(Source: MARKETWIRE)
Esterline Corporation (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2009 third quarter (ended July 31) income from continuing operations of $32.5 million, or $1.09 per diluted share, on sales of $361.5 million. Earnings include a tax benefit of approximately $.10 per share. Year-ago income from continuing operations was $18.4 million, or $.61 per diluted share, on sales of $363.5 million.
Robert W. Cremin, Esterline CEO, said, "...Esterline posted a very solid quarter, keeping us on pace with our full-year guidance despite continued uncertainty in the commercial airline industry." Esterline's full-year earnings guidance now stands at $3.10 to $3.30 per share, reflecting the third quarter tax benefit.
Cremin said, "...we feel good going into our fourth quarter, though our guidance range reflects some caution." He said commercial aviation spares sales appear to have bottomed as customers work to balance inventory levels, but he noted that "...these sales can be difficult to forecast accurately due to short lead times." The extent of the business jet market decline also continues to affect the performance of certain operations, especially in the company's Sensors & Systems segment.
Cremin reiterated comments he made last quarter regarding the timing of military countermeasure flares shipments. He said, "...the scarcity of specialized ships for transporting foreign orders of these products continues to be an issue. We know the orders will ship; we just aren't certain at this point if they'll ship in fiscal 2009 or push into 2010."
Gross margin improved in the quarter as a percentage of sales to 32.4%, compared to 31.2% in the same period a year ago. Cremin said the margin increase was due "...primarily to improved performance in our Avionics & Controls segment."
He said, "...we continue to focus on operational excellence -- making appropriate adjustments to individual business circumstances." He noted that the company has continued to tighten SG&A (selling, general and administrative) expenses. He also said that R&D spending "...is coming down to our more normalized level of 4.5%, following the ramp-up over the last several years to win positions on significant new programs, such as the JSF, 787 and T-6B."
"Investing in the future remains a cornerstone of our strategy," he said, adding that Esterline "...recently stepped up to partner with Rolls-Royce to develop the sensors for its new Trent XWB engine for the Airbus A350." He said, "...we're also in the midst of several important plant expansions to prepare for the growth we anticipate as new programs come on-line and economic conditions improve."
The effective income tax rate for the third quarter of 2009 was 8.5% including a reversal of prior expenses related to the application of certain foreign tax laws, and a tax benefit associated with the reconciliation of the prior year's tax returns. The tax rate excluding these two events was 17.5%. Last year's effective income tax rate was 25.3%.
Income from discontinued operations in the third quarter of 2009 was less than $.01 per diluted share, compared with $.07 per diluted share in the prior-year period. Net income was $32.6 million, or $1.09 per diluted share, compared with $20.5 million, or $.68 per diluted share, in the prior-year period.
For the first nine months of fiscal 2009, Esterline reported net earnings from continuing operations of $69.3 million, or $2.32 per diluted share, on sales of $1.03 billion. This compared with net earnings from continuing operations of $72.1 million, or $2.41 per diluted share, on $1.08 billion in sales for the same period in 2008. Income from discontinued operations in the first nine months of 2009 was $.54 per diluted share, compared with $.15 per diluted share in the prior-year period. Net income was $85.3 million, or $2.86 per diluted share, compared with $76.7 million, or $2.56 per diluted share, in the prior-year period.
New orders for the first nine months of 2009 were $1.01 billion compared with $1.15 billion for the same period in 2008. Backlog was $1.07 billion compared with $1.02 billion at the end of the prior-year period and $1.1 billion at the end of fiscal 2008.
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 including its most recent Annual Report on Form 10-K.
