, Engineering and
Manufacturing
(Other Products)

Newcastle West, 37,000 Owned Manufacturing (Filtration/Fluid
Ireland Flow)

St. Louis, MO* 35,000 Owned Management and Engineering
(Communications)

Juarez, Mexico 34,400 Leased 12-31-04 Engineering and Manufacturing
(Filtration/Fluid Flow)

Sheffield, England 33,500 Owned Management, Engineering and
Manufacturing (Filtration/Fluid
Flow)

Plailly, France 33,000 Owned Engineering and Manufacturing
(Filtration/Fluid Flow)

Sao Paulo, Brazil 31,000 Leased 12-14-04 Manufacturing (Filtration/Fluid
Flow)

Minocqua, WI 30,200 Leased 3-31-05 Engineering and Manufacturing
(w/one 5-year, (Test)
and three 3-
year renewal
options)

Eura, Finland 29,300 Owned Management, Engineering and
Manufacturing (Test)

Stevenage, England 25,650 Leased 8-11-17 Management, Engineering and
(w/option to Manufacturing (Test)
terminate on
8-12-07)

St. Louis, MO 21,800 Leased 8-31-05 ESCO Headquarters
(w/two 5-year
renewal options)

8

Beijing, China 21,400 Leased 3-1-05 Manufacturing (Test)

- -----------------------

* This facility will be replaced in fiscal 2003 by a 58,600 square foot leased
facility, with a lease expiration date of March 31, 2008, with two five-year
renewal options.

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

As a normal incident of the businesses in which the Company is engaged,
various claims, charges and litigation are asserted or commenced against the
Company. The Company believes that final judgments, if any, which might be
rendered against the Company in current litigation are adequately reserved,
covered by insurance, or would not have a material adverse effect on its
financial statements.

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 16, 2002 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 * 64 Chairman and Director

Victor L. Richey, Jr. 45 Chief Executive Officer and Director

Charles J. Kretschmer 46 President, Chief Operating Officer and Director

Gary E. Muenster 42 Vice President and Chief Financial Officer

Alyson S. Barclay 43 Vice President, Secretary and General Counsel

- ------------

* Also Chairman of the Executive Committee of the Board of Directors.

There are no family relationships among any of the executive officers and
directors.

Mr. Moore was Chairman, President and Chief Executive Officer of ESCO
from October 1992 until August 2001, Chairman and Chief Executive Officer from
August 2001 to October 2002, and Chairman since the latter date.

From February 1997 until March 1998, Mr. Richey was Vice President of
Systems & Electronics Inc. (then a subsidiary of ESCO). From March 1998 until
October 2000, he was Vice President of ESCO, and was Senior Vice President and
Group Executive from October 2000 until August 2001. Mr. Richey was President
and Chief Operating Officer from August 2001 until October 2002, and he has been
Chief Executive Officer

9

since the latter date.

From August 1997 until October 1999, Mr. Kretschmer was Vice President of
the Company. He was Vice President and Chief Financial Officer from October 1999
until February 2001, and Senior Vice President and Chief Financial Officer from
February 2001 until February 2002, Executive Vice President and Chief Financial
Officer from February 2002 to October 2002, and he has been President and Chief
Operating Officer since the latter date.

Mr. Muenster was Vice President and Controller of ESCO from February 2000
until October 2002. Since the latter date, he has been Vice President and Chief
Financial Officer.

Ms. Barclay has been Vice President, Secretary and General Counsel of
ESCO since October 1999.

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 Note 9 of the Notes to Consolidated Financial Statements, "Common Stock
Market Price" and "Shareholders' Summary--Capital Stock Information" appearing
in the 2002 Annual Report. 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. See Item 12 for equity compensation
plan information.

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 3 of the Notes to Consolidated Financial Statements appearing in the 2002
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 2002 Annual Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is incorporated herein by reference
to "Management's Discussion and Analysis - Market Risk Analysis" appearing in
the 2002 Annual Report.

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 25 through 48
and the report thereon of KPMG LLP, independent certified public accountants,
appearing on page 50 of the 2002 Annual Report.

At September 30, 2000, the consolidated total of identifiable assets was
$331.1 million. The detail by segment consisted of the following:
Filtration/Fluid Flow was $198.2 million; Communications was $21.6 million; Test
was $61.2 million; Other was $7.4 million; and Corporate assets were $42.7
million.

At September 30, 2000, the consolidated total of long-lived assets was
$62.6 million, of which $55.9

10

million were located in North America and $6.7 million were located in Europe.

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 18, 2002 (the "2003 Proxy
Statement") is hereby incorporated by reference. Information regarding executive
officers is set forth in Part I of this Form 10-K.

