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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______ TO ______

COMMISSION FILE NUMBER 1-10596

ESCO TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

MISSOURI

43-1554045

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

9900A CLAYTON ROAD

ST. LOUIS, MISSOURI

63124-1186

(Address of principal executive offices)

(Zip Code)

(314) 213-7200

(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

Title of each class

    

Trading Symbol(s)

    

Name of each exchange on which registered

Common Stock, par value $0.01 per share

ESE

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class

    

Shares outstanding at April 30, 2022

Common stock, $.01 par value per share

 

25,850,916

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

Three Months Ended

March 31, 

    

2022

    

2021

Net sales

    

$

204,928

    

165,894

Costs and expenses:

 

 

Cost of sales

 

128,375

 

103,553

Selling, general and administrative expenses

 

47,959

 

38,746

Amortization of intangible assets

 

6,510

 

4,917

Interest expense, net

 

1,020

 

432

Other income, net

 

(604)

 

(1,903)

Total costs and expenses

 

183,260

 

145,745

Earnings before income taxes

 

21,668

 

20,149

Income tax expense

 

5,085

 

4,745

Net earnings

$

16,583

 

15,404

 

 

Earnings per share:

 

 

Basic -

Net earnings

0.64

0.59

Diluted -

 

Net earnings

$

0.64

 

0.59

See accompanying notes to consolidated financial statements.

2

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)

Six Months Ended

March 31,

    

2022

    

2021

Net sales

$

381,938

 

328,568

Costs and expenses:

 

 

 

Cost of sales

 

236,680

 

 

203,175

Selling, general and administrative expenses

 

94,594

 

 

79,746

Amortization of intangible assets

 

12,977

 

 

9,865

Interest expense, net

 

1,753

 

 

973

Other income, net

 

(571)

 

 

(1,880)

Total costs and expenses

 

345,433

 

 

291,879

 

 

 

Earnings before income taxes

 

36,505

 

 

36,689

Income tax expense

 

8,398

 

 

8,467

Net earnings

$

28,107

 

28,222

 

 

Earnings per share:

 

 

Basic — Net earnings

$

1.08

1.08

Diluted — Net earnings

$

1.08

1.08

See accompanying notes to consolidated financial statements.

3

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(Dollars in thousands)

Three Months Ended

 

Six Months Ended

March 31, 

March 31,

    

2022

    

2021

    

2022

    

2021

Net earnings

$

16,583

 

15,404

28,107

28,222

Other comprehensive income (loss), net of tax:

 

 

Foreign currency translation adjustments

 

(2,811)

 

116

(5,311)

5,465

Total other comprehensive income (loss), net of tax

 

(2,811)

 

116

(5,311)

5,465

Comprehensive income

$

13,772

 

15,520

22,796

33,687

See accompanying notes to consolidated financial statements.

4

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands)

March 31, 

September 30, 

    

2022

    

2021

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

54,324

 

56,232

Accounts receivable, net of allowance for doubtful accounts of $3,403 and $3,445, respectively

 

140,497

 

146,341

Contract assets

 

111,453

 

93,771

Inventories, net

 

175,152

 

147,148

Other current assets

 

31,972

 

22,662

Total current assets

 

513,398

 

466,154

Property, plant and equipment, net of accumulated depreciation of $156,237 and $147,551, respectively

 

156,963

 

154,265

Intangible assets, net of accumulated amortization of $162,869 and $149,892, respectively

 

407,203

 

409,250

Goodwill

 

508,406

 

504,853

Operating lease assets

30,139

31,846

Other assets

 

9,677

 

10,977

Total assets

$

1,625,786

1,577,345

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

Current liabilities:

 

 

Current maturities of long-term debt and short-term borrowings

$

20,000

20,000

Accounts payable

 

71,811

56,669

Contract liabilities

 

108,629

106,045

Accrued salaries

 

30,150

39,768

Accrued other expenses

 

47,205

52,513

Total current liabilities

 

277,795

274,995

Deferred tax liabilities

 

82,187

73,560

Non-current operating lease liabilities

26,302

28,032

Other liabilities

 

42,329

47,062

Long-term debt

 

