Esterline Technologies Corp. (ESL, Financial) filed Quarterly Report for the period ended 2010-07-30.
Esterline Technologies Corp. has a market cap of $1.5 billion; its shares were traded at around $49.85 with a P/E ratio of 13.6 and P/S ratio of 1.1. Esterline Technologies Corp. had an annual average earning growth of 9.3% over the past 10 years.ESL is in the portfolios of David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.
Avionics & Controls segment gross margin was 34.4% and 34.8% for the first nine months of fiscal 2010 and 2009, respectively. Segment gross profit was $193.6 million compared to $162.9 million in the prior-year period, reflecting a $24.7 million increase in avionics systems, a $9.3 million increase in interface technologies, a $6.9 million increase in communication systems, and a $10.1 million decrease in control systems. The $24.7 million increase in avionics systems is principally due to strong cockpit integration sales volumes. The increase in segment gross profit also reflects a $9.3 million increase in interface technologies. About half of the increase in interface technologies gross profit is due to higher sales volumes of input devices for casino gaming applications, and half of the increase is due to higher sales volumes for medical applications. The $6.9 million increase in communication systems gross profit reflects incremental gross profit from the acquisition of Racal Acoustics in the first fiscal quarter of 2009. The $10.1 million decrease in gross profit on control systems is mainly due to weaker gross margin of controls for commercial and military applications, as well as higher operating costs from our new control systems facility.
Avionics & Controls segment earnings were $78.4 million, or 13.9% of sales, in the first nine months of fiscal 2010 and $63.2 million, or 13.5% of sales, in the first nine months of fiscal 2009, principally reflecting a $20.0 million increase in avionics systems and a $9.0 million increase in interface technologies, partially offset by a $12.2 million decrease in control systems. Avionics systems benefited from increased gross profit, partially offset by a $3.8 million increase in selling, general and administrative expense, principally reflecting the effect of foreign currency exchange rates. Control systems earnings were impacted by lower gross profit and higher research, development and engineering spending of $1.4 million. Interface technologies benefited from strong gross profit from sales of input devices for casino gaming and medical applications.
Advanced Materials segment earnings were $45.0 million, or 14.4% of sales, for the first nine months of fiscal 2010 compared with $40.4 million, or 13.2% of sales, for the first nine months of fiscal 2009, principally reflecting a $7.6 million increase in defense technologies and a $3.3 million decrease in engineered materials. The $7.6 million increase in defense technologies principally reflected a $13.1 million increase in earnings at our countermeasures operations and a $5.5 million decrease at our combustible ordnance operations. The increase in countermeasures earnings reflected strong gross profit and a turnaround from a $4.2 million operating loss incurred in the prior-year period. The decrease in combustible ordnance is due to decreased
Cash flows provided by financing activities were $12.7 million and $100.4 million in the first nine months of fiscal 2010 and 2009, respectively. Cash flows provided by financing activities in the first nine months of fiscal 2010 primarily reflected $8.4 million in proceeds from stock issuance under our employee stock plans and $8.5 million in government assistance for research, development and engineering, which is accounted for as a loan. Cash flows provided by financing activities in the prior-year period primarily included $3.2 million in proceeds from stock issuance under our employee stock plans, proceeds from a $125.0 million term loan due in 2012 to finance the Racal Acoustics acquisition, and $34.4 million in repayments on our GBP term loan.
On August 2, 2010, we issued $250.0 million of 7% fixed rate senior notes due on August 1, 2020. The net proceeds from the sale of the senior notes, after deducting $4.7 million of debt issuance cost, were $245.3 million. The net proceeds from the offering will be used to repurchase or otherwise redeem all of the $175.0 million outstanding 7 3/4% Senior Subordinated Notes due 2013. On August 2, 2010, we repurchased approximately $157.6 million of the Senior Subordinated Notes due in 2013 under a cash tender offer. The remaining $17.4 million of the Senior Subordinated Notes due in 2013 will be redeemed in September 2010. The estimated loss on extinguishment of debt is expected to be approximately $5.1 million. A deferred gain of $3.7 million on the termination of interest rate swaps will also be recognized as a Gain on Derivative Financial Instruments subsequent to July 30, 2010.
