Recent News and Announcements - Archived News - Esterline Technologies Corporation

> >

Esterline Reports Q1 2010 Earnings

Feb 25

Michelle DeGrand
2/25/2010

FOR IMMEDIATE RELEASE

ESTERLINE FIRST QUARTER 2010 NET EARNINGS

$12.7 MILLION – $.42 PER SHARE – ON $339.4 MILLION SALES

Highlights:

Income from continuing operations up 10.8% year over year
Sales up 9.6% year over year
Full-year EPS guidance range maintained at $3.20 to $3.45
Backlog — $1.1 billion

BELLEVUE, Wash., Feb. 25, 2010 — Esterline Corporation (NYSE:ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2010 first quarter (ended January 29) income from continuing operations and net income of $12.7 million, or $.42 per diluted share, on sales of $339.4 million. Year-ago income from continuing operations was $11.5 million, or $.38 per diluted share, including a pretax foreign currency loss of $7.9 million related to the funding of an acquisition. Income from discontinued operations in the prior-year period was $.52 per diluted share, reflecting gains on the sale of a U.K.-based operation in November 2008. Year-ago sales were $309.7 million.

Brad Lawrence, Esterline CEO, said, “…our quarterly results were essentially what we expected,” and he reiterated the company’s full-year earnings per share guidance range of $3.20 to $3.45. Lawrence said, “…a very solid performance from our Avionics & Controls segment was offset by softness in our Sensors & Systems segment and the effect of a significantly higher tax rate compared with last year.”

He said, “…our Avionics & Controls segment benefited particularly from the T-6B military trainer cockpit production ramp-up, international C-130 cockpit retrofit programs, and solid demand for our military communications equipment.” He also pointed to pockets of improved demand for commercial air transport spare parts in the segment. In addition, he said, “…we continue to explore adjacent markets for our user interface technologies. Most recently, demand for our custom input systems for casino gaming machines is running ahead of expectations.”

Lawrence said Esterline’s Sensors & Systems and Advanced Materials segments continue to be affected by sluggish commercial air transport and business jet activity, but he said, “…we are beginning to see signs of aftermarket improvement as global commercial airline capacity improves.” He also said that the company’s cost reduction measures taken over the last several quarters will lead to enhanced profitability going forward.

As the company’s December guidance to investors anticipated, gross margins in the first quarter were impacted by the mix of products shipped during the period. Lawrence said, “…we expect margin performance to improve steadily as the year progresses.” Gross margin was 30.8% compared with 33.0% last year.

Selling, general and administrative expenses as a percent of sales were 18.4% in the first quarter of 2010, compared with 19.3% a year ago.

Research, development and engineering (R&D) expenses continued to ratchet down from the mid-2008 peak of 7.0%. R&D spending in the first quarter of 2010 was $17.0 million, or 5.0% of sales, compared with $17.4 million, or 5.6% of sales a year ago. Lawrence said, “The programs we invested in over the last several years are beginning to pay off.” He said, “T-6B production is ramping up rapidly for the U.S. Navy trainer program, and foreign military sales of this aircraft are accelerating.” He said Esterline recently received an initial order from Hawker Beechcraft to supply the integrated avionics suite for twenty-four T-6C trainer aircraft for the Royal Moroccan Air Force.

Lawrence added, “Our investments in the development of open architecture integrated glass cockpits are creating opportunities in retrofit markets.” During the quarter, the Chilean Air Force selected Esterline to upgrade the complete cockpit avionics systems of its C-130 fleet. As prime contractor, Esterline’s Canada-based CMC Electronics subsidiary is responsible for delivery of the complete equipment suite, including the supply of turnkey installation kits as well as all in-country activities, including touch labor, training and support.

The income tax rate for the first quarter of 2010 was 27.2% compared with 15.8% last year. The increase primarily reflects a change in French tax law, the expiration of U.S. R&D credits and changes in the U.S.-Canada tax treaty. In addition, the prior-year period reflected a tax benefit associated with a foreign currency loss.

