ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations (unaudited)
In thousands, except per share amounts
Three months ended Nine months ended
July 31, August 1, July 31, August 1,
2009 2008 2009 2008
---------- ---------- ---------- ----------
Segment Sales
Avionics & Controls $ 171,027 $ 147,926 $ 468,606 $ 438,008
Sensors & Systems 84,460 103,320 255,770 294,193
Advanced Materials 105,999 112,218 306,329 346,621
---------- ---------- ---------- ----------
Net Sales 361,486 363,464 1,030,705 1,078,822
Cost of Sales 244,339 250,106 698,808 728,864
---------- ---------- ---------- ----------
117,147 113,358 331,897 349,958
Expenses
Selling, general and
administrative 59,694 60,957 174,038 178,082
Research, development and
engineering 14,868 21,460 50,560 68,138
---------- ---------- ---------- ----------
Total Expenses 74,562 82,417 224,598 246,220
Other
Other expense 218 -- 7,946 86
---------- ---------- ---------- ----------
Total Other 218 -- 7,946 86
---------- ---------- ---------- ----------
Operating Earnings From
Continuing Operations 42,367 30,941 99,353 103,652
Interest income (168) (1,066) (949) (3,297)
Interest expense 7,024 7,339 21,370 22,517
Gain on derivative
financial instruments -- -- -- (1,850)
---------- ---------- ---------- ----------
Other Expense, Net 6,856 6,273 20,421 17,370
---------- ---------- ---------- ----------
Income From Continuing
Operations Before Income
Taxes 35,511 24,668 78,932 86,282
Income Tax Expense 3,009 6,232 9,493 13,981
---------- ---------- ---------- ----------
Income From Continuing
Operations Before Minority
Interest 32,502 18,436 69,439 72,301
Minority Interest (24) (36) (136) (229)
---------- ---------- ---------- ----------
Income From Continuing
Operations 32,478 18,400 69,303 72,072
Income From Discontinued
Operations, Net of Tax 163 2,082 15,994 4,579
---------- ---------- ---------- ----------
Net Earnings $ 32,641 $ 20,482 $ 85,297 $ 76,651
========== ========== ========== ==========
Earnings Per Share - Basic:
Continuing Operations $ 1.09 $ .62 $ 2.33 $ 2.45
Discontinued Operations .01 .07 .54 .15
---------- ---------- ---------- ----------
Earnings Per Share - Basic $ 1.10 $ .69 $ 2.87 $ 2.60
========== ========== ========== ==========
Earnings Per Share - Diluted:
Continuing Operations $ 1.09 $ .61 $ 2.32 $ 2.41
Discontinued Operations .00 .07 .54 .15
---------- ---------- ---------- ----------
Earnings Per Share
- Diluted $ 1.09 $ .68 $ 2.86 $ 2.56
========== ========== ========== ==========
Weighted Average Number of
Shares Outstanding - Basic 29,736 29,575 29,701 29,466
Weighted Average Number of
Shares Outstanding - Diluted 29,870 29,994 29,855 29,894
Consolidated Balance Sheet (unaudited)
In thousands July 31, August 1,
2009 2008
---------- ----------
Assets
Current Assets
Cash and cash equivalents $ 148,807 $ 162,552
Accounts receivable, net 248,476 249,083
Inventories 296,398 298,461
Income tax refundable 9,453 6,495
Deferred income tax benefits 28,636 31,907
Prepaid expenses 17,013 15,774
Other current assets 19,240 --
---------- ----------
Total Current Assets 768,023 764,272
Property, Plant and Equipment, Net 243,955 215,909
Other Non-Current Assets
Goodwill 743,864 651,381
Intangibles, net 435,433 339,146
Debt issuance costs, net 7,612 7,957
Deferred income tax benefits 65,518 46,041
Other assets 8,541 25,715
---------- ----------
$2,272,946 $2,050,421
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 70,754 $ 88,763
Accrued liabilities 211,208 181,583
Credit facilities 3,798 8,550
Current maturities of long-term debt 798 8,649
Federal and foreign income taxes 4,372 14,173
---------- ----------
Total Current Liabilities 290,930 301,718
Long-Term Liabilities
Long-term debt, net of current
maturities 509,776 390,221
Deferred income taxes liabilities 129,006 118,307
Other liabilities 98,557 54,051
Commitments and Contingencies -- --
Minority Interest 2,933 2,643
Shareholders' Equity 1,241,744 1,183,481
---------- ----------
$2,272,946 $2,050,421
========== ==========
Esterline 3Q Earnings From Continuing Operatons $32.5 Million -- $1.09 per Share -- on $361.5 Million Sales
Third Quarter Tax Benefit Contributes About $.10 per Share
| Source: Esterline Technologies
BELLEVUE, WA--(Marketwire - September 3, 2009) - Esterline Corporation (NYSE : ESL )
(www.esterline.com), a leading specialty manufacturer serving
aerospace/defense markets, today reported fiscal 2009 third quarter (ended
July 31) income from continuing operations of $32.5 million, or $1.09 per
diluted share, on sales of $361.5 million. Earnings include a tax benefit
of approximately $.10 per share. Year-ago income from continuing
operations was $18.4 million, or $.61 per diluted share, on sales of $363.5
million.
