ESCO Technologies Inc. (NYSE:ESE) Q4 2017 Earnings Conference Call Transcript
Nov 14, 2017 • 05:00 pm ET
Good day, and welcome to the ESCO Q4 2017 Earnings Conference Call. Today's call is being recorded. With us today are Vic Richey, Chairman and CEO; Gary Muenster, VP and CFO. And now to present the forward-looking statement, I would like to turn the call over to Kate Lowrey, Director of IR. Please go ahead.
(Forward-Looking Cautionary Statements)
In addition, during the 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 Vic.
Thanks, Kate, and good afternoon. As noted in the release, we're wrapping up 2017 in a strong fashion, which Gary will describe in a moment. I'm happy to report we delivered on our earlier expectations of EBITDA and EPS. Setting aside the numbers for a second, I'm most satisfied with our recent M&A activities as we've added four great companies this year, supplementing the three we acquired in 2016. With these new partners, we've not only added great companies to our portfolio, we also added strong management teams, who share our vision and our values.
As we look forward to future, we plan to build on both the organic and acquisition successes we've achieved over the past two years, and we will continue to aggressively address the normal market challenges we face every day. This gives me a favorable view of our future, and our goal remains unchanged, and that is to increased our long-term shareholder value.
Before I give my perspective on our outlook for 2018, I'll turn it over to Gary to wrap up 2017 with a few financial comments and to summarize our 2018 outlook.
Thanks, Vic. I'm pleased with the 2017 financial results and very proud of what we accomplished this year in the way of acquisitions, which better positions the Company for achieving our long-term growth objectives across the portfolio. At the start of the year, we set our financial goals centered around EBITDA, which we expected to be in the range of $122 million to $124 million and with GAAP EPS expected in the range of $2.16 to $2.26 a share, and we also described several non-cash items that would be impacting our GAAP results.
Given our additional M&A activities completed late in the fiscal year, coupled with the corresponding GAAP required non-cash purchase accounting charges from these acquisitions, our GAAP earnings became less comparable as the year progressed. As a result, adjusted EBITDA and adjusted EPS became more important operating performance measures when looking at our comparative results. This adjusted approach is consistent with our view of 2016's operating performance.
So touching on a few financial highlights from 2017. For the year, we reported $123 million of adjusted EBITDA, which is slightly better than our previous expectations of $122 million communicated in August. This