Information appearing under "Section 16(a) Beneficial Ownership Reporting
Compliance" in the 2003 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
2003 Proxy Statement is hereby incorporated by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The information regarding beneficial ownership of shares of common stock
by nominees and directors, by executive officers, by directors and executive
officers as a group and by any known five percent stockholders appearing under
"Security Ownership of Management" and "Security Ownership of Certain Beneficial
Owners" in the 2003 Proxy Statement is hereby incorporated by reference.

EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes certain information regarding shares of
the Company's common stock ("Common Shares") that may be issued pursuant to its
equity compensation plans as of September 30, 2002.

Number of securities
remaining available for
Number of securities to be Weighted-average future issuance under
issued upon exercise of exercise price of equity compensation plans
outstanding options, outstanding options, (excluding securities
Plan Category warrants and rights warrants and rights reflected in column (a)
------------- ------------------- -------------------- -----------------------
(a) (b) (c)

Equity compensation plans approved by
security holders (1) 1,391,305 (2) $11.8777 (3) 122,195 (2)(4)

Equity compensation plans not approved
by security holders (5) 0 N/A 192,525 (6)

Total 1,391,305 $11.8777 314,720

- ------------------

11

(1) The Company's 1994 and 1999 Stock Option Plans have been amended and
restated without shareholder approval in accordance with their terms to
reflect the change of the Company's name and the elimination of the
Company's common stock trust receipts, to provide for withholding, to
provide for adjustment upon a special distribution and/or in certain other
respects. In July 2002, the 1994 Stock Option Plan was also amended without
shareholder approval in accordance with its terms to permit the Human
Resources and Ethics Committee, in its discretion, to extend the period
during which an optionee who terminates employment on account of retirement
on or after age 60 may exercise his stock option to five years after
retirement, but before ten years from the date of grant.

(2) Number of Common Shares is subject to adjustment for changes in
capitalization for stock splits, stock dividends and similar events.
Includes Common Shares issuable in connection with the vesting and
distribution of performance-accelerated restricted share awards under the
Company's 2001 Stock Incentive Plan.

(3) Does not include 352,267 Common Shares issuable in connection with the
vesting and distribution of outstanding performance-accelerated restricted
share awards under the 2001 Stock Incentive Plan, for which there are no
exercise prices.

(4) On October 1 of each of 2002, 2003 and 2004, there will be added to the
authorized shares allocated to the 2001 Stock Incentive Plan the lesser of
(i) 1% of the total outstanding shares as of each such date, or (ii)
125,000 shares, which may be used for the grant of stock options, SARs,
performance share awards or other stock-based awards; provided, however,
that not more than 200,000 of such additional shares may be used for
performance share awards or other stock-based awards.

(5) Does not include an indeterminate number of shares that may be purchased
pursuant to the Company's Employee Stock Purchase Plan (the "ESPP"), which
provides a method by which employees of the Company and its domestic
subsidiaries or divisions may purchase Common Shares. Pursuant to the ESPP,
participants may authorize the Company to make deductions from their pay to
be applied to the purchase of Common Shares. Deductions must be between 1%
and 10% of current salary or wages. At the discretion of the Company, the
Company or a domestic subsidiary or division may contribute, in cash or in
Common Shares, an amount not to exceed 15% of the amounts contributed by
participants. Cash contributed is used to purchase Common Shares on a
monthly basis in transactions on the New York Stock Exchange or from the
Company or from sellers in private transactions. The Common Shares so
purchased are maintained in a book-entry account by the ESPP trustee for
each participant.

(6) Represents Common Shares issuable pursuant to the Compensation Plan for
Non-Employee Directors (the "Compensation Plan"), which provides for each
director to be paid an annual retainer fee payable partially in cash and
partially in Common Shares. Periodically, the Human Resources and Ethics
Committee of the Board of Directors determines the amount of the retainer
fee and the allocation of the fee between cash and Common Shares. The
retainer fee is payable or distributable in quarterly installments.
Directors may elect to defer receipt of all of the cash portion and/or all
of the stock portion of the quarterly retainer. The deferred amounts are
credited to the director's deferred compensation account in stock
equivalents. Deferred amounts are distributed in Common Shares or cash at
such future dates as specified by the director unless distribution is
accelerated in certain circumstances, including a change in control of the
Company. The stock portion which has been deferred may only be distributed
in Common Shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

12

ITEM 14 CONTROLS AND PROCEDURES

Within the 90 days prior to the filing date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures as defined in Rules 13a-14(c) and
15d-14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Based upon that evaluation, the Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective. Disclosure controls and procedures are controls and
procedures that are designed to ensure that information required to be disclosed
in Company reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms.

