Welcome!

.NET Authors: ChandraShekar Dattatreya, Trevor Parsons, Peter Silva, Yeshim Deniz, Pat Romanski

News Feed Item

Esterline Reports Fourth Quarter and Full Fiscal Year Results; Q4 Net Earnings of $61.7 Million, or $1.97 per Share; $531 Million Sales

Company Issues Full-Year 2013 Guidance of $5.45 to $5.80 per Diluted Share

BELLEVUE, WA -- (Marketwire) -- 12/06/12 -- Esterline Corporation (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving the global aerospace and defense markets, today reported fiscal 2012 fourth quarter (ended October 26) income from continuing operations of $61.7 million, or $1.97 per diluted share, on sales of $530.7 million.

Brad Lawrence, Esterline's Chief Executive Officer, said, "Esterline ended the year on a strong note. Even without the benefit of several discrete items, our core underlying business was strong in the quarter." The quarter's performance included the items detailed in Table 1 below.


Table 1: Effects of Discrete Items on 4th Quarter 2012 EPS
(Estimated tax rate 20%; 31.3 million shares)

Earnings Per Share - GAAP                             $ 1.97
============================================================

Foreign Exchange Benefit - Avionics & Controls          0.02
Change Orders; R&D Tax Credits                          0.02
Income Tax Benefit                                      0.04
Urgent Customer Requirements                            0.12
------------------------------------------------------------
Total Discrete Items                                  $ 0.20
============================================================

Lawrence reiterated that the business challenge in the fourth quarter was execution, and "...uniformly, our business leaders met that challenge." He further confirmed that "...Esterline is in a healthy position, poised for another strong year."

The company provided fully diluted earnings per share (EPS) guidance for fiscal 2013 in a range of $5.45 to $5.80, and currently expects organic sales growth of approximately 4% over fiscal 2012. Lawrence noted that the estimates "...include our best analysis of the impact of anticipated defense spending reductions and exclude any potential sales in fiscal 2013 from a second tranche of C-130 cockpit retrofits from a large international customer." He added that "...although the order could still come to fruition, we aren't building it into our current plan and are making appropriate infrastructure adjustments. However, we're looking at a robust year with or without it."

The full-year EPS range for fiscal 2013 incorporates first quarter EPS in the range of $0.45 to $0.60. First quarter sales are expected to be in the range of $450 million to $480 million, in line with the expectation of steadily improving quarterly results as the year progresses. Lawrence noted that the first quarter results will also include the severance impact of selective workforce reductions related to the slowdown in defense activity at several operations.

With regard to the overall defense market in fiscal 2013, Lawrence said despite uncertainty related to sequestration, "...we see promise in our defense programs and technologies that we believe will hold up well as budget dollars are allocated in the coming year." These programs include the Boeing P-8 and Airbus A400M that are planned to come online next year.

Lawrence said "...we are confident that the continued strength of the commercial aerospace market will contribute to Esterline's performance in fiscal 2013. Some of our most important commercial customers, including Boeing and Airbus, are still increasing build rates."

In addition, Lawrence said Esterline continues to pursue applications of its aerospace technology in many adjacent markets which are showing growth potential, such as medical capital equipment, high-speed rail, oil and gas exploration, and casino gaming consoles.

For the full fiscal year 2012, Esterline reported record sales of $2.0 billion, with income from continuing operations of $164.7 million, or $5.27 per diluted share, excluding a previously announced third quarter, non-cash charge against goodwill of $52.2 million, or $1.67 per diluted share, related to its U.K.-based Racal Acoustics defense business. Fiscal 2011 income from continuing operations was $133.1 million, or $4.27 per diluted share, on $1.7 billion in sales. Including the charge, full-year fiscal 2012 income from continuing operations was $112.5 million, or $3.60 per diluted share.

