Esterline Technologies Corp. (ESL, Financial) filed Quarterly Report for the period ended 2009-07-31.
Esterline Technologies Corporation is a specialized engineering and manufacturing company principally serving aerospace and defense markets. They design manufacture and market highly engineered products and systems for application within the industries they serve. Their products are found on most military and commercial aircraft helicopters and land-based systems. Their sales are diversified across three broad markets: defense commercial aerospace and general industrial. Esterline Technologies Corp. has a market cap of $906.3 million; its shares were traded at around $30.5 with a P/E ratio of 9.3 and P/S ratio of 0.6. Esterline Technologies Corp. had an annual average earning growth of 3.5% over the past 10 years.
Income from discontinued operations was $0.54 per diluted share, compared with $0.15 per diluted share in the prior-year period, reflecting the gain on sale of our U.K.-based Muirhead and Traxsys subsidiaries in November 2008. Net income was $85.3 million, or $2.86 per diluted share, compared with net income of $76.7 million, or $2.56 per diluted share, in the prior-year period.
The effective income tax rate for the first nine months of fiscal 2009 was 15.7% (before a $2.9 million tax benefit) compared with 23.0% (before a $5.9 million tax benefit) for the prior-year period. The $2.9 million tax benefit in the first nine months of fiscal 2009 was the result of five events. The first event was a $2.0 million tax benefit for the reduction of previously recorded withholding tax liabilities as a result of the enactment of a U.S.-Canadian tax treaty. The second event was the recording of a $1.6 million tax accrual recorded in the first fiscal quarter of 2009 for a potential penalty due to the application of certain foreign tax laws. The third event was a $0.6 million expense resulting from the reversal of previously recorded tax benefits associated with the implementation of CMCs SADI program. The fourth event was the reversal of the $1.6 million tax accrual recorded in the first fiscal quarter of 2009 due to the application of certain foreign tax laws. The fifth event was a $1.5 million tax benefit associated with the reconciliation of the prior years U.S. income tax return to the U.S. income tax provision. The $5.9 million of tax benefit in the first nine months of fiscal 2008 was the result of four events. The first event was the settlement of an examination of the U.S. federal income tax returns for fiscal 2003 through 2005, which resulted in a $2.8 million reduction of previously estimated income tax liabilities. The second event was the enactment of tax laws reducing the Canadian statutory tax rate, which resulted in a $4.1 million net reduction of deferred income tax liabilities. The third event was the recognition of $0.7 million of additional income tax liabilities at CMC. The fourth event was a $0.3 million increase of previously estimated tax liabilities due to a reconciliation of the prior years U.S. income tax return to the U.S. income tax returns provision for income taxes. The effective tax rate differed from the statutory rate in the first nine months of fiscal 2009 and 2008, as both years benefited from various tax credits and certain foreign interest expense deductions.
Cash and cash equivalents at July 31, 2009, totaled $148.8 million, a decrease of $11.8 million from October 31, 2008. Net working capital increased to $477.1 million at July 31, 2009, from $456.2 million at October 31, 2008. Sources and uses of cash flows from operating activities principally consist of cash received from the sale of products and cash payments for material, labor and operating expenses. Cash flows provided by operating activities were $114.8 million and $93.6 million in the first nine months of fiscal 2009 and 2008, respectively. The increase principally reflected increased income from continuing operations, increased cash receipts from customers and advanced payments on long-term contracts. The increase in cash flows from operations was partially offset by increased payments for income taxes.
Cash flows used by investing activities were $234.2 million and $18.3 million in the first nine months of fiscal 2009 and 2008, respectively. Cash flows used by investing activities in the first nine months of fiscal 2009 primarily reflected approximately $255.2 million for the acquisitions of NMC and Racal, and $42.5 million in purchases of capital assets, partially offset by proceeds from the sale of Muirhead and Traxsys of $62.9 million. Cash flows used by investing activities in the prior-year period included $31.0 million in purchases of capital assets.
Total debt at July 31, 2009, was $514.4 million and consisted of $175.0 million of Senior Notes due in 2017, $172.9 million of Senior Subordinated Notes due in 2013, $125.0 million under our U.S. term loan, $2.5 million of deferred gain on a terminated interest rate swap, and $39.0 million of various foreign currency debt agreements and other debt agreements, including capital lease obligations.
Read the The complete ReportESL is in the portfolios of David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC.
