Net Earnings $17.2 Million, or $.70 per Share, Including Discontinued Operations
BELLEVUE, Wash., Feb. 24, 2005 — Esterline Technologies ( NYSE/ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2005 first quarter (ended January 28) income from continuing operations of $9.8 million, or $.40 per diluted share, on $190.2 million sales. These results do not include $7.4 million, or $.30 per share, from the gain on the sale of the company’s Fluid Regulators subsidiary, accounted for as a discontinued operation. Including this divestiture, net earnings were $17.2 million, or $.70 per diluted share. Year-ago income from continuing operations was $1.6 million, or $.08 per share, on sales of $129.5 million. The prior year’s comparable net earnings were $1.9 million, or $.09 per diluted share.
Robert W. Cremin , Esterline CEO said, “…we’re off to a good start to our fiscal ’05. This was a very solid quarter, and we’re encouraged by the results across the full range of our business.” Cremin said, “…all of our markets look solid; the integration of our most recent acquisition (Leach International) is going very smoothly; and we’re now clearly seeing the leverage gained from earlier acquisitions .”
Leach, which was acquired on August 27, 2004, is “…already contributing solidly to the bottom line, though first quarter results were still affected somewhat by purchase accounting rules,” Cremin said. “We expect to see continuing improvement from this new operation as we go forward.”
Commenting on the divestiture, Cremin said, “…we were approached with a very attractive offer by a particularly well-suited owner. He said another factor influencing Esterline’s decision to sell was the acquisition of Weston Aerospace in 2003. “With that acquisition, we gained a much more solid U.S. base of operations for our Europe-based sensors business.”
Subsequent to quarter end, Esterline confirmed a U.S. Army multi-year contract to supply the U.S. Air Force with expendable decoy countermeasure flares. The first-year base award is for $21 million; the contract could potentially total $127 million over five years with options awards. Cremin said, “…we will now provide the major portion of the Air Force requirement, a significant step up from our previous participation on this program.”
Backlog at the end of the first quarter was $438.2 million compared with $315.8 million at the end of the prior-year period, and $424.5 million at the end of fiscal 2004.
R&D spending rose $3.8 million, totaling $9.2 million, or 4.9% of sales, for the first fiscal quarter of 2005 compared with $5.4 million, or 4.2% of sales, for the first fiscal quarter of 2004. The increase principally reflects the Leach acquisition and the funding of development for our recent wins on new programs for our customers.
The effective tax rate for the first fiscal quarter of 2005 was 27.8% compared with 32.5% a year ago. The first quarter 2004 rate was before a $1.8 million reduction of previously estimated tax liabilities.
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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