COMPANY WATCH

March 2014 Filtration Industry Analyst9

Cummins Inc, USA

Key Figures (US$ million)Fourth quarter ended 31.12

2013 2012

Net Sales 4588 4292Of Which:Components 1135 939Distribution 1073 907

Cost of Sales 3424 3234

Gross Margin 1164 1058

Operating Income 553 465

Income before Income Taxes 547 473

Net Income 461 398

Year ended 31.12 2013 2012

Net Sales 17 301 17 334Of Which:Components 4342 4012Distribution 3749 3277

Cost of Sales 12 918 12 826

Gross Margin 4383 4508

Operating Income 2101 2254

Income before Income Taxes 2119 2271

Net Income 1588 1738

COMMENTCummins has posted fourth quarter fiscal 2013 sales of US$4.6 billion, up 6.9% on the year earlier. Net income was 15.8% stronger at US$461 million.

The upturn during the quarter reversed the downward trend of the full year that saw net sales essentially even with the 2012 figure at US$17.3 billion and net income fall 8.6% to US$1.6 billion.

“We faced weak demand in important regions and end markets in 2013,” Tom Linebarger, Cummins chair and CEO, said. “Revenues for the year ended flat with 2012 as

strong growth in the Components business, market share gains in the North American medium-duty truck market and distributor acquisitions offset weakness in global mining markets, international power generation and the North American heavy-duty truck market. I am pleased that in this environment of weak global growth, we were able to generate record cash flow from operations that allowed us to continue to invest in the business.”

Cummins is forecasting revenue growth of between 4% and 8% in fiscal 2014. ■www.cummins.com

Esco Technologies Inc, USA

Key Figures (US$ million)First quarter ended 21.12

2013 2012

Net Sales 124.5 110.5Of Which:Filtration 55.5 46.4

Cost of Sales 74.3 66.8

Total Costs and Expenses 110.7 102.5

Earnings before Income Taxes 14.4 8.6Of Which:Filtration 9.5 8.8

Net Earnings 11.2 0.2

COMMENTEsco Technologies Inc has posted first quarter sales for fiscal 2014 of US$124.5 million, an increase of 12.6% on the year earlier.

Revenues were up in all three of Esco’s reporting segments, with the Filtration division leading the way with a 19.7% increase on the fiscal 2013 figure at US$55.5 million. Sales in the Test segment rose 8.8% to US$39.5 million and 5.8% in the Utility Solutions Group (USG) to US$29.5 million.

Profitability was also up, with net earnings surging from US$0.2 million to US$11.2 million and consolidated EBIT up 67.6% to US14.4 million. Once more, the improvement was across all three segments with EBIT in the Filtration division up 7.8% at US$9.5 million, 588.8% in Test at US$3.6 million and 40.2% in USG to US$7.6 million.

Esco continued to report its Aclara subsidiary as a discontinued operation during the period, as it remains actively engaged in its divestment. Aclara recorded a 49.6% year-on-year increase in sales for the quarter to US$51.9 million.

“I’m very pleased with the way we started 2014,” Vic Richey, Esco’s chair and CEO, said.

“Our first quarter sales, EBIT, EPS, and cash flow all came in above our earlier expectations while increasing significantly from prior year.”

Within Filtration, Richey said that recent platform wins in commercial aerospace boded well for Esco’s future growth and profitability in this segment.

“The initial production on the Airbus A-350 program, the additional content we’ve won on regional and business jets, as well as our international airframe opportunities will support our longer term growth outlook,” he said. “Our entire Filtration group continues to differentiate itself with exceptional engineering design and functional advancements in product performance which is expected to significantly improve our win rate as new opportunities present themselves.”

Esco is expecting the strong growth to continue in 2014 and is forecasting revenue for the year to finish 8-10% with Filtration sales expected to increase by the same amount.

“We intend to supplement this organic growth through disciplined acquisitions around our existing core,” Richey added. ■ www.escotechnologies.com