Esterline Technologies Corporation is a specialized engineering and manufacturing company principally serving aerospace and defense markets. They design manufacture and market highly engineered products and systems for application within the industries they serve. Their products are found on most military and commercial aircraft helicopters and land-based systems. Their sales are diversified across three broad markets: defense commercial aerospace and general industrial. Esterline Technologies Corp. has a market cap of $906.3 million; its shares were traded at around $30.5 with a P/E ratio of 9.3 and P/S ratio of 0.6. Esterline Technologies Corp. had an annual average earning growth of 3.5% over the past 10 years.
Highlight of Business Operations:
Income from continuing operations was $69.3 million, or $2.32 per diluted share, compared with $72.1 million, or $2.41 per diluted share, in the prior-year period. Income from continuing operations for the first nine months of fiscal 2009 was impacted by a foreign currency loss of $7.9 million or $1.7 million after tax, or $0.06 per diluted share, relating to the pound sterling-denominated funding of our acquisition of Racal in January 2009.Income from discontinued operations was $0.54 per diluted share, compared with $0.15 per diluted share in the prior-year period, reflecting the gain on sale of our U.K.-based Muirhead and Traxsys subsidiaries in November 2008. Net income was $85.3 million, or $2.86 per diluted share, compared with net income of $76.7 million, or $2.56 per diluted share, in the prior-year period.
The effective income tax rate for the first nine months of fiscal 2009 was 15.7% (before a $2.9 million tax benefit) compared with 23.0% (before a $5.9 million tax benefit) for the prior-year period. The $2.9 million tax benefit in the first nine months of fiscal 2009 was the result of five events. The first event was a $2.0 million tax benefit for the reduction of previously recorded withholding tax liabilities as a result of the enactment of a U.S.-Canadian tax treaty. The second event was the recording of a $1.6 million tax accrual recorded in the first fiscal quarter of 2009 for a potential penalty due to the application of certain foreign tax laws. The third event was a $0.6 million expense resulting from the reversal of previously recorded tax benefits associated with the implementation of CMCs SADI program. The fourth event was the reversal of the $1.6 million tax accrual recorded in the first fiscal quarter of 2009 due to the application of certain foreign tax laws. The fifth event was a $1.5 million tax benefit associated with the reconciliation of the prior years U.S. income tax return to the U.S. income tax provision. The $5.9 million of tax benefit in the first nine months of fiscal 2008 was the result of four events. The first event was the settlement of an examination of the U.S. federal income tax returns for fiscal 2003 through 2005, which resulted in a $2.8 million reduction of previously estimated income tax liabilities. The second event was the enactment of tax laws reducing the Canadian statutory tax rate, which resulted in a $4.1 million net reduction of deferred income tax liabilities. The third event was the recognition of $0.7 million of additional income tax liabilities at CMC. The fourth event was a $0.3 million increase of previously estimated tax liabilities due to a reconciliation of the prior years U.S. income tax return to the U.S. income tax returns provision for income taxes. The effective tax rate differed from the statutory rate in the first nine months of fiscal 2009 and 2008, as both years benefited from various tax credits and certain foreign interest expense deductions.
Cash and cash equivalents at July 31, 2009, totaled $148.8 million, a decrease of $11.8 million from October 31, 2008. Net working capital increased to $477.1 million at July 31, 2009, from $456.2 million at October 31, 2008. Sources and uses of cash flows from operating activities principally consist of cash received from the sale of products and cash payments for material, labor and operating expenses. Cash flows provided by operating activities were $114.8 million and $93.6 million in the first nine months of fiscal 2009 and 2008, respectively. The increase principally reflected increased income from continuing operations, increased cash receipts from customers and advanced payments on long-term contracts. The increase in cash flows from operations was partially offset by increased payments for income taxes.
Cash flows used by investing activities were $234.2 million and $18.3 million in the first nine months of fiscal 2009 and 2008, respectively. Cash flows used by investing activities in the first nine months of fiscal 2009 primarily reflected approximately $255.2 million for the acquisitions of NMC and Racal, and $42.5 million in purchases of capital assets, partially offset by proceeds from the sale of Muirhead and Traxsys of $62.9 million. Cash flows used by investing activities in the prior-year period included $31.0 million in purchases of capital assets.
Total debt at July 31, 2009, was $514.4 million and consisted of $175.0 million of Senior Notes due in 2017, $172.9 million of Senior Subordinated Notes due in 2013, $125.0 million under our U.S. term loan, $2.5 million of deferred gain on a terminated interest rate swap, and $39.0 million of various foreign currency debt agreements and other debt agreements, including capital lease obligations.
Read the The complete ReportESL is in the portfolios of David Dreman of Dreman Value Management, Kenneth Fisher of Fisher Asset Management, LLC.