New orders increased 23% in the fourth quarter compared with the same period last year. Fiscal 2012 fourth quarter new orders were $607 million compared with $492 million in the prior-year period. For the full-year fiscal 2012, new orders were $2.06 billion, up 10.2% compared with $1.87 billion for fiscal 2011. Backlog increased to $1.32 billion at October 26, 2012, compared with $1.25 billion at the end of the prior year.

Gross margin as a percentage of sales in the fourth quarter of fiscal 2012 was 38.5% compared to the year-ago level of 30.5%. The prior-year period included the effect of purchase accounting related to the Souriau acquisition that lowered gross margin performance in that period. Gross margin for the full fiscal year ended October 26, 2012, was 36.1% compared to the fiscal 2011 level of 34.3%.

Fiscal 2012 fourth quarter selling, general and administrative (SG&A) expenses as a percent of sales were 18.3%, compared with 17.8% in the prior-year period. Full-year SG&A expenses for fiscal 2012 were 19.2%, compared with 17.7% in fiscal 2011; the full-year increase was mainly due to incremental SG&A expenses following the Souriau acquisition in mid-fiscal year 2011. Lawrence reiterated that "...the company is continuing to focus on operational enhancements to further improve operating margins."

Research, development and engineering spending in the fourth quarter was $24.6 million, or 4.6% of sales, compared with $30.6 million, or 6.1% of sales, a year ago. This year's level was favorably impacted by customer-funded engineering and foreign investment tax credits. The year-ago period included higher research and development expenses for avionics products. For the full fiscal year of 2012, research, development and engineering expenses were $107.7 million, or 5.4% of sales, compared with $94.5 million, or 5.5% of sales, in fiscal 2011. Lawrence said the company expects R&D expense levels "...to remain in the five to five and-a-half percent range in fiscal 2013."

The company's income tax rate in the fourth quarter of 2012 was 13.0% compared with 11.8% for the prior-year period. The rates for both periods benefited from various tax credits and foreign interest expense deductions. Total debt decreased by $83.7 million from the end of the third quarter. Lawrence noted that cash flow remains strong and the company will "...continue to pay down debt in addition to having broader opportunities to invest and create value for shareholders in 2013."

Conference Call Information

Esterline will host a conference call to discuss this announcement today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The U.S. dial-in number is 866-510-0712; outside the U.S., use 617-597-5380. The pass code for the call is: 84022046.

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       Fiscal Year Ended
                             ----------------------  ----------------------
                               Oct 26,     Oct 28,     Oct 26,     Oct 28,
                                2012        2011        2012        2011
                             ----------  ----------  ----------  ----------
Segment Sales
  Avionics & Controls        $  220,359  $  209,919  $  790,015  $  841,939
  Sensors & Systems             174,436     163,768     702,394     414,609
  Advanced Materials            135,861     128,710     499,909     461,437
                             ----------  ----------  ----------  ----------

Net Sales                       530,656     502,397   1,992,318   1,717,985

Cost of Sales                   326,403     349,285   1,273,365   1,128,265
                             ----------  ----------  ----------  ----------
                                204,253     153,112     718,953     589,720
Expenses
  Selling, general and
   administrative                97,371      89,235     382,887     304,154
  Research, development and
   engineering                   24,607      30,560     107,745      94,505
  Gain on settlement of
   contingency                       --          --     (11,891)         --
  Goodwill impairment                --          --      52,169          --
  Other income                       --        (487)     (1,263)     (6,853)
                             ----------  ----------  ----------  ----------
    Total Expenses              121,978     119,308     529,647     391,806
                             ----------  ----------  ----------  ----------

Operating Earnings From
 Continuing Operations           82,275      33,804     189,306     197,914

  Interest income                  (145)       (187)       (465)     (1,615)
  Interest expense               11,067      11,835      46,238      40,216
  Loss on extinguishment of
   debt                              --          --          --         831
                             ----------  ----------  ----------  ----------

