Welcome!

Microsoft Cloud Authors: David H Deans, Pat Romanski, Janakiram MSV, Jnan Dash, Andreas Grabner

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
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you...
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
With major technology companies and startups seriously embracing Cloud strategies, now is the perfect time to attend @CloudExpo | @ThingsExpo, June 6-8, 2017, at the Javits Center in New York City, NY and October 31 - November 2, 2017, Santa Clara Convention Center, CA. Learn what is going on, contribute to the discussions, and ensure that your enterprise is on the right path to Digital Transformation.
Have you ever noticed how some IT people seem to lead successful, rewarding, and satisfying lives and careers, while others struggle? IT author and speaker Don Crawley uncovered the five principles that successful IT people use to build satisfying lives and careers and he shares them in this fast-paced, thought-provoking webinar. You'll learn the importance of striking a balance with technical skills and people skills, challenge your pre-existing ideas about IT customer service, and gain new in...
With 10 simultaneous tracks, keynotes, general sessions and targeted breakout classes, Cloud Expo and @ThingsExpo are two of the most important technology events of the year. Since its launch over eight years ago, Cloud Expo and @ThingsExpo have presented a rock star faculty as well as showcased hundreds of sponsors and exhibitors! In this blog post, I provide 7 tips on how, as part of our world-class faculty, you can deliver one of the most popular sessions at our events. But before reading the...
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud enviro...
TechTarget storage websites are the best online information resource for news, tips and expert advice for the storage, backup and disaster recovery markets. By creating abundant, high-quality editorial content across more than 140 highly targeted technology-specific websites, TechTarget attracts and nurtures communities of technology buyers researching their companies' information technology needs. By understanding these buyers' content consumption behaviors, TechTarget creates the purchase inte...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business. Though, IoT is far more complex than most firms expected with a majority of IoT projects having failed. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, Chief IoTologist at Wipro, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology portfolios and business models to adopt and leverage IoT. He will delve in...
Who are you? How do you introduce yourself? Do you use a name, or do you greet a friend by the last four digits of his social security number? Assuming you don’t, why are we content to associate our identity with 10 random digits assigned by our phone company? Identity is an issue that affects everyone, but as individuals we don’t spend a lot of time thinking about it. In his session at @ThingsExpo, Ben Klang, Founder & President of Mojo Lingo, discussed the impact of technology on identity. Sho...
There are 66 million network cameras capturing terabytes of data. How did factories in Japan improve physical security at the facilities and improve employee productivity? Edge Computing reduces possible kilobytes of data collected per second to only a few kilobytes of data transmitted to the public cloud every day. Data is aggregated and analyzed close to sensors so only intelligent results need to be transmitted to the cloud. Non-essential data is recycled to optimize storage.
SYS-CON Events announced today that SD Times | BZ Media has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and commercial UAV markets.
“We're a global managed hosting provider. Our core customer set is a U.S.-based customer that is looking to go global,” explained Adam Rogers, Managing Director at ANEXIA, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
In today's uber-connected, consumer-centric, cloud-enabled, insights-driven, multi-device, global world, the focus of solutions has shifted from the product that is sold to the person who is buying the product or service. Enterprises have rebranded their business around the consumers of their products. The buyer is the person and the focus is not on the offering. The person is connected through multiple devices, wearables, at home, on the road, and in multiple locations, sometimes simultaneously...