176,000

134,000

Total liabilities

 

604,613

557,649

Shareholders’ equity:

 

 

Preferred stock, par value $.01 per share, authorized 10,000,000 shares

 

 

Common stock, par value $.01 per share, authorized 50,000,000 shares, issued 30,705,913 and 30,666,173 shares, respectively

 

307

307

Additional paid-in capital

 

298,353

297,644

Retained earnings

 

854,946

830,989

Accumulated other comprehensive loss, net of tax

 

(7,472)

(2,161)

 

1,146,134

1,126,779

Less treasury stock, at cost: 4,826,545 and 4,604,741 common shares, respectively

 

(124,961)

(107,083)

Total shareholders’ equity

 

1,021,173

1,019,696

Total liabilities and shareholders’ equity

$

1,625,786

1,577,345

See accompanying notes to consolidated financial statements.

5

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

Six Months Ended

March 31, 

    

2022

    

2021

    

Cash flows from operating activities:

 

  

 

  

 

Net earnings

$

28,107

 

28,222

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

Depreciation and amortization

 

24,292

 

20,115

Stock compensation expense

 

3,428

 

2,745

Changes in assets and liabilities

 

(41,451)

 

9,179

Gain on sale of building and land

(1,950)

Effect of deferred taxes

8,627

(989)

Net cash provided by operating activities

 

23,003

 

57,322

Cash flows from investing activities:

 

 

Acquisition of business, net of cash acquired

 

(15,592)

 

(6,684)

Proceeds from sale of building and land

1,950

Additions to capitalized software

 

(4,727)

 

(3,973)

Capital expenditures

(20,715)

(13,153)

Net cash used by investing activities

 

(41,034)

 

(21,860)

Cash flows from financing activities:

 

 

Proceeds from long-term debt and short-term borrowings

 

88,000

 

34,000

Principal payments on long-term debt and short-term borrowings

 

(46,000)

 

(74,368)

Purchases of common stock into treasury

 

(17,878)

 

Dividends paid

 

(4,150)

 

(4,167)

Other

 

(2,719)

 

Net cash provided (used) by financing activities

17,253

(44,535)

Effect of exchange rate changes on cash and cash equivalents

(1,130)

2,166

Net decrease in cash and cash equivalents

(1,908)

(6,907)

Cash and cash equivalents, beginning of period

56,232

52,560

Cash and cash equivalents, end of period

$

54,324

45,653

 

 

Supplemental cash flow information:

 

 

Interest paid

$

1,002

 

281

Income taxes paid (including state and foreign)

 

1,558

 

14,047

See accompanying notes to consolidated financial statements.

6

ESCO TECHNOLOGIES INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.    BASIS OF PRESENTATION

The accompanying consolidated financial statements, in the opinion of management, include all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim periods presented. The consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures required for annual financial statements by accounting principles generally accepted in the United States of America (GAAP).

The Company’s results for the three-month period ended March 31, 2022 are not necessarily indicative of the results for the entire 2022 fiscal year. References to the second quarters of 2022 and 2021 represent the fiscal quarters ended March 31, 2022 and 2021, respectively. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Actual results could differ from those estimates. Certain prior period deferred revenue amounts have been reclassified to noncurrent to conform with the current year presentation.

2.    EARNINGS PER SHARE (EPS)

Basic EPS is calculated using the weighted average number of common shares outstanding during the period. Diluted EPS is calculated using the weighted average number of common shares outstanding during the period plus shares issuable upon the assumed exercise of dilutive common share options and vesting of performance-accelerated restricted shares (restricted shares) by using the treasury stock method. The number of shares used in the calculation of earnings per share for each period presented is as follows (in thousands):

    

Three Months

 

Six Months

Ended March 31, 

Ended March 31,

    

2022

    

2021

    

2022

    

2021

Weighted Average Shares Outstanding Basic

 

25,953

 

26,038

26,008

26,038

Dilutive Restricted Shares

92

163

90

154

Adjusted Shares Diluted

 

26,045

 