There have been no significant changes in the Company's internal controls
or in other factors that could significantly affect those controls subsequent to
the date this evaluation was carried out, including any corrective actions with
regard to significant deficiencies and material weaknesses.

PART IV

ITEM 15. 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
25 through 48 and the Independent Auditors' Report thereon of KPMG
LLP appearing on page 50 of the 2002 Annual Report.

2. Financial Statement Schedules

II. Valuation and Qualifying Accounts

Other 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

13

4.4 Amended and Restated Credit Agreement dated as of Incorporated by Reference, Exhibit 4(d)[6]
February 28, 2001, among the Registrant, Bank of
America, N.A., as agent, and the lenders listed
therein

4.5 Amendment No. 1 dated as of April 5, 2002 to Incorporated by Reference, Exhibit 4(e)[7]
Credit Agreement listed as Exhibit 4.4 above

10.1 Form of Split Dollar Agreement* Incorporated by Reference, Exhibit
10(j)[8]

10.2 Form of Indemnification Agreement with each of Incorporated by Reference, Exhibit
ESCO's directors. 10(k)[8]

10.3 Supplemental Executive Retirement Plan as amended Incorporated by Reference, Exhibit
and restated as of August 2, 1993* 10(n)[9]

10.4 Second Amendment to Supplemental Executive Incorporated by Reference, Exhibit
Retirement Plan effective May 10, 2001* 10.4[10]

10.5 Directors' Extended Compensation Plan* Incorporated by Reference, Exhibit
10(o)[9]

10.6 First Amendment to Directors' Extended Incorporated by Reference, Exhibit
Compensation Plan* 10.11[11]

10.7 Second Amendment to Directors' Extended Incorporated by Reference, Exhibit
Compensation Plan effective April 1, 2001* 10.7[10]

10.8 1994 Stock Option Plan (as amended and restated Incorporated by Reference, Exhibit
effective October 16, 2000)* 10.1[12]

10.9 Amendment to 1994 Stock Option Plan effective July Incorporated by Reference, Exhibit
18, 2002* 10(b)[7]

10.10 Form of Incentive Stock Option Agreement* Incorporated by Reference, Exhibit
10.15[11]

10.11 Severance Plan adopted as of August 10, 1995 (as Incorporated by Reference, Exhibit 10[13]
restated February 5, 2002)*

10.12 Notice Of Award--stock award to executive officer* Incorporated by Reference, Exhibit
10(s)[14]

10.13 1999 Stock Option Plan (as amended and restated Incorporated by Reference, Exhibit
effective October 16, 2000)* 10.2[12]

10.14 Form of Incentive Stock Option Agreement* Incorporated by Reference, Exhibit
10.3[12]

10.15 Employment Agreement with Executive Officer* Incorporated by Reference, Exhibit
10(aa)[2]

10.16 Employment Agreement with Executive Officer*[15] Incorporated by Reference, Exhibit
10(bb)[2]

14

10.17 Amendment to Employment Agreement with Executive Incorporated by Reference, Exhibit
Officer*[16] 10.18[10]

10.18 Executive Stock Purchase Plan* Incorporated by Reference, Exhibit
10.24[11]

10.19 Notice of Award - stock award to executive officer* Incorporated by Reference, Exhibit
10.25[11]

10.20 Compensation Plan For Non-Employee Directors* Incorporated by Reference, Exhibit
10.22[10]

10.21 2001 Stock Incentive Plan* Incorporated by Reference, Exhibit B[17]

10.22 Notice of Award - stock award to Dennis J. Moore Incorporated by Reference, Exhibit
dated July 18, 2002* 10(d)[7]

10.23 Non-qualified Stock Option Agreement dated July Incorporated by Reference, Exhibit
18, 2002 between Registrant and Dennis J. Moore* 10(c)[7]

10.24 Form of Incentive Stock Option Agreement*

10.25 Form of Non-qualified Stock Option Agreement*

10.26 Form of Notice of Award - Performance -
Accelerated Restricted Stock *

10.27 Management Transition Agreement dated August 5, Incorporated by Reference, Exhibit
2002 between Registrant and Dennis J. Moore* 10(a)[7]

10.28 Form of Supplemental Executive Retirement Plan
Agreement *

13 The following-listed sections of the Annual Report
to Stockholders for the year ended September 30,
2002:
Five-Year Financial Summary (p. 51)
Management's Discussion and Analysis
(pgs. 10-24)
Consolidated Financial Statements
(pgs.25-48 ) and Independent Auditors' Report (p. 50)
Shareholders' Summary--Capital Stock
Information (p. 53)
Common Stock Market Price (p. 51)

21 Subsidiaries of ESCO

23 Independent Auditors' Consent

15

- ----------

[1] Incorporated by reference to Current Report on Form 8-K--date of
earliest event reported: September 30, 1999, at the Exhibit indicated.