Robert W. Cremin, Esterline CEO, said, "...Esterline posted a very solid
quarter, keeping us on pace with our full-year guidance despite continued
uncertainty in the commercial airline industry." Esterline's full-year
earnings guidance now stands at $3.10 to $3.30 per share, reflecting the
third quarter tax benefit.
Cremin said, "...we feel good going into our fourth quarter, though our
guidance range reflects some caution." He said commercial aviation spares
sales appear to have bottomed as customers work to balance inventory
levels, but he noted that "...these sales can be difficult to forecast
accurately due to short lead times." The extent of the business jet market
decline also continues to affect the performance of certain operations,
especially in the company's Sensors & Systems segment.
Cremin reiterated comments he made last quarter regarding the timing of
military countermeasure flares shipments. He said, "...the scarcity of
specialized ships for transporting foreign orders of these products
continues to be an issue. We know the orders will ship; we just aren't
certain at this point if they'll ship in fiscal 2009 or push into 2010."
Gross margin improved in the quarter as a percentage of sales to 32.4%,
compared to 31.2% in the same period a year ago. Cremin said the margin
increase was due "...primarily to improved performance in our Avionics &
Controls segment."
He said, "...we continue to focus on operational excellence -- making
appropriate adjustments to individual business circumstances." He noted
that the company has continued to tighten SG&A (selling, general and
administrative) expenses. He also said that R&D spending "...is coming
down to our more normalized level of 4.5%, following the ramp-up over the
last several years to win positions on significant new programs, such as
the JSF, 787 and T-6B."
"Investing in the future remains a cornerstone of our strategy," he said,
adding that Esterline "...recently stepped up to partner with Rolls-Royce
to develop the sensors for its new Trent XWB engine for the Airbus A350."
He said, "...we're also in the midst of several important plant expansions
to prepare for the growth we anticipate as new programs come on-line and
economic conditions improve."
The effective income tax rate for the third quarter of 2009 was 8.5%
including a reversal of prior expenses related to the application of
certain foreign tax laws, and a tax benefit associated with the
reconciliation of the prior year's tax returns. The tax rate excluding
these two events was 17.5%. Last year's effective income tax rate was
25.3%.
Income from discontinued operations in the third quarter of 2009 was less
than $.01 per diluted share, compared with $.07 per diluted share in the
prior-year period. Net income was $32.6 million, or $1.09 per diluted
share, compared with $20.5 million, or $.68 per diluted share, in the
prior-year period.
For the first nine months of fiscal 2009, Esterline reported net earnings
from continuing operations of $69.3 million, or $2.32 per diluted share, on
sales of $1.03 billion. This compared with net earnings from continuing
operations of $72.1 million, or $2.41 per diluted share, on $1.08 billion
in sales for the same period in 2008. Income from discontinued operations
in the first nine months of 2009 was $.54 per diluted share, compared with
$.15 per diluted share in the prior-year period. Net income was $85.3
million, or $2.86 per diluted share, compared with $76.7 million, or $2.56
per diluted share, in the prior-year period.
New orders for the first nine months of 2009 were $1.01 billion compared
with $1.15 billion for the same period in 2008. Backlog was $1.07 billion
compared with $1.02 billion at the end of the prior-year period and $1.1
billion at the end of fiscal 2008.
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.