Exhibit 99.1
Esterline Reports Fourth Quarter EPS of $.44;
Earnings of $9.4 Million on $160.3 Million Sales
BELLEVUE, Wash.--(BUSINESS WIRE)--Dec. 4, 2003--
Solid Sales to Defense and Other Specialty Markets
Help Outpace Earlier Forecast
Esterline Technologies (NYSE:ESL)(www.esterline.com), a leading
specialty manufacturer serving aerospace/defense markets, today
reported strong fourth quarter performance, exceeding forecasted
results for the quarter and fiscal year ended October 31. Fourth
quarter income from continuing operations was $9.4 million, or $.44
per diluted share, on sales of $160.3 million. In the same period last
year, income from continuing operations was $10.5 million, or $.50 per
diluted share including $.14 per share from the favorable resolution
of income tax audits, on sales of $124.9 million. Net income for the
fourth quarter was $9.4 million, or $.44 per diluted share, compared
with $7.6 million, or $.36 per share.
Full year 2003 income from continuing operations was $29.7
million, or $1.41 per diluted share, including a third quarter foreign
currency gain of approximately $1.9 million net of tax, or $.09 per
share. The prior year's income from continuing operations was $31.3
million, or $1.49 per diluted share, including the favorable tax
resolution of tax audits. Fiscal 2003 sales were $562.5 million
compared with last year's sales of $434.8 million.
Robert W. Cremin, Esterline CEO, noted that the company continues
to perform well despite commercial aerospace market conditions that
remain sluggish. Cremin said that the company is focused on
consolidating recent acquisitions -- transactions that added about $90
million in incremental sales during the year. "As consolidation
progresses, combined with slowly improving market conditions, we
expect to begin to see steady performance improvement." And he
emphasized that even without acquisitions, "...the performance was
solid, with organic growth of roughly 10%."
He attributed this performance principally to improved sales
volumes of technology interface systems, including specialized
switches, displays and controls for aircraft and land-based military
vehicles and high-end medical equipment, as well as increased
shipments of combustible ordnance components.
Cremin said he was encouraged by the results, including two
consecutive quarters of improving margins. He remained cautious about
the near-term, however, reminding shareholders that Esterline's first
quarter results are typically weaker than other quarters due to
holiday plant closures and customer buying patterns. In addition, he
said the company anticipates "...a one-time charge of about $.10 per
share in the first half for severance expense related to the merger of
recently acquired Weston Aerospace and our Auxitrol operation."
He added though, that commercial aerospace "...appears to be at
the bottom of the cycle, and we expect defense markets to remain
strong and key industrial business to improve." He said that "...all
in all, a reasonable earnings expectation for fiscal 2004 would be in
the "...$1.50 to $1.60 range."
Including charges for discontinued operations of $5.8 million net
of tax, fiscal 2003 net earnings were $23.9 million, or $1.13 per
diluted share. This compared with a loss of $1.3 million, or ($.06)
per diluted share, for fiscal 2002, including a loss from discontinued
operations of $25.0 million, or ($1.19) per diluted share, and a $7.6
million charge, or ($.36) per diluted share, for the cumulative effect
of an accounting change as a result of the adoption of Financial
Accounting Standards No. 142, "Goodwill and Other Intangible Assets."
Orders received in the fourth quarter totaled $140.0 million
compared with $155.2 million a year ago. Backlog at October 31, 2003,
was $300.9 million compared with $281.7 million at the end of the
prior-year period.
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 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.