26,201

26,098

26,192

3.    ACQUISITION

On November 4, 2021, the Company acquired Networks Electronic Company, LLC (NEco) for a purchase price of approximately $15.2 million, net of cash acquired. NEco, based in Chatsworth, California, provides miniature electro-explosive devices utilized in mission-critical defense and aerospace applications. Since the date of acquisition, the operating results for the NEco business have been included as part of PTI in the A&D segment. The acquisition date fair value of the assets acquired and liabilities assumed primarily were as follows: approximately $0.6 million of accounts receivable, $1.5 million of inventory, $0.2 million of property, plant and equipment, $0.7 million of accounts payable and accrued expenses, $8.1 million of identifiable intangible assets, mainly consisting of customer relationships totaling $6.3 million. The acquired goodwill of $5.7 million related to excess value associated with opportunities to expand the services and products that the Company can offer to its customers. The Company anticipates that the goodwill will be deductible for tax purposes.

4.    SHARE-BASED COMPENSATION

The Company provides compensation benefits to certain key employees under several share-based plans providing for performance-accelerated and/or time-vested restricted stock unit awards, and to non-employee directors under a non-employee directors compensation plan.

Performance-Accelerated Restricted Stock Unit (PARS) Awards and Time-Vested Restricted Stock Unit (RSU) Awards

Compensation expense related to the PARS/RSU awards was $1.5 million and $2.8 million for the three and six-month periods ended March 31, 2022, respectively, and $1.1 million and $2.1 million for the corresponding periods in 2021. As of March 31, 2022, there were 210,119 unvested stock units outstanding.

7

Non-Employee Directors Plan

Compensation expense related to the non-employee director grants was $0.3 million and $0.6 million for the three and six-month periods ended March 31, 2022, respectively, and $0.3 million and $0.6 million for the corresponding periods in 2021.

The total share-based compensation cost that has been recognized in the results of operations and included within selling, general and administrative expenses (SG&A) was $1.7 million and $3.4 million for the three and six-month periods ended March 31, 2022, respectively, and $1.4 million and $2.7 million for the corresponding periods in 2021. The total income tax benefit recognized in results of operations for share-based compensation arrangements was $0.3 million and $0.5 million for the three and six-month periods ended March 31, 2022, respectively, and $0.3 million and $0.7 million for the corresponding periods in 2021. As of March 31, 2022, there was $10.9 million of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a remaining weighted-average period of 1.9 years.

5.    INVENTORIES

Inventories, net, consist of the following:

    

March 31, 

    

September 30, 

(In thousands)

    

2022

    

2021

Finished goods

$

37,434

 

32,998

Work in process

 

46,447

 

34,201

Raw materials

 

91,271

 

79,949

Total inventories, net

$

175,152

 

147,148

6.

GOODWILL AND OTHER INTANGIBLE ASSETS

Included on the Company’s Consolidated Balance Sheets at March 31, 2022 and September 30, 2021 are the following intangible assets gross carrying amounts and accumulated amortization:

    

March 31, 

    

September 30, 

(Dollars in thousands)

    

2022

    

2021

Goodwill

$

508,406

    

504,853

 

Intangible assets with determinable lives:

 

Patents

 

Gross carrying amount

$

2,208

2,131

Less: accumulated amortization

 

1,029

972

Net

$

1,178

1,159

 

Capitalized software

 

Gross carrying amount

$

98,398

93,671

Less: accumulated amortization

 

67,013

63,740

Net

$

31,385

29,931

 

Customer relationships

 

Gross carrying amount

$

292,887

288,530

Less: accumulated amortization

 

88,933

80,882

Net

$

203,954

207,648

 

Other

 

Gross carrying amount

$

14,567

13,080

Less: accumulated amortization

 

5,897

4,301

Net

$

8,670

8,779

Intangible assets with indefinite lives:

 

Trade names

$

162,016

161,733

8

The changes in the carrying amount of goodwill attributable to each business segment for the six months ended March 31, 2022 is as follows:

Aerospace

(Dollars in millions)

    

USG

Test

    

& Defense

    

Total

Balance as of September 30, 2021

366.5

 

34.1

 

104.3

 

504.9

Acquisition activity and adjustments

0.3

5.7

6.0

Foreign currency translation

(2.5)

(2.5)

Balance as of March 31, 2022

$

364.3

34.1

110.0

508.4

7.    BUSINESS SEGMENT INFORMATION

The Company is organized based on the products and services that it offers and classifies its continuing business operations in three reportable segments for financial reporting purposes: Aerospace & Defense, Utility Solutions Group (USG), and RF Shielding and Test (Test).