New orders for the first quarter of 2010 were $342.8 million compared with $370.2 million for the same period in 2009. Orders in the 2009 period included acquired backlog of $65.2 million. Backlog was $1.1 billion compared with $1.2 billion at the end of the prior-year period and $1.1 billion at the end of fiscal 2009.

ESTERLINE TECHNOLOGIES CORPORATION

Consolidated Statement of Operations (unaudited)

In thousands, except per share amounts

Three months ended

Jan 29, Jan 30,

2010 2009

Segment Sales

Avionics & Controls $ 170,257 $ 128,468

Sensors & Systems 74,742 84,555

Advanced Materials 94,361 96,694

Net Sales 339,360 309,717

Cost of Sales 234,831 207,565

104,529 102,152

Expenses

Selling, general and administrative 62,315 59,725

Research, development and engineering 17,047 17,398

Other expense 41 5,014

Total Expenses 79,403 82,137

Operating Earnings From Continuing Operations 25,126 20,015

Interest income (383) (411)

Interest expense 7,961 6,736

Income From Continuing Operations

Before Income Taxes 17,548 13,690

Income Tax Expense 4,769 2,168

Income From Continuing Operations

Including Noncontrolling Interests 12,779 11,522

Income Attributable to Noncontrolling Interests (54) (35)

Income From Continuing Operations 12,725 11,487

Income From Discontinued Operations, Net of Tax -- 15,456

Net Earnings $ 12,725 $ 26,943

Earnings Per Share – Basic:

Continuing Operations $ .43 $ .39

Discontinued Operations -- .52

Earnings Per Share – Basic $ .43 $ .91

Earnings Per Share – Diluted:

Continuing Operations $ .42 $ .38

Discontinued Operations -- .52

Earnings Per Share – Diluted $ .42 $ .90

Weighted Average Number

of Shares Outstanding – Basic 29,789 29,664

Weighted Average Number

of Shares Outstanding – Diluted 30,218 29,865

Consolidated Balance Sheet (unaudited)

In thousands Jan 29, Jan 30,

2010 2009

Assets

Current Assets

Cash and cash equivalents $ 187,050 $ 81,231

Accounts receivable, net 245,527 270,974

Inventories 271,989 275,271

Income tax refundable 7,581 4,066

Deferred income tax benefits 31,059 34,781

Prepaid expenses 19,291 15,141

Other current assets 11,635 468

Total Current Assets 774,132 681,932

Property, Plant and Equipment, Net 270,367 201,562

Other Non-Current Assets

Goodwill 731,792 696,624

Intangibles, net 409,204 384,492

Debt issuance costs, net 6,659 7,213

Deferred income tax benefits 79,593 58,127

Other assets 12,307 36,495

$ 2,284,054 $ 2,066,445

Liabilities and Shareholders' Equity

Current Liabilities

Accounts payable $ 76,980 $ 78,656

Accrued liabilities 172,636 201,716

Credit facilities 1,439 118,858

Current maturities of long-term debt 6,816 8,352

Deferred income tax liabilities 5,932 1,759

Federal and foreign income taxes 936 9,458

Total Current Liabilities 264,739 418,799

Long-Term Liabilities

Long-term debt, net of current maturities 525,737 382,446

Deferred income taxes 127,571 112,932

Pension and post-retirement obligations 93,665 88,673

Other liabilities 21,984 30,038

Shareholders' Equity 1,250,358 1,033,557

$ 2,284,054 $ 2,066,445

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.

Trackback Print

Location:

Esterline

Esterline Corporate

Tags:

Esterline Reports Fourth Quarter and Full Fiscal Year Results... Esterline Selects Geof Eeles to Lead its Advanced Sensors Operations... Esterline Selects Phil Bowker to Lead its Engineered Materials Busines... Esterline Reports FY11 3Q Income from Continuing Operations of $37.7 M... Esterline Completes Acquisition of The Souriau Group... Esterline Selects Michel Potvin to Lead its Control Systems Business P...

KeywordsPhrase

News Archive

	View All Recent Articles
	Esterline