BELLEVUE, Wash., September 1, 2005 — Esterline Corporation (NYSE/ESL www.esterline.com ), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2005 third quarter (ended July 29) income from continuing operations of $14.2 million, or $.55 per diluted share, on $209.9 million sales. Year-ago income from continuing operations was $7.1 million, or $.33 per diluted share, on sales of $147.4 million.
Robert W. Cremin , Esterline CEO said, “…the quarter was another solid performance for Esterline.” The company’s commercial aerospace business continues to improve, offsetting a reduction in immediate requirements of combustible ammunition components by the U.S. Army during the quarter. Cremin said that, “…basically, Esterline’s performance reflects higher sales volumes — due to strengthening customer demand — without a proportional increase in our operating expenses.”
During the quarter Esterline completed the acquisition of Palomar Products, Inc., a California-based manufacturer of secure military communication products. Last month Palomar announced a contract with Lockheed to provide the secure communications solution for the new US101 Presidential Helicopter program.
Cremin added that Leach International — acquired by Esterline a year ago — is now “…solidly outperforming our expectations in all significant financial metrics.” He said that, “…although the Leach operations have somewhat lower native margins when compared with other Esterline operations, we have seen solid improvement in those margins since the acquisition.”
R&D spending in the quarter rose to $11.0 million, or 5.2% of sales, compared with $5.9 million, or 4.0% of sales, for the third quarter of fiscal 2004. Cremin noted that Esterline’s success at winning Tier I contracts will lead to increased research, development and engineering spending in the short term, but he said that “…the long-term expected return is high.”
Year-to-date income from continuing operations was $38.5 million, or $1.53 per diluted share, on sales of $611.3 million. For the first nine months of fiscal 2004, comparable earnings were $17.7 million, or $.82 per diluted share, on sales of $423.3 million.
Including results from discontinued operations, year-to-date net earnings were $45.4 million, or $1.81 per diluted share, compared with $19.4 million, or $.90 per diluted share a year ago. Fiscal year 2005 income from discontinued operations principally reflect 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. Fiscal 2004 income from discontinued operations principally reflected the earnings of Fluid Regulators and Esterline’s discontinued Automation segment. Including results from discontinued operations, net earnings in the third quarter of fiscal 2005 and fiscal 2004 were $14.2 million, or $.55 per diluted share, and $7.6 million, or $.36 per diluted share respectively.
Backlog at the end of the third quarter was $502.7 million compared with $324.2 million at the end of the prior-year period, and $423.8 million at the end of fiscal 2004.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are 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. 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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