Revenues up 17%; Earnings up 29% Compared with Last Year
BELLEVUE , Wash. , June 1, 2006 — Esterline Corporation (NYSE/ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2006 second quarter (ended April 28) income from continuing operations of $17.7 million, or $.68 per diluted share, on $247.9 million sales. Year-ago income from continuing operations was $13.7 million, or $.54 per diluted share, on sales of $211.6 million.
Robert W. Cremin, Esterline CEO said, “…the results for the quarter were solid and reflect our continued ability to drive our operating efficiency while simultaneously investing in the R&D necessary to ensure the long-term health of the company.”
Cremin said that new order intake during the quarter continued strong, and backlog at the end of the quarter was “…a record $633 million, nearly 30% higher than last year.” He noted that the company’s backlog reflects only fully funded orders with firm release dates, and is a “…fairly good indicator of the company’s future strength.”
In March 2006, Esterline completed the acquisition of Wallop Defence Systems in the United Kingdom, for approximately $58 million. Wallop, a leading international producer of military countermeasure flares, combines with Esterline’s leading domestic market position. Cremin said that “…pyrotechnic know-how is a core strength that Esterline has been actively developing for many years.” Due to the timing of the acquisition, Wallop had no significant impact on the quarter’s performance, but Cremin said he is encouraged by early results.
Research, development and engineering spending in the quarter increased to $12.9 million compared with $9.9 million for the second fiscal quarter of 2005. Cremin said, “…the increase in R&D reflects spending on new programs such as the Airbus A400M primary power distribution assembly and the pilot’s overhead control panel for Boeing’s new 787 Dreamliner.”
The effective tax rate for the second fiscal quarter of 2006 was 28.3%, before a $2.0 million reduction in previously estimated tax liabilities, the result of a favorable tax audit concluded on April 25, 2006. The effective tax rate a year ago was 30.3%.
Year-to-date income from continuing operations was $26.0 million, or $1.01 per diluted share, on sales of $453.6 million. For the first six months of fiscal 2005, comparable earnings were $23.8 million, or $.95 per diluted share, on sales of $401.4 million.
Net earnings in the fiscal 2006 second quarter and first half were unaffected by discontinued operations. Fiscal 2005 reported income from discontinued operations principally from the sale of the company’s Fluid Regulators subsidiary. That sale resulted in a gain of approximately $7.0 million, net of tax of $2.4 million, or $.28 per diluted share, in the first quarter of 2005. Net earnings for the fiscal second quarter and first half of 2005 were $13.2 million, or $.52 per diluted share, and $30.8 million, or $1.23 per diluted share, respectively.
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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