EXHIBIT 99.1
Esterline Reports 1Q Earnings of $12.8 Million, or $.49 Per Share,
on $257.2 Million Sales
BELLEVUE, Wash.--(BUSINESS WIRE)--March 5, 2007--Esterline
Technologies (NYSE:ESL) (www.esterline.com), a leading specialty
manufacturer serving aerospace/defense markets, today reported fiscal
2007 first quarter (ended January 26) net earnings of $12.8 million,
or $.49 per diluted share. This includes a $2.1 million tax benefit
resulting from the retroactive extension of U.S. Research and
Experimentation tax credits signed into law on December 21, 2006.
Year-ago net earnings were $8.4 million, or $.32 per diluted share.
First quarter 2007 sales were $257.2 million compared with $205.7
million a year ago.
Robert W. Cremin, Esterline CEO, said that the performance
reflected in a 38% year-over-year increase in pretax earnings was
"...essentially in line with company expectations," and that
Esterline's "...growth prospects for the year remain on track."
On February 1, 2007, Esterline announced an agreement to acquire
CMC Electronics, a Canadian designer/manufacturer of high-technology
electronics products for aerospace/defense applications, including
global positioning, enhanced vision and flight management systems.
Cremin said that he expects the transaction to close in the first part
of March, pending certain governmental approvals. He said the
acquisition of CMC is a natural evolution for Esterline that will
"...significantly expand our avionics capability and better enable us
to respond to our customers' higher technology demands."
Cremin said that CMC's anticipated contributions to Esterline
earnings in the remainder of the fiscal year would be influenced by
the timing of the transaction's completion and the effect of purchase
accounting rules. In this context, and including the previously
reported tax benefits, the company is maintaining its full-year
earnings guidance range of $2.45 to $2.60 per share.
Consolidated gross margin in the quarter was 29% compared with
30.6% a year ago. Several events effected this change, including
quality issues caused by vendor supplied materials at a California
plant, and a contract overrun at a Illinois unit that manufactures
data concentrators -- both operations are within Esterline's Sensors &
Systems business segment. In the company's Advanced Materials segment,
a continued shut-down of part of the company's UK countermeasure
flares facility following a June 2006 explosion also impacted margins.
Selling, general and administrative expenses (SG&A) totaled
$42.4 million in the first quarter of 2007, compared with
$35.9 million a year ago, primarily due to incremental SG&A expenses
from acquisitions. As a percent of sales, SG&A declined a full
percentage point to 16.5% in the first quarter of 2007 compared with
17.5% in the prior-year period.
Research, development and engineering (RD&E) expense during the
quarter was $13.6 million, or 5.3% of sales, compared with $10.3
million, or 5.0% of sales in the year-ago quarter. RD&E spending is
expected to return to more historical levels during the second half of
fiscal 2007.
Backlog at the end of the first quarter was $656.5 million
compared with $546.2 million at the end of the prior-year period, and
$653.5 million at the end of fiscal 2006.
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 Consolidated Statement of Operations and Consolidated
Balance Sheet
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
- -------------------------------------------------
In thousands, except per share amounts
Three months ended
Jan 26, Jan 27,
2007 2006
Segment Sales
Avionics & Controls $ 75,505 $ 62,442
Sensors & Systems 86,191 73,470
Advanced Materials 95,548 69,753
-------- --------
Net Sales 257,244 205,665
Cost of Sales 182,675 142,806
-------- --------
74,569 62,859
Expenses
Selling, general and administrative 42,375 35,890
Research, development and engineering 13,551 10,333
-------- --------
Total Expenses 55,926 46,223
Other
Other income (10) (199)
Insurance recovery (1,647) --
-------- --------
Total Other (1,657) (199)
-------- --------
Operating Earnings 20,300 16,835
Interest income (504) (859)
Interest expense 5,524 4,505
Loss on extinguishment of debt -- 2,156
-------- --------
Other Expense, Net 5,020 5,802
-------- --------
Income Before Income Taxes 15,280 11,033
Income Tax Expense 2,385 2,556
-------- --------
Income Before Minority Interest 12,895 8,477
Minority Interest (94) (113)
-------- --------
Net Earnings $ 12,801 $ 8,364
======== ========
Earnings Per Share:
Basic $ .50 $ .33
Diluted $ .49 $ .32
Consolidated Balance Sheet
- ---------------------------------------------
In thousands Jan 26, Jan 27,
2007 2006
Assets
Current Assets
Cash and cash equivalents $ 48,264 $ 61,634
Cash in escrow 4,460 12,017
Accounts receivable, net 174,139 149,596
Inventories 190,172 148,199
Income tax refundable 8,550 --
Deferred income tax benefits 29,984 25,464
Prepaid expenses 12,146 8,966
---------- ----------
Total Current Assets 467,715 405,876
Property, Plant and Equipment, Net 171,651 148,815
Other Non-Current Assets
Goodwill 370,755 324,452
Intangibles, net 243,315 222,923
Debt issuance costs, net 4,300 4,975
Deferred income tax benefits 14,790 14,027
Other assets 27,119 24,904
---------- ----------
$1,299,645 $1,145,972
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 56,574 $ 46,021
Accrued liabilities 102,810 100,057
Credit facilities 8,011 83,868
Current maturities of long-term debt 7,282 2,007
Federal and foreign income taxes 3,716 7,872
---------- ----------
Total Current Liabilities 178,393 239,825
Long-Term Liabilities
Long-term debt, net of current maturities 283,320 178,638
Deferred income taxes 74,231 65,281
Other liabilities 24,462 27,799
Minority Interest 3,318 2,826
Shareholders' Equity 735,921 631,603
---------- ----------
$1,299,645 $1,145,972
========== ==========
CONTACT: Esterline Technologies
Brian Keogh, 425-453-9400