ESCO Technologies Inc.

Welcome to the second quarter 2024 ESCO technology zoning call. At this time all participants are in the listen only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. On the call today, we have Brian Saylor, President and CEO, Chris Tucker, Senior Vice President and CFO, and now I would like to hand the conference over to our first speaker today, Kate 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 of the safe harbor provisions of the federal securities laws. These statements are based on current expectations and assumptions, and actual results may differ materially from those projected in the forward-looking statements. Due to risks and uncertainties that exist in the company's operations and business environment, including but not limited to the risk factors referenced in the company's press release issued today, which will be included as an exhibit to the company's Form 8K to be filed. You 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.escotechnologies.com under the link Investor Relations. Now I'll turn the call over to Brian.

Thanks, Kate, and thanks, everyone, for joining today's call. We appreciate you taking time to get an update from ESCO this afternoon. We are pleased with the second quarter results and are especially excited about the continued top-line momentum across our business platforms. Sales were up by 9% over the prior year second quarter as our aerospace, Navy, and utility businesses continue to see robust end market dynamics. It's been busy over the last month as we've worked through our annual strategic planning process with each of our subsidiaries. This is a chance for us to step back and examine what's happening in our end markets and to work on strategies to deliver above market organic growth. This year's sessions have been particularly energizing as we've seen several long-term trends across the broader economy that support good growth profile as we move EPSCO forward. Chris will run you through all of the financial details on the second quarter, but before that I want to pass along a few highlights from the strategy reviews and give you some sense for some of the longer term dynamics that we are seeing. Starting with aerospace and defense, we continue to feel very good about the outlook here. As you saw in the release, we still have high levels of backlog and the top line sales growth has been strong. The most exciting thing here is what remains in front of us. Our key markets are commercial and defense aerospace, Navy, and space. And while each of these have different drivers, fundamentally they all provide a great foundation for future growth. Commercial and defense aerospace customers are working to execute on long-term build plans to increase build rates, which underpin a strong forecast for ESCO. The Navy remains committed to ramping up submarine production in a manner that will drive significant growth for us. We are also involved in some early-stage developmental projects with positive long-term outlooks. We are driving for high single-digit organic growth from these businesses through the planning cycle. Next is the utility group, where the outlook remains bullish. You don't have to look very deep into the headlines to find the growth drivers here. An aging electric grid Increasing power demand from technology and industrial investments in the U.S. and decarbonization goals around the world are driving the need for even more electrification. At ESCO, we have a very well-established diagnostic instrumentation business in Doble that is positioned to capitalize on these market factors and deliver continued excellent results. Additionally, our capabilities in the renewables market have already delivered tremendous results for ESCO, and there's more to come. These businesses are highly focused on new product and technology roadmaps to continue meeting customer needs while maintaining our lead in these growing markets. Finally, I'll touch on the test business. As we discussed last quarter, and as you can see from the press release, tests got off to a tough start to the year at Q1, and although the revenue softness continued in Q2, the business was able to deliver sequential growth and return to double-digit profitability. It's never fun to go through these kinds of business cycles, but the team is really doing a great job of managing through the current challenges. We've been quick to get costs out of the business, and we are well-positioned as growth returns. We had a great strategy review with this team, and the long-term outlook is bright. This business has broad test and measurement capabilities that apply to a number of end and we certainly expect growth to return in 2025 and beyond. While our primary focus is on organic growth and driving strategies to grow our existing business faster than the markets they serve, while improving operational effectiveness and expanding returns, we are seeing increased opportunities to add to the business through strategic acquisitions, which increase our exposure to our existing long-term growth markets. Hopefully that gives you a flavor of the things that we've been working on over the past month and a sense of the excitement that we have for the future. As we pivot back to the quarter, I'll turn it over to Chris now, and he will go through the specifics for the great quarter that we just announced.