The Aerospace & Defense segment’s operations consist of PTI Technologies Inc. (PTI), VACCO Industries (VACCO), Crissair, Inc. (Crissair), Westland Technologies Inc. (Westland), Mayday Manufacturing Co. (Mayday) and Globe Composite Solutions, LLC (Globe). The companies within this segment primarily design and manufacture specialty filtration, fluid control and naval products, including hydraulic filter elements and fluid control devices used in aerospace and defense applications; unique filter mechanisms used in micro-propulsion devices for satellites, custom designed filters for manned aircraft and submarines; products and systems to reduce vibration and/or acoustic signatures and otherwise reduce or obscure a vessel’s signature, and other communications, sealing, surface control and hydrodynamic related applications to enhance U.S. Navy maritime survivability; precision-tolerance machined components for the aerospace and defense industry; and metal processing services.

The USG segment’s operations consist primarily of Doble Engineering Company and related subsidiaries including Morgan Schaffer and Altanova (collectively, Doble), and NRG Systems, Inc. (NRG). Doble is an industry leader in the development, manufacture and delivery of diagnostic testing solutions that enable electric power grid operators to assess the integrity of high voltage power delivery equipment. It combines three core elements for customers – diagnostic test and condition monitoring instruments, expert consulting, and testing services – and provides access to its large reserve of related empirical knowledge. NRG is a global market leader in the design and manufacture of decision support tools for the renewable energy industry, primarily wind and solar.

The Test segment’s operations consist primarily of ETS-Lindgren Inc. and related subsidiaries (ETS-Lindgren). ETS-Lindgren is an industry leader in designing and manufacturing products which provide its customers with the ability to identify, measure and contain magnetic, electromagnetic and acoustic energy. ETS-Lindgren also manufactures radio frequency shielding products and components used by manufacturers of medical equipment, communications systems, electronic products, and shielded rooms for high-security data processing and secure communication.

9

Management evaluates and measures the performance of its reportable segments based on “Net Sales” and “EBIT”, which are detailed in the table below. EBIT is defined as earnings before interest and taxes.

Three Months

Six Months

Ended March 31, 

Ended March 31, 

(In thousands)

    

2022

    

2021

    

2022

    

2021

NET SALES

  

  

  

  

Aerospace & Defense

$

84,821

82,528

155,065

149,144

USG

64,191

39,555

127,676

94,095

Test

55,916

43,811

99,197

85,329

Consolidated totals

$

204,928

165,894

381,938

328,568

EBIT

Aerospace & Defense

$

14,349

17,006

24,304

25,266

USG

11,314

6,725

24,705

19,456

Test

8,494

5,688

12,459

11,030

Corporate (loss)

(11,469)

(8,838)

(23,210)

(18,090)

Consolidated EBIT

22,688

20,581

38,258

37,662

Less: Interest expense

(1,020)

(432)

(1,753)

(973)

Earnings before income taxes

$

21,668

20,149

36,505

36,689

Non-GAAP Financial Measures

The financial measure “EBIT” is presented in the above table and elsewhere in this Report. EBIT on a consolidated basis is a non-GAAP financial measure. Management believes that EBIT is useful in assessing the operational profitability of the Company’s business segments because it excludes interest and taxes, which are generally accounted for across the entire Company on a consolidated basis. EBIT is also one of the measures used by management in determining resource allocations within the Company as well as incentive compensation. A reconciliation of EBIT to net earnings is set forth in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations – EBIT.

The Company believes that the presentation of EBIT provides important supplemental information to investors to facilitate comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. However, the Company’s non-GAAP financial measures may not be comparable to other companies’ non-GAAP financial performance measures. Furthermore, the use of non-GAAP financial measures is not intended to replace any measures of performance determined in accordance with GAAP.

