ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations (unaudited)
In thousands, except per share amounts
Three Months Ended Nine Months Ended
------------------------ ------------------------
July 30, July 31, July 30, July 31,
2010 2009 2010 2009
----------- ----------- ----------- -----------
Net Sales $ 383,486 $ 361,486 $ 1,110,466 $ 1,030,705
Cost of Sales 251,778 244,339 745,031 698,808
----------- ----------- ----------- -----------
131,708 117,147 365,435 331,897
Expenses
Selling, general and
administrative 64,503 59,694 192,112 174,038
Research, development
and engineering 17,763 14,868 53,287 50,560
Other (income) expense (8) 218 (5) 7,946
----------- ----------- ----------- -----------
Total Expenses 82,258 74,780 245,394 232,544
----------- ----------- ----------- -----------
Operating Earnings From
Continuing Operations 49,450 42,367 120,041 99,353
Interest income (248) (168) (651) (949)
Interest expense 8,082 7,024 23,391 21,370
----------- ----------- ----------- -----------
Income From Continuing
Operations Before
Income Taxes 41,616 35,511 97,301 78,932
Income Tax Expense 1,728 3,009 14,962 9,493
----------- ----------- ----------- -----------
Income From Continuing
Operations Including
Noncontrolling Interests 39,888 32,502 82,339 69,439
Income Attributable to
Noncontrolling Interests (30) (24) (108) (136)
----------- ----------- ----------- -----------
Income From Continuing
Operations 39,858 32,478 82,231 69,303
Income From Discontinued
Operations, Net of Tax -- 163 -- 15,994
----------- ----------- ----------- -----------
Net Earnings $ 39,858 $ 32,641 $ 82,231 $ 85,297
=========== =========== =========== ===========
Earnings Per Share
- Basic:
Continuing Operations $ 1.33 $ 1.09 $ 2.75 $ 2.33
Discontinued Operations -- .01 -- .54
----------- ----------- ----------- -----------
Earnings Per Share
- Basic $ 1.33 $ 1.10 $ 2.75 $ 2.87
=========== =========== =========== ===========
Earnings Per Share
- Diluted:
Continuing Operations $ 1.30 $ 1.09 $ 2.71 $ 2.32
Discontinued Operations -- .00 -- .54
----------- ----------- ----------- -----------
Earnings Per Share
- Diluted $ 1.30 $ 1.09 $ 2.71 $ 2.86
=========== =========== =========== ===========
Weighted Average Number
of Shares Outstanding
- Basic 30,043 29,736 29,913 29,701
Weighted Average Number
of Shares Outstanding
- Diluted 30,558 29,870 30,394 29,855
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Sales and Income from Continuing Operations by
Segment (unaudited)
In thousands
Three Months Ended Nine Months Ended
------------------------ ------------------------
July 30, July 31, July 30, July 31,
2010 2009 2010 2009
----------- ----------- ----------- -----------
Segment Sales
Avionics & Controls $ 194,300 $ 171,027 $ 563,276 $ 468,606
Sensors & Systems 79,247 84,460 234,335 255,770
Advanced Materials 109,939 105,999 312,855 306,329
----------- ----------- ----------- -----------
Net Sales $ 383,486 $ 361,486 $ 1,110,466 $ 1,030,705
=========== =========== =========== ===========
Income from Continuing
Operations
Avionics & Controls $ 30,464 $ 27,076 $ 78,357 $ 63,236
Sensors & Systems 10,557 6,976 24,346 27,127
Advanced Material 19,175 16,101 45,032 40,434
----------- ----------- ----------- -----------
60,196 50,153 147,735 130,797
Corporate expense (10,754) (7,568) (27,699) (23,498)
Other income (expense) 8 (218) 5 (7,946)
Interest income 248 168 651 949
Interest expense (8,082) (7,024) (23,391) (21,370)
----------- ----------- ----------- -----------
Income From Continuing
Operations Before Income
Taxes $ 41,616 $ 35,511 $ 97,301 $ 78,932
=========== =========== =========== ===========
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Balance Sheet (unaudited)
In thousands
July 30, July 31,
2010 2009
------------ ------------
Assets
Current Assets
Cash and cash equivalents $ 282,910 $ 148,807
Accounts receivable, net 272,529 248,476
Inventories 266,974 296,398
Income tax refundable 11,691 9,453
Deferred income tax benefits 38,313 36,266
Prepaid expenses 17,350 17,013
Other current assets 13,023 19,240
------------ ------------
Total Current Assets 902,790 775,653
Property, Plant and Equipment, Net 274,207 243,955
Other Non-Current Assets
Goodwill 733,537 743,864
Intangibles, net 392,183 435,433
Debt issuance costs, net 5,706 7,612
Deferred income tax benefits 83,727 65,518
Other assets 10,143 8,541
------------ ------------
$ 2,402,293 $ 2,280,576
============ ============
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 79,588 $ 70,754
Accrued liabilities 200,343 211,208
Credit facilities 2,196 3,798
Current maturities of long-term debt 10,008 798
Deferred income tax liabilities 7,139 7,630
Federal and foreign income taxes 3,310 4,372
------------ ------------
Total Current Liabilities 302,584 298,560
Long-Term Liabilities
Long-term debt, net of current maturities 531,698 509,776
Deferred income tax liabilities 128,327 129,006
Pension and post-retirement obligations 88,126 79,554
Other liabilities 18,347 19,003
Shareholders' Equity 1,333,211 1,244,677
------------ ------------
$ 2,402,293 $ 2,280,576
============ ============
Esterline Reports 23% Earnings Improvement; Raises Full-Year EPS Guidance to $3.85 - $3.95
Earnings From Continuing Operations $39.9 Million, or $1.30 per Share, on $383.5 Million Sales
| Source: Esterline Technologies Corporation
BELLEVUE, WA--(Marketwire - September 2, 2010) - Esterline Corporation (NYSE : ESL )
(www.esterline.com), a leading specialty manufacturer serving
aerospace/defense markets, today reported fiscal 2010 third quarter (ended
July 30) income from continuing operations of $39.9 million, or $1.30 per
diluted share, on sales of $383.5 million. Year-ago income from continuing
operations was $32.5 million, or $1.09 per diluted share, on sales of
$361.5 million.
