ESPNYSEElectronic Components, NECUS GAAP · USD

Espey Mfg. & Electronics Corp

Espey Mfg. & Electronics Corp. designs and manufactures power electronics and rugged electrical equipment for military, defense, industrial, and severe-environment applications. The company operates as a vertically integrated OEM, handling design, component fabrication, assembly, testing, and qualification in-house at its Saratoga Springs, New York facility.

Revenue46.1m USD
+4.9 %y/y
Operating profit (EBIT)11.6m USD
+42.7 %y/y
EBIT margin25.1%
+6.6 ppy/y
Net income11.2m USD
+37.3 %y/y
Free cash flow2.6m USD
−84.5 %y/y

Fiscal year 2026 · change from previous year

Development 2021–2026

-1001020304050m USD2021: 28 m USD2021: EBIT -0.43 m USD20212022: 32 m USD2022: EBIT 1.5 m USD20222023: 36 m USD2023: EBIT 4.3 m USD20232024: 39 m USD2024: EBIT 6.5 m USD20242025: 44 m USD2025: EBIT 8.1 m USD20252026: 46 m USD2026: EBIT 12 m USD20264612
RevenueOperating profit (EBIT)

Business

Share of revenue
Power electronics equipment45 %

Custom and standard power supplies, converters, UPS systems, and power distribution products.

Magnetics and transformers20 %

Power transformers, inductors, and related magnetic components used in rugged applications.

Defense and industrial build-to-print20 %

Customer-specified manufacturing of electronic and electromechanical assemblies.

Engineering and test services10 %

Design, development, design studies, and environmental qualification/testing services.

Metal fabrication and finishing5 %

In-house fabrication, painting, wiring, and assembly support for finished systems.

Customers

Espey sells primarily to U.S. defense customers, the Department of Defense, foreign governments, and industrial manufacturers that need ruggedized electronics. A small number of programs and customers account for a large share of sales, so order timing and contract awards can materially affect results.

U.S. defense and federal government

Buys power electronics, antennas, and rugged assemblies for military programs and procurement needs.

Defense contractors

Sources build-to-print and custom electronic equipment for prime and subcontracted defense programs.

Foreign governments

Purchases military and severe-environment equipment for defense and infrastructure applications.

Industrial manufacturers

Buys custom power conversion and testing solutions for locomotives, shipboard, and industrial uses.

Major foreign electronic equipment companies

Sources specialized components and assemblies where qualification and reliability matter.

Strategy

Espey is focused on winning and executing fixed-price defense and industrial contracts while maintaining its reputation for reliable, severe-environment power electronics. Management is also trying to reduce customer concentration, preserve liquidity, and use its vertically integrated manufacturing base to control quality, lead times, and program risk.

Reduce customer and program concentrationMedium term

A small number of customers account for most sales, so diversification lowers earnings volatility.

Protect execution quality on fixed-price contractsShort term

Profitability depends on estimating costs accurately and delivering complex products on budget.

Preserve balance sheet flexibilityShort term

Working capital and operating cash flow support growth without near-term borrowing needs.

Geography

Espey is headquartered and manufactures in Saratoga Springs, New York, where design, fabrication, assembly, and testing are performed in a 174,000+ square foot facility. Revenue is driven mainly by U.S. defense and industrial customers, but the company also serves foreign governments and overseas equipment makers, creating some export and geopolitical exposure.

Risks

Espey’s business is exposed to customer concentration, contract timing, and cost-estimation risk because a few defense and industrial programs drive most revenue. It also faces competition from larger and smaller electronics manufacturers, plus execution and supply-chain risk in a vertically integrated, highly specialized production model.

Sorted by severity
Customer concentrationHigh

Five customers represented 82% of quarterly sales and six customers 75% of nine-month sales, so one loss can materially reduce revenue.

Exposure: Defense programs and major industrial accounts

Fixed-price contract margin pressureHigh

Profit depends on accurate cost estimates; overruns can reduce margin or create losses.

Exposure: Military and design/build contracts

Defense procurement and delivery deferralsMedium

Government and contractor demand can shift with budget cycles, program changes, or customer-requested delays.

Exposure: U.S. Department of Defense and related agencies

Operational concentration at one facilityMedium

Design, manufacturing, and testing are centered in one New York site, increasing disruption exposure.

Exposure: Saratoga Springs facility

Accounting

Judgemental items
Revenue recognition on fixed-price contracts

Revenue and profit depend on contract performance and estimated costs, so changes in estimates can shift earnings between periods.

Impact: Can materially affect gross margin and quarterly comparability

Inventory valuation

Specialized materials and work-in-process may require judgment on obsolescence and recoverability.

Impact: Can affect cost of sales and asset values

Deferred taxes

Tax assets and liabilities depend on future taxable income and timing differences.

Impact: Can affect effective tax rate and balance sheet

Publicly listed companies with a comparable business focus.

Last updated: 28/04/2026