8.    DEBT

The Company’s debt is summarized as follows:

    

March 31, 

September 30, 

(In thousands)

    

2022

    

2021

Total borrowings

$

196,000

 

154,000

Current portion of long-term debt

 

(20,000)

 

(20,000)

Total long-term debt, less current portion

$

176,000

 

134,000

The Credit Facility includes a $500 million revolving line of credit as well as provisions allowing for the increase of the credit facility commitment amount by an additional $250 million, if necessary, with the consent of the lenders. The bank syndication supporting the facility is comprised of a diverse group of eight banks led by JP Morgan Chase Bank, N.A., as Administrative Agent. The Credit Facility matures September 27, 2024.

At March 31, 2022, the Company had approximately $296 million available to borrow under the Credit Facility, plus the $250 million increase option, subject to lender approval, in addition to $54.3 million cash on hand. The Company classified $20 million as the current portion of long-term debt as of March 31, 2022, as the Company intends to repay this amount within the next twelve months; however, the Company has no contractual obligation to repay such amount during the next twelve months. The letters of credit issued and outstanding under the Credit Facility totaled $8.1 million at March 31, 2022.

10

Interest on borrowings under the Credit Facility is calculated at a spread over either the New York Federal Reserve Bank Rate, the prime rate or the London Interbank Offered Rate (LIBOR), depending on various factors. The Credit Facility also requires a facility fee ranging from 10 to 25 basis points per annum on the unused portion. The Credit Facility is secured by the unlimited guaranty of the Company’s direct and indirect material U.S. subsidiaries and the pledge of 100% of the equity interests of its direct and indirect material foreign subsidiaries. The financial covenants of the Credit Facility include a leverage ratio and an interest coverage ratio. The weighted average interest rates were 1.29% and 1.23% for the three and six-month periods ending March 31, 2022, respectively, and 1.27% and 1.40% for the three and six-month periods ending March 31, 2021. As of March 31, 2022, the Company was in compliance with all covenants.

9.    INCOME TAX EXPENSE

The second quarter 2022 effective income tax rate was 23.5% compared to 23.5% in the second quarter of 2021. The effective income tax rate in the first six months of 2022 was 23.0% compared to 23.1% for the first six months of 2021. There were no significant or unusual items impacting the 2022 second quarter or year-to-date effective tax rate.

10.  SHAREHOLDERS’ EQUITY

The change in shareholders’ equity for the first three and six months of 2022 and 2021 is shown below (in thousands):

Three Months Ended March 31, 

Six Months Ended March 31, 

    

2022

    

2021

    

2022

    

2021

Common stock

Beginning balance

307

306

307

306

Stock plans

Ending balance

307

306

307

306

Additional paid-in-capital

Beginning balance

296,277

294,735

297,644

293,682

Stock plans

2,076

1,061

709

2,114

Ending balance

298,353

295,796

298,353

295,796

Retained earnings

Beginning balance

840,434

786,563

830,989

775,829

Net earnings common stockholders

16,583

15,404

28,107

28,222

Dividends paid

(2,071)

(2,083)

(4,150)

(4,167)

Ending balance

854,946

799,884

854,946

799,884

Accumulated other comprehensive income (loss)

Beginning balance

(4,661)

1,692

(2,161)

(3,657)

Foreign currency translation

(2,811)

116

(5,311)

5,465

Ending balance

(7,472)

1,808

(7,472)

1,808

Treasury stock

Beginning balance

(117,080)

(107,134)

(107,083)

(107,134)

Issued under stock plans

(7,881)

(17,878)

Ending balance

(124,961)

(107,134)

(124,961)

(107,134)

Total equity

1,021,173

990,660

1,021,173

990,660

11

11.  FAIR VALUE MEASUREMENTS

The accounting guidance establishes a three-level hierarchy for disclosure of fair value measurements, based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date, as follows:

Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Financial Assets and Liabilities

The Company has estimated the fair value of its financial instruments as of March 31, 2022 and September 30, 2021 using available market information or other appropriate valuation methodologies. The carrying amounts of cash and cash equivalents, receivables, inventories, payables, and other current assets and liabilities approximate fair value because of the short maturity of those instruments.

