ESCO Technologies Inc.

Good day, and thank you for standing by. Welcome to the third quarter 2026 ESCO Technologies earnings 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 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 Bryan Sayler, President and CEO, Chris Tucker, Senior Vice President and CFO. And now I'd like to turn the conference over to our first speaker today, Kate Lowrey, 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 law. 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. 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 the call, the company may discuss some non-GAAP financial measures inscribing the company's operating results. Reconciliation of these measures for the most comparable GAAP measures can be found on 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 Bryan.

Thanks Kate, and thanks everyone for joining today's call. We're pleased to meet with you this afternoon to discuss ESCO's third quarter results. In Q3, we continue to see positive momentum in each of our business segments as demand across our served end markets continues to build. Aerospace, utility, and test orders were all strong, driving a consolidated book-to-bill of 1.21. This continuing strength lifted backlog to record levels across A&D, test, double, and at the consolidated level. This is all clear evidence of growing end market demand and the strength of our competitive position. Operationally, Q3 was another strong quarter of revenue and earnings performance. Continued order strength is flowing through to drive high single-digit organic revenue growth and operating leverage. Over the past year or so, we have been working on development and implementation of an enterprise-wide continuous improvement process which we will call the ESCO operating system. Although we are still in the early stages of the operating system implementation, We are already beginning to see impacts across our businesses through greater consistency and execution and are building a stronger foundation for sustainable value creation over time. Chris will run you through all of the financial details for the third quarter, but before that, I wanted to give you a few comments on each segment, starting with aerospace and defense. I recently had the opportunity to attend the Farnborough Air Show. It was really a great event, and it made clear that investments will continue to be made by our customers to support a continued, robust demand outlook. On the commercial side, the industry continues to be supported by a global aircraft backlog of approximately 18,000 aircraft, with an estimated unmet demand of an additional 5,000 aircraft. This demand backdrop underpins a long-duration production ramp and creates a compelling growth runway for OEMs, suppliers, and subcontractors across the aerospace value chain. At the same time, the show made clear that defense, security, and strategic resilience are becoming increasingly central to the industry in areas. Defense companies represented roughly half of the record exhibitor base at Farnborough. reflecting elevated military spending and a more complex geopolitical backdrop. Taken together, Farnborough reinforced the aerospace growth trajectory, supporting a durable multi-year production cycle. Strong commercial OEM and services outlooks remain intact while defense demand appears positioned to accelerate as governments prioritize readiness, modernization, and resilient supply chains. On the Navy side, we continue to see evidence of a strong commitment to submarine programs. Last week, the Navy awarded the largest shipbuilding contract in history to the prime contractors for the remaining nine Block VI Virginia-class and the next five Columbia-class submarines. ESCO is already under contract with the primes for this content, and the Navy's actions last week increase our confidence in the long-term outlook for submarine programs. Turning to the Utility Solutions Group, Doble's continued order strength has translated into double-digit revenue growth year-to-date, as rising power demand, electrification, and grid modernization are all increasing the need for reliable, well-maintained electrical infrastructure. As utilities expand their generation, transmission, and distribution capacity to support data centers, EVs, industrial electrification, heat pumps, and other sources of load growth, they must invest in tools that help maintain aging assets, diagnose and prevent failures, reduce downtime, and ensure grid reliability, safety, and compliance. In addition, as they progress on the longer-term infrastructure build-out, They need support in commissioning new assets and maintaining a larger, more complex grid. These are durable demand drivers for utility test instrumentation providers like Doble and Megger. Related to the Megger acquisition, we continue to work through the regulatory filing process in the required countries. This is all going smoothly and the timing is tracking to our expectations. We continue to believe that this process should be completed in a timeframe that results in closing the deal in the first quarter of our fiscal 2027. Teams from both ESCO and Beggar are actively collaborating on important integration planning activities. We believe this advanced work will help establish a clear path for efficient, well-coordinated integration of Doval and Beggar, while keeping us focused on achieving the anticipated synergies. Bringing Megger into the ESCO portfolio will build greater scale in utility solutions and reinforce our role as a trusted partner to utility customers around the world. The acquisition is an important milestone in the continued advancement of our portfolio, and we remain optimistic about the long-term prospects for the utility markets that we serve. Finally, I'll touch on the test business which had another strong orders quarter with 42% growth over the prior year. TESS order strength in Q3 was driven by industrial shielding projects and electromagnetic interference filters. On industrial shielding, those orders primarily relate to secure shielded rooms in both the US and Europe. The EMI filters are for use in commercial and government data centers. The continued demand strength at TESS is encouraging and the team there is doing a really nice job of improving execution and expanding margins as their end market momentum continues. With that, I'll turn it over to Chris to run you through the financial details of the quarter.