Brad Lawrence, Esterline's CEO, said the solid performance --
year-over-year sales up 6% and earnings from continuing operations up
nearly 23% -- reflected strength from the company's Avionics & Controls
business segment, where "...sales to new and retrofit military cockpit
programs are providing a significant boost to Esterline."
"This performance improvement reflects increasing production demand for the
Hawker Beechcraft T-6B military trainer," Lawrence said. "Esterline
provides the aircraft's full integrated cockpit solution -- from flight
management system to head-up display (HUD)."
Lawrence said that continued success in the international market for C-130
cockpit upgrades is incremental to our solid base of military retrofit
business, such as a recently announced $23.6 million contract extension
from Sikorsky. That contract covers upgraded flight management systems and
emergency control panels for U.S. Army and international Black Hawk
helicopters through 2012.
Also in the Avionics & Controls segment is the company's interface
technologies operation. Lawrence pointed out that this business is
benefiting from increased demand from the medical imaging market due to
higher equipment utilization rates and a growing need for the replacement
of older systems. "This is a good example of how Esterline leverages its
core aerospace technologies into other high-end applications," he said.
"On the commercial aerospace side, we're beginning to see activity in
preparation for the previously announced production increases on the Airbus
A320 and Boeing 737 lines," Lawrence said. "This improving OEM business is
particularly beneficial to our Advanced Materials and Sensors & Systems
business segments."
Based on the improving outlook, the company is raising its full-year
earnings per share guidance range to $3.85 to $3.95 -- up from the earlier
range of $3.45 to $3.65. "At the beginning of the year, we expected our
base business to hold steady with growth coming from new programs,"
Lawrence said. "We are now seeing even better than expected performance on
both fronts." Lawrence said Esterline's consistent investment in R&D and
good-fit acquisitions "...is clearly shaping our performance. The results
we're generating today illustrate the power of that strategy."
Commercial spare parts business at Esterline is showing "...some signs of
improvement," Lawrence said, noting that Asian demand is strong and
improving, while U.S. demand has flattened from gains made early in the
year, and European markets show little sign of recovery.
Consolidated gross margin in the quarter was 34.3% compared with 32.4% a
year ago. The increase in gross margin mainly reflected cost control
measures, improved recovery of fixed costs due to higher sales volumes, and
a favorable sales mix of military and commercial aerospace products,
particularly cockpit integration systems.
Selling, general and administrative expenses (SG&A) as a percent of sales
were 16.8% in the quarter compared with 16.5% in the prior-year period.
The increase in the amount of SG&A expenses was due principally to a
reduction in foreign currency exchange gain on forward contracts, and
increased incentive compensation accruals due to the improved financial
performance.
Research, development and engineering expense for the quarter was 4.6% of
sales compared with 4.1% a year ago. Lawrence said that Esterline's R&D
expense has stabilized in the 4.5% to 5% range.
For the quarter, the income tax rate was 4.2% compared with 8.5% a year
ago. This quarter benefited from a $7.6 million discrete tax benefit,
principally due to the expiration of a statute of limitations, compared
with a $3.2 million discrete tax benefit in the prior-year period.
For the first nine months of fiscal 2010, Esterline reported income from
continuing operations and net income of $82.2 million, or $2.71 per diluted
share, on sales of $1.1 billion. Income from continuing operations in the
same period last year was $69.3 million, or $2.32 per diluted share.
Income from discontinued operations in the first nine months of 2009 was
$.54 per diluted share. Net income in that period was $85.3 million, or
$2.86 per diluted share, on $1.0 billion in sales.
Backlog at quarter-end totaled $1.2 billion, about 9% ahead of last year.
New orders in the first nine months of fiscal 2010 totaled $1.2 billion, up
more than 18% compared with the same period a year ago.
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.