Read the The complete Report
Esterline Technologies Corp. has a market cap of $1.5 billion; its shares were traded at around $49.85 with a P/E ratio of 13.6 and P/S ratio of 1.1. Esterline Technologies Corp. had an annual average earning growth of 9.3% over the past 10 years.ESL is in the portfolios of David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC, Bruce Kovner of Caxton Associates, George Soros of Soros Fund Management LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
The effective income tax rate for the third fiscal quarter of 2010 was 22.5% (before a $7.6 million discrete tax benefit) compared with 17.5% (before a $3.2 million discrete tax benefit) for the prior-year period. The $7.6 million of discrete tax benefits in the third fiscal quarter of 2010 was the result of three items. The first item was a $6.4 million benefit as a result of the release of tax reserves for uncertain tax positions associated with losses on the disposition of assets. This release resulted from the expiration of a statute of limitations. The second item was a $1.6 million net reduction in deferred income tax liabilities, which was the result of the enactment of tax laws reducing the U.K. statutory income tax rate. The third item was a $0.4 million tax expense related to interest on tax reserves and tax liability associated with an examination of U.S. income tax returns. The $3.2 million of discrete tax benefits in the third fiscal quarter of 2009 was related to a $1.6 million reversal of previously recorded expense due to the application of certain foreign tax laws, and a $1.6 million tax benefit associated with the reconciliation of the prior years income tax returns to the provision for income taxes.Avionics & Controls segment gross margin was 34.4% and 34.8% for the first nine months of fiscal 2010 and 2009, respectively. Segment gross profit was $193.6 million compared to $162.9 million in the prior-year period, reflecting a $24.7 million increase in avionics systems, a $9.3 million increase in interface technologies, a $6.9 million increase in communication systems, and a $10.1 million decrease in control systems. The $24.7 million increase in avionics systems is principally due to strong cockpit integration sales volumes. The increase in segment gross profit also reflects a $9.3 million increase in interface technologies. About half of the increase in interface technologies gross profit is due to higher sales volumes of input devices for casino gaming applications, and half of the increase is due to higher sales volumes for medical applications. The $6.9 million increase in communication systems gross profit reflects incremental gross profit from the acquisition of Racal Acoustics in the first fiscal quarter of 2009. The $10.1 million decrease in gross profit on control systems is mainly due to weaker gross margin of controls for commercial and military applications, as well as higher operating costs from our new control systems facility.
Avionics & Controls segment earnings were $78.4 million, or 13.9% of sales, in the first nine months of fiscal 2010 and $63.2 million, or 13.5% of sales, in the first nine months of fiscal 2009, principally reflecting a $20.0 million increase in avionics systems and a $9.0 million increase in interface technologies, partially offset by a $12.2 million decrease in control systems. Avionics systems benefited from increased gross profit, partially offset by a $3.8 million increase in selling, general and administrative expense, principally reflecting the effect of foreign currency exchange rates. Control systems earnings were impacted by lower gross profit and higher research, development and engineering spending of $1.4 million. Interface technologies benefited from strong gross profit from sales of input devices for casino gaming and medical applications.
Advanced Materials segment earnings were $45.0 million, or 14.4% of sales, for the first nine months of fiscal 2010 compared with $40.4 million, or 13.2% of sales, for the first nine months of fiscal 2009, principally reflecting a $7.6 million increase in defense technologies and a $3.3 million decrease in engineered materials. The $7.6 million increase in defense technologies principally reflected a $13.1 million increase in earnings at our countermeasures operations and a $5.5 million decrease at our combustible ordnance operations. The increase in countermeasures earnings reflected strong gross profit and a turnaround from a $4.2 million operating loss incurred in the prior-year period. The decrease in combustible ordnance is due to decreased
Cash flows provided by financing activities were $12.7 million and $100.4 million in the first nine months of fiscal 2010 and 2009, respectively. Cash flows provided by financing activities in the first nine months of fiscal 2010 primarily reflected $8.4 million in proceeds from stock issuance under our employee stock plans and $8.5 million in government assistance for research, development and engineering, which is accounted for as a loan. Cash flows provided by financing activities in the prior-year period primarily included $3.2 million in proceeds from stock issuance under our employee stock plans, proceeds from a $125.0 million term loan due in 2012 to finance the Racal Acoustics acquisition, and $34.4 million in repayments on our GBP term loan.
On August 2, 2010, we issued $250.0 million of 7% fixed rate senior notes due on August 1, 2020. The net proceeds from the sale of the senior notes, after deducting $4.7 million of debt issuance cost, were $245.3 million. The net proceeds from the offering will be used to repurchase or otherwise redeem all of the $175.0 million outstanding 7 3/4% Senior Subordinated Notes due 2013. On August 2, 2010, we repurchased approximately $157.6 million of the Senior Subordinated Notes due in 2013 under a cash tender offer. The remaining $17.4 million of the Senior Subordinated Notes due in 2013 will be redeemed in September 2010. The estimated loss on extinguishment of debt is expected to be approximately $5.1 million. A deferred gain of $3.7 million on the termination of interest rate swaps will also be recognized as a Gain on Derivative Financial Instruments subsequent to July 30, 2010.
Read the The complete Report
