Message #8 From:
NewsBot Date: August 31, 2006 01:05:00 PM
ESL News Esterline Reports 3Q Earnings Per Share of $.43 -- in Line with Recent Guidance; Net Income $11.2 Million, on $248.4 Million Sales
BELLEVUE, Wash.--(BUSINESS WIRE)--Aug. 31, 2006--Esterline Corporation (NYSE:ESL)(www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2006 third quarter (ended July 28) net income of $11.2 million, or $.43 per diluted share, on $248.4 million sales. Net income in the same period last year was $11.9 million, or $.46 per diluted share, on sales of $209.9 million.
Robert W. Cremin, Esterline CEO said, "...the results for the quarter are in line with our recent guidance." That guidance included the impact of a shutdown of a recently acquired military countermeasure flares operation in the UK following an accident there during the quarter. Cremin said that the majority of that operation's production volume is coming back on line in the portion of the facility less affected by the explosion. He added, however, that "...the newer, more profitable facility is still closed and will remain so until the formal investigation concludes sometime in 2007."
Cremin stressed that Esterline's underlying fundamentals remain solid. New order intake during the quarter continued strong at $250.6 million, and backlog was $635.6 million -- over 25% higher than last year. He also emphasized that "...Esterline continues to invest in the research, development and engineering necessary to ensure the long-term health of the company." He noted that R&D expenditures during the quarter were nearly 32% ahead of last year. "The majority of the R&D increase is in our Sensors & Systems segment where we are in the midst of two major development programs for the Airbus A400M military transport," he said. "We expect investment in this program to remain at current levels for the next several quarters before tapering off to our more historical levels."
In addition, Cremin said that "...as we go into this major aerospace cycle ramp-up, our Sensors & Systems segment has been particularly impacted by stresses in the supply chain." He said, "...over the last few quarters we've been hiring and training new people and generally running to keep up with accelerating business."
The effective tax rate for the third quarter of 2006 was 29.8%, before a $1.6 million reduction in previously estimated tax liabilities. The effective tax rate for the same period a year ago was 28.8% before a $2.0 million reduction in previously estimated tax liabilities.
Year-to-date income from continuing operations was $37.2 million, or $1.44 per diluted share, on sales of $702.0 million. For the first nine months of fiscal 2005, comparable earnings were $35.7 million, or $1.42 per diluted share, on sales of $611.3 million.
Net earnings in the fiscal 2006 third quarter and first nine months were unaffected by discontinued operations. Net earnings for the first nine months of 2005 included income from discontinued operations principally from the sale of the company's Fluid Regulators subsidiary. That sale resulted in a gain of approximately $7.0 million, net of tax of $2.4 million, or $.27 per diluted share, in the first quarter of 2005. Net earnings for the fiscal third quarter and first nine months of 2005 were $11.9 million, or $.46 per diluted share, and $42.6 million, or $1.69 per diluted share, respectively.
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.
ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
------------------------------------
(In thousands, except per share amounts)
Three Months Ended Nine Months Ended
July 28, July 29, July 28, July 29,
2006 2005 2006 2005
Segment Sales -------- -------- -------- --------
Avionics & Controls $ 71,191 $ 66,990 $205,497 $192,835
Sensors & Systems 84,672 80,953 241,319 239,868
Advanced Materials 92,535 61,930 255,186 178,554
-------- -------- -------- --------
Net Sales 248,398 209,873 702,002 611,257
Cost of Sales 173,041 144,180 483,047 418,926
-------- -------- -------- --------
75,357 65,693 218,955 192,331
Expenses
Selling, general and
administrative 41,560 36,927 118,423 103,372
Research, development and
engineering 14,480 11,003 37,752 30,116
-------- -------- -------- --------
Total Expenses 56,040 47,930 156,175 133,488
-------- -------- -------- --------
Operating Earnings From
Continuing Operations 19,317 17,763 62,780 58,843
Other (income) expense 17 272 (445) 338
Interest income (393) (1,187) (2,250) (2,747)
Interest expense 5,586 4,654 15,881 13,433
Loss on extinguishment of
debt -- -- 2,156 --
-------- -------- -------- --------
Other Expense, Net 5,210 3,739 15,342 11,024
-------- -------- -------- --------
Income From Continuing
Operations Before Income Taxes 14,107 14,024 47,438 47,819
Income Tax Expense 2,576 2,043 9,439 11,981
-------- -------- -------- --------
Income From Continuing
Operations Before Minority
Interest 11,531 11,981 37,999 35,838
Minority Interest (308) (122) (753) (170)
-------- -------- -------- --------
Income From Continuing
Operations 11,223 11,859 37,246 35,668
Income From Discontinued
Operations, Net of Tax -- 3 -- 6,968
-------- -------- -------- --------
Net Earnings $ 11,223 $ 11,862 $ 37,246 $ 42,636
======== ======== ======== ========
Earnings Per Share -- Basic:
Continuing operations $ .44 $ .47 $ 1.47 $ 1.44
Discontinued operations -- -- -- .28
-------- -------- -------- --------
Earnings Per Share -- Basic $ .44 $ .47 $ 1.47 $ 1.72
======== ======== ======== ========
Earnings Per Share -- Diluted:
Continuing operations $ .43 $ .46 $ 1.44 $ 1.42
Discontinued operations -- -- -- .27
-------- -------- -------- --------
Earnings Per Share -- Diluted $ .43 $ .46 $ 1.44 $ 1.69
======== ======== ======== ========
Weighted Average Number of
Shares Outstanding -- Basic 25,448 25,237 25,390 24,797
Weighted Average Number of
Shares Outstanding -- Diluted 25,867 25,619 25,809 25,175
Consolidated Balance Sheet
--------------------------
(In thousands)
July 28, July 29,
2006 2005
---------- ----------
Assets
Current Assets
Cash and cash equivalents $ 38,642 $ 80,339
Cash in escrow 4,345 11,744
Short-term investments -- 75,205
Accounts receivable, net 167,766 134,861
Inventories 185,150 136,151
Income tax refundable 3,291 --
Deferred income tax benefits 27,275 25,952
Prepaid expenses 8,205 6,981
Other current assets -- 288
---------- ----------
Total Current Assets 434,674 471,521
Property, Plant and Equipment, Net 170,641 136,359
Other Non-Current Assets
Goodwill 361,968 260,396
Intangibles, net 244,265 169,252
Debt issuance costs, net 4,638 5,312
Deferred income tax benefits 17,766 11,897
Other assets 25,691 25,284
---------- ----------
$1,259,643 $1,080,021
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable $ 68,569 $ 42,007
Accrued liabilities 108,031 101,148
Credit facilities 5,181 2,301
Current maturities of long-term debt 4,099 30,913
Federal and foreign income taxes 2,861 4,269
---------- ----------
Total Current Liabilities 188,741 180,638
Long-Term Liabilities
Long-term debt, net of current maturities 280,775 217,207
Deferred income taxes 73,748 45,936
Other liabilities 30,374 27,764
Minority Interest 3,466 2,548
Total Shareholders' Equity 682,539 605,928
---------- ----------
$1,259,643 $1,080,021
========== ==========
