Exhibit 99.1
------------
Esterline Reports 4Q Earnings of $18.4 Million, or $.71 from
Continuing Ops, on Sales of $270.3 Million
Full Year Earnings were $55.6 Million, or $2.15 on Sales of $972.3
Million
BELLEVUE, Wash.--(BUSINESS WIRE)--Dec. 7, 2006--Esterline
Corporation (NYSE:ESL)(www.esterline.com), a leading specialty
manufacturer serving aerospace/defense markets, today reported fourth
quarter income from continuing operations of $18.4 million, or $.71
per diluted share, on sales of $270.3 million. In the same period last
year, income from continuing operations was $15.4 million, or $.60 per
diluted share, on $224.1 million sales. Orders received in the fourth
quarter totaled $288.2 million. This compared with orders of $204.2
million a year ago. Backlog at year-end was $653.5 million compared
with $482.8 million at the end of the prior-year period.
Full year 2006 income from continuing operations was
$55.6 million, or $2.15 per diluted share. The prior year's income
from continuing operations was $51.0 million, or $2.02 per diluted
share. Including net income from discontinued operations of
$7.0 million, or $0.27 per diluted share, net earnings in fiscal 2005
were $58.0 million or $2.29 per diluted share. Sales in fiscal 2006
were $972.3 million compared with last year's sales of $835.4 million
in fiscal 2005.
Robert W. Cremin, Esterline CEO, said the company's fourth quarter
performance "...ended the year on a strong note." And he emphasized
that "...the 19% improvement in net income over last year's fourth
quarter performance included a significantly increased R&D investment
- -- $14.9 million compared with $12.1 million in the same quarter last
year." Cremin noted that the year wasn't without challenges, including
an explosion at a newly acquired UK business, a disappointing
performance in its Sensors & Systems segment and disruptions in
certain Chinese exports. "Despite these setbacks," Cremin said, "I
would still characterize Esterline's full-year performance as solid --
and particularly reflective of the company's good balance."
Regarding the explosion, Cremin said, "...production at Wallop's
north-side facility is now operating at pre-accident levels." He said
that although the new south facility is still closed, and will remain
so for at least another nine months, "...negotiations with our
insurance providers are going well." Related to the incident, the
company recorded a $4.9 million insurance recovery in the fourth
quarter.
He also said that plant productivity is back to normal levels at
the company's sensors operation.
Looking forward, Cremin said he anticipates a "...solid year ahead
for Esterline, supported by record backlogs, new products coming to
market, and R&D expenses moderating." Reflecting that confidence, the
company adjusted its FY07 EPS guidance range to $2.45 to $2.60 per
share, the mid-range of which represents a 17% increase over FY06.
Emphasizing Esterline's normal seasonality, Cremin noted that the
company's first quarter has the fewest working days due to the number
of holiday-related plant closures. He said that when considering
performance in FY07, investors should expect "...EPS in the first
couple of quarters to be very similar to their respective FY06
quarters, ramping up strongly in the second half as new programs begin
to kick in and R&D expense comes down."
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking
statements by terminology such as "anticipate," "believe," "continue,"
"could," "estimate," "expect," "intend," "may," "might," "plan,"
"potential," "predict," "should" or "will," or the negative of such
terms, or other comparable terminology. These forward-looking
statements are only predictions 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 and may cause Esterline's or its
industry's actual results, performance or achievements to be
materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements.
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.
