ESTERLINE TECHNOLOGIES CORPORATION Consolidated Statement of Operations (unaudited) In thousands, except per share amounts Three months ended Fiscal year ended Oct 30, Oct 31, Oct 30, Oct 31, 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Segment Sales Avionics & Controls $ 204,222 $ 173,459 $ 672,828 $ 611,467 Sensors & Systems 83,962 89,987 339,732 384,180 Advanced Materials 106,549 140,904 412,878 487,525 ---------- ---------- ---------- ---------- Net Sales 394,733 404,350 1,425,438 1,483,172 Cost of Sales 264,781 263,989 963,589 992,853 ---------- ---------- ---------- ---------- 129,952 140,361 461,849 490,319 Expenses Selling, general and administrative 65,592 61,200 239,630 239,282 Research, development and engineering 15,710 18,660 66,270 86,798 ---------- ---------- ---------- ---------- Total Expenses 81,302 79,860 305,900 326,080 Other Other expense 24 -- 7,970 86 ---------- ---------- ---------- ---------- Total Other 24 -- 7,970 86 ---------- ---------- ---------- ---------- Operating Earnings From Continuing Operations 48,626 60,501 147,979 164,153 Interest income (685) (1,077) (1,634) (4,374) Interest expense 7,319 7,405 28,689 29,922 Gain on derivative financial instruments -- -- -- (1,850) ---------- ---------- ---------- ---------- Other Expense, Net 6,634 6,328 27,055 23,698 ---------- ---------- ---------- ---------- Income From Continuing Operations Before Income Taxes 41,992 54,173 120,924 140,455 Income Tax Expense 4,018 12,582 13,511 26,563 ---------- ---------- ---------- ---------- Income From Continuing Operations Before Minority Interest 37,974 41,591 107,413 113,892 Minority Interest (81) (154) (217) (383) ---------- ---------- ---------- ---------- Income From Continuing Operations 37,893 41,437 107,196 113,509 Income (Loss) From Discontinued Operations, Net of Tax (3,392) 2,445 12,602 7,024 ---------- ---------- ---------- ---------- Net Earnings $ 34,501 $ 43,882 $ 119,798 $ 120,533 ========== ========== ========== ========== Earnings Per Share - Basic: Continuing Operations $ 1.27 $ 1.40 $ 3.61 $ 3.85 Discontinued Operations (.11) .08 .42 .23 ---------- ---------- ---------- ---------- Earnings Per Share - Basic $ 1.16 $ 1.48 $ 4.03 $ 4.08 ========== ========== ========== ========== Earnings Per Share - Diluted: Continuing Operations $ 1.26 $ 1.38 $ 3.58 $ 3.80 Discontinued Operations (.11) .08 .42 .23 ---------- ---------- ---------- ---------- Earnings Per Share - Diluted $ 1.15 $ 1.46 $ 4.00 $ 4.03 ========== ========== ========== ========== Weighted Average Number of Shares Outstanding - Basic 29,763 29,635 29,717 29,507 Weighted Average Number of Shares Outstanding - Diluted 30,034 29,955 29,951 29,908 Consolidated Balance Sheet (unaudited) In thousands Oct 30, Oct 31, 2009 2008 ------------ ------------ Assets Current Assets Cash and cash equivalents $ 176,794 $ 160,645 Accounts receivable, net 270,976 297,506 Inventories 275,282 261,973 Income tax refundable 7,638 5,567 Deferred income tax benefits 31,434 37,702 Prepaid expenses 17,425 13,040 Other current assets 17,048 897 ------------ ------------ Total Current Assets 796,597 777,330 Property, Plant and Equipment, Net 263,251 204,462 Other Non-Current Assets Goodwill 736,808 576,861 Intangibles, net 422,082 290,440 Debt issuance costs, net 7,136 7,587 Deferred income tax benefits 79,114 55,821 Other assets 9,259 9,601 ------------ ------------ $ 2,314,247 $ 1,922,102 ============ ============ Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 82,304 $ 89,807 Accrued liabilities 191,667 210,422 Credit facilities 5,896 5,171 Current maturities of long-term debt 5,409 8,388 Deferred income tax liabilities 7,294 2,889 Federal and foreign income taxes 1,669 4,442 ------------ ------------ Total Current Liabilities 294,239 321,119 Long-Term Liabilities Long-term debt, net of current maturities 520,158 388,248 Deferred income taxes 130,456 97,830 Pension and post-retirement obligations 94,308 68,966 Other liabilities 19,334 16,801 Minority Interest 2,731 2,797 Shareholders' Equity 1,253,021 1,026,341 ------------ ------------ $ 2,314,247 $ 1,922,102 ============ ============
Esterline Reports FY09 Earnings From Continuing Operations $107.2 Million -- $3.58 per Share -- on $1.43 Billion Sales
Performance Includes an $.08 Fourth Quarter Tax Benefit
| Source: Esterline Technologies
BELLEVUE, WA--(Marketwire - December 10, 2009) - Esterline Corporation, (NYSE : ESL )
(www.esterline.com), a leading specialty manufacturer serving
aerospace/defense markets, today reported fiscal 2009 fourth quarter and
full-year results for the period ended October 30, 2009. Income from
continuing operations for the quarter was $37.9 million, or $1.26 per
diluted share, on sales of $394.7 million. Earnings include year-end tax
adjustments resulting in a benefit of $.08 per share. Year-ago income from
continuing operations was $41.4 million, or $1.38 per diluted share, on
sales of $404.4 million. Including discontinued operations, fourth quarter
fiscal 2009 net earnings were $34.5 million, or $1.15 per share, compared
with $43.9 million, or $1.46 per share, last year.