[2] Incorporated by reference to Form 10-K for the fiscal year ended
September 30, 1999, at the Exhibit indicated.

[3] Incorporated by reference to Form 10-Q for the fiscal quarter ended
March 31, 2000, at the Exhibit indicated.

[4] Incorporated by reference to Form 10-Q for the fiscal quarter ended
June 30, 2000, at the Exhibit indicated.

[5] Incorporated by reference to Current Report on Form 8-K dated
February 3, 2000, at the Exhibit indicated.

[6] Incorporated by reference to Form 10-Q for the fiscal quarter ended
March 31, 2001, at the Exhibit indicated.

[7] Incorporated by reference to Form 10-Q for the fiscal quarter ended
June 30, 2002, at the Exhibit indicated.

[8] Incorporated by reference to Form l0-K for the fiscal year ended
September 30, l991, at the Exhibit indicated.

[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 Form 10-K for the fiscal year ended
September 30, 2001, at the Exhibit indicated.

[11] Incorporated by reference to Form 10-K for the fiscal year ended
September 30, 2000, at the Exhibit indicated.

[12] Incorporated by reference to Form 10-Q for the fiscal quarter ended
December 31, 2000, at the Exhibit indicated.

[13] Incorporated by reference to Form 10-Q for the fiscal quarter ended
March 31, 2002, at the Exhibit indicated.

[14] Incorporated by reference to Form 10-K for the fiscal year ended
September 30, 1997, at the Exhibit indicated.

[15] Identical Employment Agreements between ESCO and executive officers
Alyson S. Barclay and Victor L. Richey, Jr., except that in the case of
Ms. Barclay the minimum annual salary is $94,000.

[16] Identical Amendments to Employment Agreements between ESCO and
executive officers Alyson S. Barclay and Victor L. Richey, Jr.

[17] Incorporated by reference to Notice of Annual Meeting of the
Stockholders and Proxy Statement dated December 11, 2000, at the Exhibit
indicated.

* Represents a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form 10-K pursuant to Item
15(c) of this Part IV.

(b) Reports on Form 8-K: The Company filed a Current Report on Form 8-K
dated August 7, 2002 which in "Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits" and "Item 9.

16

Regulation FD Disclosure" listed as exhibits the certifications of the Company's
Chief Executive Officer and Chief Financial Officer relating to Form 10-Q for
the period ended June 30, 2002.

(c) Exhibits: Reference is made to the list of exhibits in this Part IV,
Item 15(a)3 above.

(d) Financial Statement Schedules: Reference is made to Part IV, Item
15(a)2 above.

17

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 TECHNOLOGIES INC.

By /s/ V.L. Richey, Jr.
-----------------------------
V.L. Richey, Jr.
Chief Executive Officer

Dated: December 16, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below effective December 16, 2002, by the following
persons on behalf of the registrant and in the capacities indicated.

18

CERTIFICATIONS

I, V.L. Richey, Jr., certify that:

1. I have reviewed this annual report on Form 10-K of ESCO Technologies
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report.

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and

c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit and finance committee of the registrant's board of directors (or
persons performing the equivalent functions):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: December 16, 2002

/s/ V.L. Richey, Jr.
-------------------------
V.L. Richey, Jr.
Chief Executive Officer

19

CERTIFICATIONS

I, G.E. Muenster, certify that:

1. I have reviewed this annual report on Form 10-K of ESCO Technologies
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report.

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
have:

a) Designed such disclosure controls and procedures to ensure
that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the
period in which this annual report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this annual report (the "Evaluation Date");
and

c) Presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit and finance committee of the registrant's board of directors (or
persons performing the equivalent functions):

a) All significant deficiencies in the design or operation of
internal controls which could adversely affect the
registrant's ability to record, process, summarize and report
financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

Date: December 16, 2002

/s/ G.E. Muenster
------------------------------------------
G.E. Muenster
Vice President and Chief Financial Officer

20

ESCO TECHNOLOGIES INC.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED SEPTEMBER 30, 2002, 2001 AND 2000

21

INDEX TO EXHIBITS

Exhibits are listed by numbers corresponding to the Exhibit Table of Item 601 in
Regulation S-K.

See Item 15(a)3 for a list of exhibits incorporated by reference

22