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
In thousands, except per share amounts
Three months ended Fiscal year ended
Oct 31, Oct 25, Oct 31, Oct 25,
2003 2002 2003 2002
-------- -------- --------- ---------
Segment Sales
Avionics & Controls $ 50,520 $ 46,701 $ 198,249 $ 171,709
Sensors & Systems 44,511 28,626 146,976 104,942
Advanced Materials 65,130 49,330 216,655 157,384
Other 165 230 574 774
--------- --------- ---------- ----------
Net Sales 160,326 124,887 562,454 434,809
Cost of Sales 106,646 84,448 383,825 293,236
--------- --------- ---------- ----------
53,680 40,439 178,629 141,573
Expenses
Selling, general and
administrative 30,093 23,536 107,797 79,086
Research, development and
engineering 5,182 4,713 19,524 15,433
--------- --------- ---------- ----------
Total Expenses 35,275 28,249 127,321 94,519
--------- --------- ---------- ----------
Operating Earnings from
Continuing Operations 18,405 12,190 51,308 47,054
Interest income (303) (446) (868) (1,814)
Interest expense 4,607 1,716 11,995 7,122
Other income (62) -- -- --
Loss on sale of business -- -- 66 --
Loss (gain) on derivative
financial instruments (54) -- (2,676) 1
--------- --------- ---------- ----------
Other Expense, Net 4,188 1,270 8,517 5,309
--------- --------- ---------- ----------
Income from Continuing
Operations Before Income
Taxes 14,217 10,920 42,791 41,745
Income Tax Expense 4,805 415 13,050 10,461
--------- --------- ---------- ----------
Income from Continuing
Operations 9,412 10,505 29,741 31,284
Loss from Discontinued
Operations, Net of Tax -- (2,925) (5,808) (25,039)
--------- --------- ---------- ----------
Earnings Before Cumulative
Effect of Change in
Accounting 9,412 7,580 23,933 6,245
Cumulative Effect of Change
in Accounting, Net of Tax -- -- -- (7,574)
--------- --------- ---------- ----------
Net Earnings (Loss) $ 9,412 $ 7,580 $ 23,933 $ (1,329)
========= ========= ========== ==========
Earnings (Loss) Per Share--
Basic:
Continuing operations $ .45 $ .51 $ 1.42 $ 1.51
Discontinued operations -- (.14) (.27) (1.21)
--------- --------- ---------- ----------
Earnings per share before
cumulative effect of
change in accounting .45 .37 1.15 .30
Cumulative effect of
change in accounting -- -- -- (.37)
--------- --------- ---------- ----------
Earnings (Loss) Per Share--
Basic $ .45 $ .37 $ 1.15 $ (.07)
========= ========= ========== ==========
Earnings (Loss) Per Share--
Diluted:
Continuing operations $ .44 $ .50 $ 1.41 $ 1.49
Discontinued operations -- (.14) (.28) (1.19)
--------- --------- ---------- ----------
Earnings per share before
cumulative effect of
change in accounting .44 .36 1.13 .30
Cumulative effect of
change in accounting -- -- -- (.36)
--------- --------- ---------- ----------
Earnings (Loss) Per Share--
Diluted $ .44 $ .36 $ 1.13 $ (.06)
========= ========= ========== ==========
Weighted Average Number
of Shares Outstanding --
Basic 21,035 20,776 20,900 20,751
Weighted Average Number
of Shares Outstanding --
Diluted 21,248 21,017 21,105 21,021
Consolidated Balance Sheet
In thousands Oct 31, Oct 25,
2003 2002
-------- --------
Assets
Current Assets
Cash and cash equivalents $131,363 $ 22,511
Cash in escrow 4,536 3,500
Short-term investments 12,797 --
Accounts receivable, net 98,395 79,474
Inventories 76,345 71,305
Income tax refundable 7,677 6,180
Deferred income tax benefits 16,529 25,069
Prepaid expenses 7,030 6,193
--------- ---------
Total Current Assets 354,672 214,232
Property, Plant and Equipment, Net 117,090 100,994
Net Assets of Discontinued Operations -- 13,576
Other Non-Current Assets
Goodwill, net 185,353 158,006
Intangibles, net 114,930 61,497
Debt issuance costs, net 6,301 --
Other assets 22,284 22,650
--------- ---------
$800,630 $570,955
========= =========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 23,273 $ 28,018
Accrued liabilities 74,991 64,026
Credit facilities 2,312 424
Current maturities of long-term debt 30,473 435
Federal and foreign income taxes 1,184 92
--------- ---------
Total Current Liabilities 132,233 92,995
Long-Term Liabilities
Long-term debt, net of current maturities 246,792 102,133
Deferred income taxes 27,325 21,386
Net Liabilities of Discontinued Operations 408 --
Shareholders' Equity 393,872 354,441
--------- ---------
$800,630 $570,955
========= =========
CONTACT: Esterline Corporation
Brian Keogh, 425/453-9400