Income from continuing operations $41.4 million, or $1.38 per share, on $404.4 million sales
BELLEVUE, Wash., December 11, 2008 – Esterline Corporation (NYSE: ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2008 fourth quarter and full-year results for the period ended October 31, 2008. Net income from continuing operations for the quarter was a record $41.4 million, or $1.38 per diluted share, on sales of $404.4 million. For the same period last year, income from continuing operations was $20.5 million, or $.76 per diluted share, on sales of $355.7 million. (Continuing operations exclude results from Esterline’s Muirhead Aerospace subsidiary, divested on November 3, 2008.)
For the full year ended October 31, 2008, Esterline reported net earnings from continuing operations of $113.5 million, or $3.80 per diluted share, on sales of $1.48 billion, compared with net earnings from continuing operations of $87.8 million, or $3.34 per diluted share, on $1.21 billion in sales in 2007. Full year 2007 results included an after-tax gain of $26.2 million, or $1.00 per diluted share, due to an insurance recovery.
Robert W. Cremin, Esterline CEO, said, “…with strong organic growth we recorded another solid year, benefiting from improved performance across the board in each of our three operating segments.” Cremin said that top-line organic growth was 14% and 17% respectively for the fourth quarter and full year, when compared to same-period 2007 results. He pointed out that fourth quarter earnings were bolstered by the recently strengthening U.S. dollar. Noting that aerospace pricing is primarily denominated in U.S. dollars, Cremin said that with “…nearly half of our manufacturing operations outside the U.S.—most notably in Canada, France and the U.K.—the headwind we faced for most of the year has shifted in our favor.”
Fourth quarter 2008 research, development and engineering (R&D) expense totaled $18.7 million, or 4.6% of sales, compared with $19.9 million, or 5.6% of sales, in the same quarter a year ago. Full-year 2008 R&D totaled $86.8 million, or 5.9% of sales, compared with $66.9 million, or 5.5% of sales, last year. Cremin noted that the recent downward trend reflects “…a return to more normalized R&D investment following several years of successful efforts to secure Tier 1 positions on a number of major programs that will fly for decades to come.” He added that, “…for the hundreds of active aircraft platforms flying today, our total dollar content per aircraft is growing steadily due to our constant technology advancements, new products and market share gains.”
Cremin also noted the company’s cash generating capability, pointing out that Esteline retired approximately $64 million in term loans and other debt during the year.
Backlog at fiscal year end was $1.1 billion, ahead of last year by nearly 14%. Orders received in the fourth quarter totaled $469.4 million—up 31% on both a year-over-year and sequential basis. Cremin said he was optimistic about the company’s prospects, and estimated full-year 2009 earnings per share from continuing operations to be in the range of $3.70 to $3.90.
Cremin said, “…our core strategy positions us to perform well no matter where we are in a cycle.” He pointed to Esterline’s diverse product mix, balanced global market position, and underlying entrepreneurial culture as “…key underpinnings of achieving success during difficult market conditions.”
Esterline is a leading world-wide supplier to the aerospace and defense industry specializing in three core areas: Avionics & Controls, Sensors & Systems, and Advanced Materials.
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.
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