Income From Continuing
 Operations
Before Income Taxes              71,353      22,156     143,533     158,482
Income Tax Expense                9,281       2,615      29,958      24,938
                             ----------  ----------  ----------  ----------
Income From Continuing
 Operations Including
 Noncontrolling Interests        62,072      19,541     113,575     133,544
Income Attributable to
 Noncontrolling Interests          (412)       (129)     (1,040)       (457)
                             ----------  ----------  ----------  ----------
Income From Continuing
 Operations                      61,660      19,412     112,535     133,087

Income (Loss) From
 Discontinued Operations,
 Net of Tax                          --          28          --         (47)
                             ----------  ----------  ----------  ----------

Net Earnings                 $   61,660  $   19,440  $  112,535  $  133,040
                             ==========  ==========  ==========  ==========

Earnings Per Share - Basic:
  Continuing Operations      $     2.00  $      .64  $     3.66  $     4.36
  Discontinued Operations           .00         .00         .00         .00
                             ----------  ----------  ----------  ----------

Earnings Per Share - Basic   $     2.00  $      .64  $     3.66  $     4.36
                             ==========  ==========  ==========  ==========

Earnings Per Share -
 Diluted:
  Continuing Operations      $     1.97  $      .62  $     3.60  $     4.27
  Discontinued Operations           .00         .00         .00         .00
                             ----------  ----------  ----------  ----------

Earnings Per Share - Diluted $     1.97  $      .62  $     3.60  $     4.27
                             ==========  ==========  ==========  ==========

Weighted Average Number of
 Shares Outstanding - Basic      30,860      30,613      30,749      30,509

Weighted Average Number of
 Shares Outstanding -
 Diluted                         31,330      31,183      31,282      31,154


ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Sales and Income from Continuing Operations by Segment
 (unaudited)
In thousands

                            Three Months Ended        Fiscal Year Ended
                          ----------------------  -------------------------
                            Oct 26,     Oct 28,     Oct 26,        Oct 28,
                             2012        2011        2012           2011
                          ----------  ----------  ----------     ----------

Segment Sales
  Avionics & Controls     $  220,359  $  209,919  $  790,015     $  841,939
  Sensors & Systems          174,436     163,768     702,394        414,609
  Advanced Materials         135,861     128,710     499,909        461,437
                          ----------  ----------  ----------     ----------

Net Sales                 $  530,656  $  502,397  $1,992,318     $1,717,985
                          ==========  ==========  ==========     ==========

Income From Continuing
 Operations
  Avionics & Controls     $   42,214  $   30,664  $   54,917 (1) $  135,187
  Sensors & Systems           21,060     (10,867)     70,890         22,536
  Advanced Materials          27,020      25,263      93,546         82,307
                          ----------  ----------  ----------     ----------
                              90,294      45,060     219,353        240,030

  Corporate expense           (8,019)    (11,743)    (43,201)       (48,969)
  Other income                    --         487       1,263          6,853
  Gain on settlement of
   contingency                    --          --      11,891             --
  Interest income                145         187         465          1,615
  Interest expense           (11,067)    (11,835)    (46,238)       (40,216)
  Loss on extinguishment
   of debt                        --          --          --           (831)
                          ----------  ----------  ----------     ----------

Income From Continuing
 Operations Before Income
 Taxes                    $   71,353  $   22,156  $  143,533     $  158,482
                          ==========  ==========  ==========     ==========

(1) Includes a $52.2 million charge against goodwill of Racal Acoustics.


ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Balance Sheet (unaudited)
In thousands                                        Oct 26,        Oct 28,
                                                     2012           2011
                                                 ------------   ------------
Assets
Current Assets
  Cash and cash equivalents                      $    160,675   $    185,035
  Cash in escrow                                        5,016          5,011
  Accounts receivable, net                            383,362        369,826
  Inventories                                         409,837        402,548
  Income tax refundable                                 4,832          2,857
  Deferred income tax benefits                         46,000         48,251
  Prepaid expenses                                     21,340         19,245
  Other current assets                                  4,631          6,540
                                                 ------------   ------------
    Total Current Assets                            1,035,693      1,039,313

Property, Plant and Equipment, Net                    356,401        368,416

Other Non-Current Assets
  Goodwill                                          1,098,962      1,163,725
  Intangibles, net                                    609,045        693,915
  Debt issuance costs, net                              8,818         10,695
  Deferred income tax benefits                         97,952         79,605
  Other assets                                         20,246         22,917
                                                 ------------   ------------
                                                 $  3,227,117   $  3,378,586
                                                 ============   ============

Liabilities and Shareholders' Equity
Current Liabilities
  Accounts payable                               $    108,689   $    119,888
  Accrued liabilities                                 269,553        270,422
  Credit facilities                                        --          5,000
  Current maturities of long-term debt                 10,610         11,595
  Deferred income tax liabilities                       5,125          9,538
  Federal and foreign income taxes                      2,369          1,918
                                                 ------------   ------------
    Total Current Liabilities                         396,346        418,361

Long-Term Liabilities
  Credit facilities                                   240,000        360,000
  Long-term debt, net of current maturities           598,060        660,028
  Deferred income tax liabilities                     205,198        238,709
  Pension and post-retirement obligations             132,074        107,877
  Other liabilities                                    34,904         19,693

Total Shareholders' Equity                          1,620,535      1,573,918
                                                 ------------   ------------
                                                 $  3,227,117   $  3,378,586
                                                 ============   ============

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

@ThingsExpo Stories
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's platform-as-a-service. The new platform enables developers to build ap...

An entirely new security model is needed for the Internet of Things, or is it? Can we save some old and tested controls for this new and different environment? In his session at @ThingsExpo, New York's at the Javits Center, Davi Ottenheimer, EMC Senior Director of Trust, reviewed hands-on lessons with IoT devices and reveal a new risk balance you might not expect. Davi Ottenheimer, EMC Senior Director of Trust, has more than nineteen years' experience managing global security operations and assessments, including a decade of leading incident response and digital forensics. He is co-author of t...
Technology is enabling a new approach to collecting and using data. This approach, commonly referred to as the "Internet of Things" (IoT), enables businesses to use real-time data from all sorts of things including machines, devices and sensors to make better decisions, improve customer service, and lower the risk in the creation of new revenue opportunities. In his General Session at Internet of @ThingsExpo, Dave Wagstaff, Vice President and Chief Architect at BSQUARE Corporation, discuss the real benefits to focus on, how to understand the requirements of a successful solution, the flow of ...
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, and physical persons. In the IoT vision, every new "thing" - sensor, actuator, data source, data con...
"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Focused on this fast-growing market’s needs, Vitesse Semiconductor Corporation (Nasdaq: VTSS), a leading provider of IC solutions to advance "Ethernet Everywhere" in Carrier, Enterprise and Internet of Things (IoT) networks, introduced its IStaX™ software (VSC6815SDK), a robust protocol stack to simplify deployment and management of Industrial-IoT network applications such as Industrial Ethernet switching, surveillance, video distribution, LCD signage, intelligent sensors, and metering equipment. Leveraging technologies proven in the Carrier and Enterprise markets, IStaX is designed to work ac...
C-Labs LLC, a leading provider of remote and mobile access for the Internet of Things (IoT), announced the appointment of John Traynor to the position of chief operating officer. Previously a strategic advisor to the firm, Mr. Traynor will now oversee sales, marketing, finance, and operations. Mr. Traynor is based out of the C-Labs office in Redmond, Washington. He reports to Chris Muench, Chief Executive Officer. Mr. Traynor brings valuable business leadership and technology industry expertise to C-Labs. With over 30 years' experience in the high-tech sector, John Traynor has held numerous...
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devices - computers, smartphones, tablets, and sensors - connected to the Internet by 2020. This number will continue to grow at a rapid pace for the next several decades.