Exhibit 99.1
Esterline Reports 4Q Earnings of $15.2 Million, From Continuing OPS on Sales of
$194.8 Million; Earnings Per Share of $.70; Includes $.10 from Sale of Product
Line
BELLEVUE, Wash.--(BUSINESS WIRE)--Dec. 9, 2004--Esterline Corporation
(NYSE:ESL) (www.esterline.com), a leading specialty manufacturer serving
aerospace/defense markets, today reported fourth quarter income from continuing
operations of $15.2 million, or $.70 per diluted share, on sales of $194.8
million. The quarter's results included a $2.2 million net of tax, or $.10 per
share, gain on the sale of a non-core product line within the company's Sensors
& Systems segment. In the same period last year, income from continuing
operations was $9.4 million, or $.44 per diluted share, on $160.3 million sales.
Orders received in the fourth quarter totaled $296.7 million, including $89
million of backlog from an acquisition completed in the quarter. This compared
with orders of $140.0 million a year ago. Backlog at year end was $433.1 million
compared with $300.9 million at the end of the prior-year period.
Full year 2004 income from continuing operations was $33.4 million, or
$1.55 per diluted share, including the one-time gain described above. Full-year
earnings also included a $.09 per diluted share tax benefit from a favorable
resolution of an income tax audit, and a $.14 per diluted share severance
expense, both reported in the first quarter. The prior year's income from
continuing operations was $29.7 million, or $1.41 per diluted share, including a
$.09 per diluted share foreign currency gain. Sales in fiscal 2004 were $628.2
million compared with last year's sales of $562.5 million.
Robert W. Cremin, Esterline CEO, said the company's fourth quarter
performance "...was robust and reflected good balance across all of the
company's markets and operating segments." He said "...the commercial aerospace
industry is now clearly coming off the bottom of its cycle, and defense markets
continue to look solid for us into the foreseeable future."
Looking forward, Cremin said that he is optimistic about the coming year,
anticipating earnings per share of $1.70 to $1.80. He said, "...even with the
additional shares from our recent equity offering, this is year-over-year EPS
growth in the 15% to 25% range on an operating basis."
He added "...that last year, we absorbed some significant costs associated
with the integration of several acquisitions -- activity that is now behind us.
The Weston acquisition, for example, is beginning to pay solid dividends, as
evidenced by the recent win on the TP400M engine program, the engine that will
power the new Airbus A400M military transport." Cremin added that, "...the
successful integration of Weston into our existing sensor operation enabled us
to win this Tier I contract for the entire sensor suite -- a first for
Esterline, and a win that would not have been possible without the acquisition."
Esterline recently completed a public offering of 3.7 million shares of its
common stock, generating net proceeds of approximately $109 million. Cremin said
that the funds provide the additional financial resources and flexibility to
grow, including continuing the company's acquisition activities.
During the quarter, Esterline completed a $145 million cash acquisition of
Leach Holding Corporation. Leach is a leading worldwide producer of
high-performance electromechanical relays, solid-state switching devices and
advanced power distribution assemblies primarily for aerospace applications. The
operation employs more than 1,000 people in North America, Europe and Asia.
Cremin said that unlike some recent acquisitions, "...we do not plan any
personnel or facility integration initiatives; Leach is already operating
smoothly as an integral part of Esterline."
During the quarter, the company completed the sale of the last operation
declared discontinued in 2002. Cremin characterized the transaction as an
important milestone for the company. "Going forward," he said, "we are now able
to focus all of our resources building on our core technologies." Including
income from discontinued operations of $9.2 million net of tax, fiscal 2004 net
earnings were $42.6 million, or $1.98 per diluted share. This compared with
$23.9 million, or $1.13 per diluted share, for fiscal 2003.
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.