For the full year, Esterline reported income from continuing operations of
$107.2 million, or $3.58 per diluted share, compared with $113.5 million,
or $3.80 per diluted share last year. Net earnings were $119.8 million, or
$4.00 per share in FY2009, compared with $120.5 million, or $4.03 per share
last year. FY2009 net sales were $1.43 billion compared with $1.48 billion
a year ago.
Brad Lawrence, Esterline CEO, said the company's performance "...exceeded
our expectations due primarily to a strong finish from our Canada-based
avionics operation where R&D investments in the new T-6B military trainer
cockpit and C-130 avionics retrofit programs are beginning to pay off."
Lawrence added that the seamless integration of UK-based Racal Acoustics,
acquired earlier in the year, enabled that operation to "...outperform our
first-year expectations."
He also said that a tight focus on cost control and pricing discipline at
all of our operations "...helped us sustain margins and keep a lid on
expenses during the year."
Gross margins in FY2009 were 32.4% compared with 33.1% last year, and
selling, general and administrative expenses held at $239 million for both
years. FY2009 research, development and engineering expenses (R&D) totaled
$66.3 million, or 4.6% of sales, compared with $86.8 million, or 5.9% of
sales, in FY2008. This continued a trend toward more normalized R&D levels
following several years of significant investments to secure important
positions on a number of new programs. Lawrence added that the company
"...continues to invest in the consolidation of our capabilities to improve
operational efficiencies."
Lawrence said that Esterline's solid balance sheet, ability to generate
cash from operations, and its $1.1 billion backlog "...puts us in a strong
position to benefit as market conditions improve." He also noted that
Esterline's balanced business mix helped dampen the impact of the
commercial air transport and business jet market downturn in FY2009, saying
that Esterline expects these headwinds to lessen in the second half of
FY2010.
FY2010 Outlook
Throughout FY2009, the company generated progressively stronger quarterly
results following a soft first quarter. We expect FY2010 to unfold in a
similar manner. Anticipated lower margin sales mix early in the year,
combined with extended holiday shutdowns and a higher tax rate indicate
similar results to last year's first quarter. We expect to be well
positioned for improved performance in the remainder of the year. FY2010
annual revenue is expected to grow 3% to 5% with fully diluted earnings per
share in the range of $3.20 to $3.45. The effective tax rate for FY2010 is
anticipated to be in the low- to mid-20% range, compared with the 11.2%
rate in FY2009.
Conference Call Information
Esterline will host a conference call to discuss this announcement today at
5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The U.S. dial-in number
is 866.543.6405; outside the U.S., use 617.213.8897. The pass code for the
call is: 94459594.
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements
relate to future events or our future financial performance. In some cases,
you can identify forward-looking statements by terminology such as
"anticipate," "believe," "continue," "could," "estimate," "expect,"
"intend," "may," "might," "plan," "potential," "predict," "should" or
"will," or the negative of such terms, or other comparable terminology.
These forward-looking statements are only predictions based on the current
intent and expectations of the management of Esterline, are not guarantees
of future performance or actions, and involve risks and uncertainties that
are difficult to predict and may cause Esterline's or its industry's actual
results, performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by the
forward-looking statements. Esterline's actual results and the timing and
outcome of events may differ materially from those expressed in or implied
by the forward-looking statements due to risks detailed in Esterline's
public filings with the Securities and Exchange Commission including its
most recent Annual Report on Form 10-K.