ESCO Technologies Inc.

Good day, and thank you for standing by. Welcome to the third quarter 2022 ESCO Technologies earning call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising you your hand is raised. Please be advised that today's conference is being recorded. On the call today, we have Vic Ritchie, Chairman and CEO, Chris Tucker, Senior Vice President and CFO. And I would now like to hand the conference over to your first speaker today, Kate Lowry, Vice President of Investor Relations. Kate, you now have the floor.

Thank you. Statements made during this call, which are not strictly historical, are forward-looking statements within the meaning and the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and the actual results may differ materially from those projected in the forward-looking statements. Due to risks and uncertainties that exist in the company's operations and business environment, including, but not limited to, the risk factors referenced in the company's press release issued today, which will be included as an exhibit to the company's Form 8K to be filed. We undertake no duty to update or revise any forward-looking statements, except as may be required by applicable laws or regulations. In addition, during this call, the company may discuss some non-GAAP financial measures in describing the company's operating results. A reconciliation of these measures to their most comparable GAAP measures can be found in the press release issued today and found on the company's website at www.esco-technologies.com under the link Investor Relations. Now I'll turn the call over to Vic.

Thanks, Kate, and thanks, everybody, for joining today's call. I'd like to start off with a thank you to our global teams. We continue to experience challenging operating conditions today, all of our end markets, but the teams are working tirelessly to deliver for our customers. We did see the benefits of this hard work during the quarter, with reported sales increasing by over 20%. This is the second quarter in a row of sales growth in excess of 20%. This strong top line growth translated to the bottom line, with reported earnings per share up over 50%, and adjusted earnings per share up 33%. I would say strong performance indeed. The other key highlight for the quarter was our ongoing order strength. During the third quarter, we saw orders increase by 25%, and backlog ended at $707 million. As we mentioned in the press release, this is a record level of backlog for us. It's great to be setting with record backlog. It indicates healthy end markets and gives us some visibility as we plan for next year. We also are managing high levels of past due backlog, and this is something we're very focused on bringing down. In general, we still see supply chain issues as a key driver of our past due backlog situation. It's mostly focused on our utility and aerospace businesses. The teams have this in focus, and we're proactive with our customer base to make sure they address any issues. Visibility is somewhat limited as to when this will clear up. Our main focus will remain on doing everything in our power to get customers the products they want when they want them. Crystal will get into some financial details in a few minutes, but I did want to offer some top-level commentary about each of our business segments. Starting with A&D, where we had a really nice quarter. Sales and margins both increased nicely. Orders also remained strong with 16% growth compared to last year's third quarter. As we look across this business, we continue to see good trends with commercial aerospace, Navy, and space all doing well. Just a few weeks back, we attended a Farmer Air show outside of London. It was encouraging to see the event so well attended. The show was very positive for us, and we continue to be well positioned in this market. As mentioned before, past due backlog is something we're watching closely for the A&D business. Supply chain challenges are persistent, and we had hoped that past dues would be normalized by now. But in spite of this, we're still achieving good results at A&D. Next is utility group, but we also had a strong quarter. If you exclude the acquisition impact, we had sales growth of nearly 17%, and that was after a very strong performance in Q2. So it looks like this business has finally shaken off the market softness we saw through the pandemic and is starting to ramp up. When you add in the acquisitions, the growth is up over 40%. We're excited about what the acquisitions bring to the table for ESCO. And N22 is shaping up to be a really transformable year for the Utility Solutions Group. Let's turn now to the test business. We continue to see really great sales momentum. This is the second quarter in a row with sales growth in excess of 20%. We have a global footprint and a broad product offering selling into strong markets. So it's really been a powerful combination for us. Even with the strong sales performance, we have continued to grow backlogged. Order activity remains elevated, and the team continues to win business around the world. Overall, through the first nine months, we attracted to the plan we communicated last November. The third quarter was important as we needed to see sales and earnings improvement ramp up, and we were able to get that done. We're in good position and pushing hard to close out the year successfully. As you know, we still have a lot to get done here in the fourth quarter. The teams have this in sharp focus as we come down the stretch. And looking beyond this year, it's clear we're setting up a strong foundation for 23 and beyond. So I'll turn it over to Chris.