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
- ------------------------------------
In thousands, except per share amounts
Three months ended Fiscal year ended
Oct 29, Oct 31, Oct 29, Oct 31,
2004 2003 2004 2003
-------- -------- -------- --------
Segment Sales
Avionics & Controls $ 62,185 $ 50,520 $209,498 $198,249
Sensors & Systems 68,836 44,511 194,803 146,976
Advanced Materials 63,605 65,130 223,344 216,655
Other 137 165 524 574
-------- -------- -------- --------
Net Sales 194,763 160,326 628,169 562,454
Cost of Sales 130,657 106,646 426,612 383,825
-------- -------- -------- --------
64,106 53,680 201,557 178,629
Expenses
Selling, general and
administrative 33,371 30,093 117,689 107,797
Research, development
and engineering 8,893 5,182 27,715 19,524
-------- -------- -------- --------
Total Expenses 42,264 35,275 145,404 127,321
-------- -------- -------- --------
Operating Earnings from
Continuing Operations 21,842 18,405 56,153 51,308
Interest income (917) (303) (1,964) (868)
Interest expense 4,472 4,607 17,339 11,995
Other income
(expense) 65 (62) (509) --
Loss (gain) on sale
of product line (3,434) -- (3,434) 66
Gain on derivative
financial instruments -- (54) -- (2,676)
-------- -------- -------- --------
Other Expense, Net 186 4,188 11,432 8,517
-------- -------- -------- --------
Income from Continuing
Operations Before
Income Taxes 21,656 14,217 44,721 42,791
Income Tax Expense 6,401 4,805 11,325 13,050
-------- -------- -------- --------
Income from Continuing
Operations Before
Minority Interest 15,255 9,412 33,396 29,741
Minority Interest (22) -- (22) --
-------- -------- -------- --------
Income from Continuing
Operations 15,233 9,412 33,374 29,741
Income (Loss) from
Discontinued
Operations,
Net of Tax 7,883 -- 9,181 (5,808)
-------- -------- -------- --------
Net Earnings $ 23,116 $ 9,412 $ 42,555 $ 23,933
======== ======== ======== ========
Earnings (Loss) Per
Share -- Basic:
Continuing operations $ .71 $ .45 $ 1.57 $ 1.42
Discontinued operations .37 -- .44 (.27)
-------- -------- -------- --------
Earnings Per Share --
Basic $ 1.08 $ .45 $ 2.01 $ 1.15
======== ======== ======== ========
Earnings (Loss) Per
Share -- Diluted:
Continuing operations $ .70 $ .44 $ 1.55 $ 1.41
Discontinued operations .37 -- .43 (.28)
-------- -------- -------- --------
Earnings Per Share --
Diluted $ 1.07 $ .44 $ 1.98 $ 1.13
======== ======== ======== ========
Weighted Average Number
of Shares Outstanding
-- Basic 21,310 21,035 21,195 20,900
Weighted Average Number
of Shares Outstanding
-- Diluted 21,692 21,248 21,539 21,105
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Balance Sheet
In thousands Oct 29, Oct 31,
2004 2003
-------- --------
Assets
Current Assets
Cash and cash equivalents $ 29,479 $131,363
Cash in escrow 8,511 4,536
Short-term investments -- 12,797
Accounts receivable, net 132,206 98,395
Inventories 119,054 76,345
Income tax refundable -- 7,677
Deferred income tax benefits 20,984 16,529
Prepaid expenses 9,441 7,030
Other current assets 435 --
-------- --------
Total Current Assets 320,110 354,672
Property, Plant and Equipment, Net 145,135 117,090
Other Non-Current Assets
Goodwill 247,817 185,353
Intangibles, net 169,876 114,930
Debt issuance costs, net 5,818 6,301
Deferred income tax benefits 11,216 --
Other assets 32,861 22,284
-------- --------
$932,833 $800,630
======== ========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 37,867 $ 23,273
Accrued liabilities 97,038 74,991
Credit facilities 6,977 2,312
Current maturities of long-term debt 1,031 30,473
Federal and foreign income taxes 6,402 1,184
-------- --------
Total Current Liabilities 149,315 132,233
Long-Term Liabilities
Long-term debt, net of current maturities 249,056 246,792
Deferred income taxes 43,825 27,325
Other Liabilities 29,852 --
Net Liabilities of Discontinued Operations -- 408
Minority Interest 2,378 --
Shareholders' Equity 458,407 393,872
-------- --------
$932,833 $800,630
======== ========
CONTACT: Esterline Corporation
Brian Keogh, 425-453-9400