EDITOR: See attached Consolidated Statement of Operations and
Consolidated Balance Sheet
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
- ------------------------------------
In thousands, except per share amounts
Three months ended Fiscal year ended
Oct 27, Oct 28, Oct 27, Oct 28,
2006 2005 2006 2005
---------- ---------- ----------- --------
Segment Sales
Avionics & Controls $ 77,514 $ 68,715 $ 283,011 $261,550
Sensors & Systems 91,938 79,671 333,257 319,539
Advanced Materials 100,821 75,760 356,007 254,314
---------- ---------- ----------- --------
Net Sales 270,273 224,146 972,275 835,403
Cost of Sales 188,372 154,527 671,419 573,453
---------- ---------- ----------- --------
81,901 69,619 300,856 261,950
Expenses
Selling, general and
administrative 41,201 34,054 159,624 137,426
Research, development
and engineering 14,860 12,122 52,612 42,238
---------- ---------- ----------- --------
Total Expenses 56,061 46,176 212,236 179,664
---------- ---------- ----------- --------
Other
Other (income)
expense (45) 176 (490) 514
Insurance recovery (4,890) -- (4,890) --
---------- ---------- ----------- --------
Total Other (4,935) 176 (5,380) 514
---------- ---------- ----------- --------
Operating Earnings from
Continuing Operations 30,775 23,267 94,000 81,772
Interest income (392) (1,310) (2,642) (4,057)
Interest expense 5,409 4,726 21,290 18,159
Loss on
extinguishment of
debt -- -- 2,156 --
---------- ---------- ----------- --------
Other Expense, Net 5,017 3,416 20,804 14,102
---------- ---------- ----------- --------
Income from Continuing
Operations
Before Income Taxes 25,758 19,851 73,196 67,670
Income Tax Expense 7,277 4,320 16,716 16,301
---------- ---------- ----------- --------
Income from Continuing
Operations
Before Minority
Interest 18,481 15,531 56,480 51,369
Minority Interest (112) (165) (865) (335)
---------- ---------- ----------- --------
Income from Continuing
Operations 18,369 15,366 55,615 51,034
Income from
Discontinued
Operations
Net of Tax -- 24 -- 6,992
---------- ---------- ----------- --------
Net Earnings $ 18,369 $ 15,390 $ 55,615 $ 58,026
========== ========== =========== ========
Earnings Per Share --
Basic:
Continuing operations $ .72 $ .61 $ 2.19 $ 2.05
Discontinued
operations -- -- -- .28
---------- ---------- ----------- --------
Earnings Per Share --
Basic $ .72 $ .61 $ 2.19 $ 2.33
========== ========== =========== ========
Earnings Per Share --
Diluted:
Continuing operations $ .71 $ .60 $ 2.15 $ 2.02
Discontinued
operations -- -- -- .27
---------- ---------- ----------- --------
Earnings Per Share --
Diluted $ .71 $ .60 $ 2.15 $ 2.29
========== ========== =========== ========
Weighted Average Number
of Shares Outstanding
-- Basic 25,482 25,316 25,413 24,927
Weighted Average Number
of Shares Outstanding
-- Diluted 25,845 25,685 25,818 25,302
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Balance Sheet
- --------------------------
In thousands
Oct 27, Oct 28,
2006 2005
---------- ----------
Assets
Current Assets
Cash and cash equivalents $ 42,638 $ 118,304
Cash in escrow 4,409 11,918
Short-term investments -- 62,656
Accounts receivable, net 191,737 149,751
Inventories 185,846 130,469
Income tax refundable 6,231 --
Deferred income tax benefits 27,932 26,868
Prepaid expenses 9,545 7,533
---------- ----------
Total Current Assets 468,338 507,499
Property, Plant and Equipment, Net 170,442 138,214
Other Non-Current Assets
Goodwill 366,155 261,167
Intangibles, net 241,657 166,118
Debt issuance costs, net 4,469 5,144
Deferred income tax benefits 14,790 13,320
Other assets 24,600 23,786
---------- ----------
$1,290,451 $1,115,248
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 62,693 $ 41,453
Accrued liabilities 121,419 119,115
Credit facilities 8,075 2,031
Current maturities of long-term debt 5,538 70,934
Federal and foreign income taxes 2,874 8,798
---------- ----------
Total Current Liabilities 200,599 242,331
Long-Term Liabilities
Long-term debt, net of current maturities 282,307 175,682
Deferred income taxes 72,349 46,421
Other Liabilities 23,629 27,237
Minority Interest 3,578 2,713
Shareholders' Equity 707,989 620,864
---------- ----------
$1,290,451 $1,115,248
========== ==========
CONTACT: Esterline Corporation
Brian Keogh, 425-453-9400