ESTERLINE TECHNOLOGIES CORPORATION Consolidated Statement of Operations (unaudited) In thousands, except per share amounts Three months ended Nine months ended July 31, August 1, July 31, August 1, 2009 2008 2009 2008 ---------- ---------- ---------- ---------- Segment Sales Avionics & Controls $ 171,027 $ 147,926 $ 468,606 $ 438,008 Sensors & Systems 84,460 103,320 255,770 294,193 Advanced Materials 105,999 112,218 306,329 346,621 ---------- ---------- ---------- ---------- Net Sales 361,486 363,464 1,030,705 1,078,822 Cost of Sales 244,339 250,106 698,808 728,864 ---------- ---------- ---------- ---------- 117,147 113,358 331,897 349,958 Expenses Selling, general and administrative 59,694 60,957 174,038 178,082 Research, development and engineering 14,868 21,460 50,560 68,138 ---------- ---------- ---------- ---------- Total Expenses 74,562 82,417 224,598 246,220 Other Other expense 218 -- 7,946 86 ---------- ---------- ---------- ---------- Total Other 218 -- 7,946 86 ---------- ---------- ---------- ---------- Operating Earnings From Continuing Operations 42,367 30,941 99,353 103,652 Interest income (168) (1,066) (949) (3,297) Interest expense 7,024 7,339 21,370 22,517 Gain on derivative financial instruments -- -- -- (1,850) ---------- ---------- ---------- ---------- Other Expense, Net 6,856 6,273 20,421 17,370 ---------- ---------- ---------- ---------- Income From Continuing Operations Before Income Taxes 35,511 24,668 78,932 86,282 Income Tax Expense 3,009 6,232 9,493 13,981 ---------- ---------- ---------- ---------- Income From Continuing Operations Before Minority Interest 32,502 18,436 69,439 72,301 Minority Interest (24) (36) (136) (229) ---------- ---------- ---------- ---------- Income From Continuing Operations 32,478 18,400 69,303 72,072 Income From Discontinued Operations, Net of Tax 163 2,082 15,994 4,579 ---------- ---------- ---------- ---------- Net Earnings $ 32,641 $ 20,482 $ 85,297 $ 76,651 ========== ========== ========== ========== Earnings Per Share - Basic: Continuing Operations $ 1.09 $ .62 $ 2.33 $ 2.45 Discontinued Operations .01 .07 .54 .15 ---------- ---------- ---------- ---------- Earnings Per Share - Basic $ 1.10 $ .69 $ 2.87 $ 2.60 ========== ========== ========== ========== Earnings Per Share - Diluted: Continuing Operations $ 1.09 $ .61 $ 2.32 $ 2.41 Discontinued Operations .00 .07 .54 .15 ---------- ---------- ---------- ---------- Earnings Per Share - Diluted $ 1.09 $ .68 $ 2.86 $ 2.56 ========== ========== ========== ========== Weighted Average Number of Shares Outstanding - Basic 29,736 29,575 29,701 29,466 Weighted Average Number of Shares Outstanding - Diluted 29,870 29,994 29,855 29,894 Consolidated Balance Sheet (unaudited) In thousands July 31, August 1, 2009 2008 ---------- ---------- Assets Current Assets Cash and cash equivalents $ 148,807 $ 162,552 Accounts receivable, net 248,476 249,083 Inventories 296,398 298,461 Income tax refundable 9,453 6,495 Deferred income tax benefits 28,636 31,907 Prepaid expenses 17,013 15,774 Other current assets 19,240 -- ---------- ---------- Total Current Assets 768,023 764,272 Property, Plant and Equipment, Net 243,955 215,909 Other Non-Current Assets Goodwill 743,864 651,381 Intangibles, net 435,433 339,146 Debt issuance costs, net 7,612 7,957 Deferred income tax benefits 65,518 46,041 Other assets 8,541 25,715 ---------- ---------- $2,272,946 $2,050,421 ========== ========== Liabilities and Shareholders' Equity Current Liabilities Accounts payable $ 70,754 $ 88,763 Accrued liabilities 211,208 181,583 Credit facilities 3,798 8,550 Current maturities of long-term debt 798 8,649 Federal and foreign income taxes 4,372 14,173 ---------- ---------- Total Current Liabilities 290,930 301,718 Long-Term Liabilities Long-term debt, net of current maturities 509,776 390,221 Deferred income taxes liabilities 129,006 118,307 Other liabilities 98,557 54,051 Commitments and Contingencies -- -- Minority Interest 2,933 2,643 Shareholders' Equity 1,241,744 1,183,481 ---------- ---------- $2,272,946 $2,050,421 ========== ==========
SOURCE: Esterline Technologies
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