Fair Value of Financial Instruments

The Company’s forward contracts and interest rate swaps are classified within Level 2 of the valuation hierarchy in accordance with FASB Accounting Standards Codification (ASC) 825, and are immaterial.

Nonfinancial Assets and Liabilities

The Company’s nonfinancial assets such as property, plant and equipment, and other intangible assets are not measured at fair value on a recurring basis; however they are subject to fair value adjustments in certain circumstances, such as when there is evidence that an impairment may exist. No impairments were recorded during the three and six-month periods ended March 31, 2022.

12.  REVENUES

Disaggregation of Revenues

Revenues by customer type, geographic location, and revenue recognition method for the three and six-month periods ended March 31, 2022 are presented in the tables below as the Company deems it best depicts how the nature, amount, timing and uncertainty of net sales and cash flows are affected by economic factors. The tables below also include a reconciliation of the disaggregated revenue within each reportable segment.

12

Three months ended March 31, 2022

Aerospace

(In thousands)

& Defense

USG

Test

Total

    

Customer type:

 

  

 

  

 

  

 

  

 

Commercial

$

33,562

$

63,379

$

51,903

$

148,844

U.S. Government

 

51,259

812

4,013

 

56,084

Total revenues

$

84,821

$

64,191

$

55,916

$

204,928

 

 

Geographic location:

 

 

United States

$

72,621

$

41,458

$

31,071

$

145,150

International

 

12,200

22,733

24,845

 

59,778

Total revenues

$

84,821

$

64,191

$

55,916

$

204,928

 

 

Revenue recognition method:

 

 

Point in time

$

35,666

$

51,202

$

14,838

$

101,706

Over time

 

49,155

12,989

41,078

 

103,222

Total revenues

$

84,821

$

64,191

$

55,916

$

204,928

Six months ended March 31, 2022

Aerospace

(In thousands)

    

& Defense

    

USG

    

Test

    

Total

Customer type:

 

  

 

  

 

  

 

  

Commercial

$

61,489

$

126,221

$

92,941

$

280,651

U.S. Government

 

93,576

 

1,455

 

6,256

 

101,287

Total revenues

$

155,065

$

127,676

$

99,197

$

381,938

Geographic location:

 

 

 

 

United States

$

133,313

$

80,199

$

54,047

$

267,559

International

 

21,752

 

47,477

 

45,150

 

114,379

Total revenues

$

155,065

$

127,676

$

99,197

$

381,938

Revenue recognition method:

 

 

 

 

Point in time

$

64,223

$

102,037

$

27,660

$

193,920

Over time

 

90,842

 

25,639

 

71,537

 

188,018

Total revenues

$

155,065

$

127,676

$

99,197

$

381,938

Revenues by customer type, geographic location, and revenue recognition method for the three and six-month periods ended March 31, 2021 are presented in the tables below.

Three months ended March 31, 2021

Aerospace

 

(In thousands)

    

& Defense

    

USG

    

Test

    

Total

Customer type:

 

  

 

  

 

  

 

  

Commercial

 

$

33,223

 

$

38,549

 

$

39,305

 

$

111,077

U.S. Government

49,305

1,006

4,506

54,817

Total revenues

 

$

82,528

 

$

39,555

 

$

43,811

 

$

165,894

Geographic location:

United States

 

$

72,287

 

$

27,445

 

$

22,965

 

$

122,697

International

10,241

12,110

20,846

43,197

Total revenues

 

$

82,528

 

$

39,555

 

$

43,811

 

$

165,894

Revenue recognition method:

Point in time

 

$

37,127

 

$

27,563

 

$

9,248

 

$

73,938

Over time

45,401

11,992

34,563

91,956

Total revenues

 

$

82,528

 

$

39,555

 

$

43,811

 

$

165,894

13

Six months ended March 31, 2021

Aerospace

 

(In thousands)

    

& Defense

    

USG

    

Test

    

Total

Customer type:

Commercial

 

$

61,089

 

$

92,414

 

$

76,027

 

$

229,530

U.S. Government

88,055

1,681

9,302

99,038

Total revenues

 

$

149,144

 

$

94,095

 

$

85,329

 

$

328,568