10-Q · May 12, 2026
Espey Mfg. & Electronics Corp. reported solid quarterly results, with revenue of $11.42 million, reflecting an increase from $10.30 million in the prior year. Gross margins improved substantially to 37.0%, while diluted…
Earnings analysis · 10-K
ESP earnings analysis
Filed September 23, 2026 · Our reading of the company's report
The latest report
Espey delivered a stronger fiscal 2026, with revenue up 4.95%, gross margin expanding to 35.3%, and diluted EPS rising to $3.89 from $3.02. The $134.9 million backlog, $173 million of identified opportunities and…
Read full summary
Espey delivered a stronger fiscal 2026, with revenue up 4.95%, gross margin expanding to 35.3%, and diluted EPS rising to $3.89 from $3.02. The $134.9 million backlog, $173 million of identified opportunities and expectation that fiscal 2027 revenue will outpace fiscal 2026 support continued growth, although new products may require heavier engineering investment and temporarily compress gross profit. The principal offset is execution risk: operating cash flow declined sharply as inventory and supplier advances increased, while component lead times can approach a year or more.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $3.89
- Segment
- One reportable operating segment: electronic equipment manufacturing for military and industrial applications; manufacturing-job revenue was $37,582,698 and engineering-job revenue was $8,541,627 in fiscal 2026.
- Segment
- Domestic revenue represented approximately 90% of total revenue in fiscal 2026.
What stood out
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Revenue returned to growth
Fiscal 2026 net sales increased 4.95% to $46,124,325 from $43,950,872, driven primarily by growth in magnetics programs and field service work.
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Material margin expansion
Gross margin expanded to 35.3% from 28.9%, while operating income increased to $11,594,684 from $8,126,686. Management attributed the improvement to higher volume, favorable product mix, completed milestone sales and lower-cost labor groups.
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Strong earnings acceleration
Diluted EPS rose to $3.89 from $3.02, and net income increased to $11,179,759 from $8,142,954. Quarterly diluted EPS also improved from $0.61 in the fiscal 2025 first quarter to $1.15 in the fiscal 2026 fourth quarter.
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Large backlog supports visibility
Backlog totaled $134.9 million at June 30, 2026, with 36% expected to be recognized in fiscal 2027 and another 35% in fiscal 2028. Management also identified approximately $173 million of outstanding opportunities as of September 5, 2026.
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Strong liquidity and no debt
The company ended fiscal 2026 with $19,436,966 of cash and $26,006,718 of investment securities, and had no borrowings during the last two fiscal years. Available liquidity included an unused $3 million line of credit.
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Higher shareholder distributions
Capital returns increased: the company paid $4,831,873 of dividends, including a regular $1.00-per-share dividend and a special $0.75-per-share dividend, versus $2,597,354 paid in fiscal 2025. Fiscal 2027 capital expenditures are expected not to exceed $500,000, excluding grant-funded upgrades.
What to watch
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Working capital is absorbing cash
Operating cash flow fell to $5,690,524 from $20,991,372, primarily because inventories increased by $8,126,359 and prepaid expenses and other current assets increased by $5,564,211. Total inventories rose to $25,968,408 from $17,842,049, increasing execution and working-capital risk.
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Supply-chain and labor delays
Power-electronics component shortages and extended lead times remain material; waiting times for certain components approach a year or more. Management said unforeseen labor disruptions combined with supply-chain constraints could delay shipments and cause the company to miss backlog-fulfillment projections.
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Backlog conversion and contract risk
Conversion of the $14.9 million engineering-program backlog depends on completing design work, customer approvals, prototype materials and schedule milestones. Management specifically noted that technical or scheduling delays and cost overruns could delay sales conversion or reduce profitability; fixed-price contracts also expose the company to losses if actual costs exceed estimates.
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High customer concentration
Customer concentration remains significant: five customers accounted for 67% of fiscal 2026 sales, while three customers represented 60% of trade accounts receivable at June 30, 2026. The loss, delay or financial deterioration of a major customer or program could materially affect results.
Management's outlook
The 10-K provides no numeric EPS or revenue range. Management expects fiscal 2027 revenue to outpace fiscal 2026 and expects fiscal 2027 new orders to meet or exceed fiscal 2026 levels; fiscal 2026 new orders were approximately $41.4 million.
Earlier filings 4
10-Q · February 10, 2026
Espey reported quarterly net sales of $12,136,903 (down from $13,608,740 a year ago) while delivering diluted EPS of $0.99. Gross margin expanded to 34.7% and operating margin to 25.3%, supporting higher net income…
10-Q · November 12, 2025
Espey reported net sales of $9,092,876 and diluted EPS of $0.76 for the three months ended September 30, 2025. Revenue declined versus prior-year net sales of $10,443,218 (-$1,350,342 or -12.9%), but gross margin…
10-Q · May 12, 2025
Espey reported a strong Q3 (three months ended March 31, 2025) with revenue of $10,302,719 (+$2,048,066 or +24.8% vs the prior-year quarter of $8,254,653) and margin expansion. Gross margin rose to 28.6% and operating…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.