Esterline Technologies: Investor Relations

BELLEVUE, Wash., September 5, 2002 - Esterline Technologies (NYSE/ESL www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported third quarter (ended July 26) income from continuing operations of $6.9 million, or $.33 per share, on sales of $112.4 million. This performance compared with the prior year period's income from continuing operations of $12.3 million, or $.58 per share, on sales of $111.9 million.
         Robert W. Cremin, Esterline CEO, said that "...although the current commercial aerospace down cycle continues to affect our gross margins, primarily due to lower sales of spare parts to airlines, overall performance is basically solid and in line with our expectations." Cremin reiterated the company's guidance for fiscal 2002 earnings per share from continuing operations of $1.30 to $1.40 adding "...in the current environment projections are especially difficult, but the potential for a 25% to 30% improvement is there for Esterline next year, with my best estimate at this point for fiscal 2003 earnings in the range of $1.60 to $1.70 per share."
        He said, "...we are making solid progress on our long-term strategic plan to build a company recognized for its ability to provide comprehensive engineered solutions to our customers' difficult-to-solve problems in the areas of illuminated cockpit displays, jet engine sensors and controls, and specialized high-performance materials."
        In implementing this strategy, the company completed several acquisitions during-and subsequent to-the quarter, adding approximately $90 million in annual aerospace/defense related revenues. The company also sharpened its aerospace/defense focus during the quarter by adopting a formal plan to sell its Automation segment, which serves printed circuit board manufacturers and makers of heavy equipment.
        Year-to-date income from continuing operations was $20.8 million, or $1.00 per share, before the cumulative effect of a change in accounting principle recorded in the first quarter; sales were $309.9 million. This performance compared with the prior year period's income from continuing operations of $32.0 million, or $1.62 per share, on sales of $317.6 million. Backlog at the end of the period was $251.4 million compared with $242.5 million a year ago.
        As a result of the previously announced decision to sell the Automation businesses, the attached consolidated financial statements present the Automation segment as a discontinued operation. The company recorded an after-tax loss from discontinued operations for the three months ended July 26, 2002, of $17.5 million, including $5.7 million of quarterly operating losses, $6.5 million to reduce the net assets of the subsidiaries to net realizable value and $5.3 million for losses expected to be incurred until disposal. The loss from discontinued operations aggregated $22.1 million for the nine months ended July 26, 2002, including the $11.8 million after-tax charge and $10.3 million in year-to-date operating losses of the discontinued operations.
        At the beginning of fiscal year 2002, Esterline adopted Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," (FAS 142). Results for the first quarter included a charge for the cumulative effect of a change in accounting principle in the amount of $7.6 million, net of tax, to reflect the impairment of goodwill attributable to a reporting unit in the company's Aerospace segment upon adoption of FAS 142.
        Including the loss from discontinuance and the charge for the cumulative effect of the change in accounting principal described above, the company reported a net loss of $10.6 million and $8.9 million for the three and nine months ended July 26, 2002, respectively. This performance compared with the prior year period's income for the three and nine months ended July 27, 2001 of $9.2 million and $25.1 million, respectively.

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, 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 changes in aerospace/defense industry demand or because of current uncertainties associated with telecommunications and computer markets and other risks detailed in the company's public filings with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the year ended October 25, 2002.



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