Esterline Reports 2Q Earnings of $19.8 Million; $.76 per Share, on $312.3 Million Sales

BELLEVUE, WA--(Marketwire - May 31, 2007) - Esterline Corporation (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2007 second quarter (ended April 27) net earnings of $19.8 million, or $.76 per diluted share, on $312.3 million sales. Year-ago net earnings were $17.7 million, or $.68 per diluted share, on sales of $247.9 million.

Robert W. Cremin, Esterline CEO said, "...we really like the way fiscal 2007 is shaping up. The 12% earnings improvement in the quarter was particularly gratifying given a more than 50% year-over-year increase in interest expense associated with the financing of the recent CMC acquisition, and the initial impact of acquisition accounting that requires revaluing acquired inventories as of the acquisition date."

Regarding the acquisition, Cremin said Esterline's fiscal third quarter will be burdened with the majority of the acquisition accounting costs. However, he said "...the more exposure we have to CMC the more we like it, and more importantly, the combined strength of Esterline's and CMC's fourth quarter will absorb the short-term dilution of the CMC acquisition." Underscoring this performance, the company increased its full-year earnings guidance to a range of $2.50 - $2.60 per share.

Backlog at quarter end totaled $954 million. Cremin said, "...backlog strength is one of the markers we use to judge forward momentum." He noted that CMC contributed $252 million to backlog in the quarter, and pointed out that "...even without the CMC contribution, Esterline's backlog grew 7% in the past three months and 11% compared to last year." He noted that the company's backlog reflects only fully funded orders with firm release dates.

Consolidated gross margin in the quarter was 31.7% compared with 32.6% a year ago. The purchase accounting costs associated with CMC were the primary cause of the change. Selling, general and administrative expenses (SG&A) totaled $50.4 million in the second quarter of 2007, compared with $41.0 million a year ago, again principally due to incremental SG&A expenses from acquisitions. As a percent of sales, SG&A continued to decline, dropping to 16.1% in the second quarter of 2007 compared with 16.5% in the prior-year period.

Research, development and engineering expense during the quarter was $19.1 million, or 6.1% of sales, reflecting CMC's cockpit integration activity on the T-6 military trainer program, and a spike in activity levels on both the 787 and the A400M as Boeing and Airbus push toward critical program dates. R&D spending is expected to decline during the second half of fiscal 2007.

Interest expense for the second fiscal quarter of 2007 was $8.7 million compared with $5.8 million a year ago, reflecting increased borrowings to finance acquisitions and working capital requirements.

Year-to-date net earnings were $32.6 million, or $1.25 per diluted share, on sales of $569.5 million. For the first six months of fiscal 2006, comparable earnings were $26.0 million, or $1.01 per diluted share, on sales of $453.6 million.

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.

ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations
------------------------------------
In thousands, except per share amounts

                          Three months ended           Six months ended
                         April 27,    April 28,     April 27,     April 28,
                           2007         2006          2007          2006
                         --------     --------      --------      --------
Segment Sales
 Avionics & Controls     $108,314     $ 71,864      $183,819      $134,306
 Sensors & Systems         98,123       83,177       184,314       156,647
 Advanced Materials       105,843       92,898       201,391       162,651
                         --------     --------      --------      --------

Net Sales                 312,280      247,939       569,524       453,604

Cost of Sales             213,418      167,200       396,093       310,006
                         --------     --------      --------      --------
                           98,862       80,739       173,431       143,598
Expenses
 Selling, general and
  administrative           50,401       40,973        92,776        76,863
 Research, development
  and engineering          19,082       12,939        32,633        23,272
                         --------     --------      --------      --------
 Total Expenses            69,483       53,912       125,409       100,135

Other
 Other (income) expense        27         (263)           17          (462)
 Insurance recovery        (2,810)          --        (4,457)           --
                         --------     --------      --------      --------
 Total Other               (2,783)        (263)       (4,440)         (462)
                         --------     --------      --------      --------

Operating Earnings         32,162       27,090        52,462        43,925

 Interest income             (785)        (998)       (1,289)       (1,857)
 Interest expense           8,728        5,790        14,252        10,295
 Loss on extinguishment
  of debt                      --           --            --         2,156
                         --------     --------      --------      --------
Other Expense, Net          7,943        4,792        12,963        10,594
                         --------     --------      --------      --------

Income Before Income
 Taxes                     24,219       22,298        39,499        33,331
Income Tax Expense          4,494        4,307         6,879         6,863
                         --------     --------      --------      --------
Income Before Minority
 Interest                  19,725       17,991        32,620        26,468
Minority Interest              35         (332)          (59)         (445)
                         --------     --------      --------      --------

Net Earnings             $ 19,760     $ 17,659      $ 32,561      $ 26,023
                         ========     ========      ========      ========

Earnings Per Share:
 Basic                   $    .77     $    .70      $   1.27      $   1.03
 Diluted                 $    .76     $    .68      $   1.25      $   1.01


Weighted Average Number
 of Shares Outstanding
 --Basic                   25,590       25,385        25,560        25,361

Weighted Average Number
 of Shares Outstanding
 --Diluted                 25,997       25,817        25,964        25,780




Consolidated Balance Sheet
--------------------------
In thousands                                  April 27,       April 28,
                                                2007            2006
                                            ----------      ----------
Assets
Current Assets
        Cash and cash equivalents           $   60,662      $   46,256
        Cash in escrow                           1,275           4,315
        Accounts receivable, net               238,878         171,236
        Inventories                            241,670         168,679
        Income tax refundable                   14,391              --
        Deferred income tax benefits            31,183          26,672
        Prepaid expenses                        13,366          10,469
                                            ----------      ----------
                Total Current Assets           601,425         427,627

Property, Plant and Equipment, Net             213,840         166,679

Other Non-Current Assets
        Goodwill                               583,054         360,784
        Intangibles, net                       374,315         245,845
        Debt issuance costs, net                10,418           5,824
        Deferred income tax benefits            13,465          17,773
        Other assets                            29,114          25,555
                                            ----------      ----------
                                            $1,825,631      $1,250,087
                                            ==========      ==========

Liabilities and Shareholders' Equity
Current Liabilities
        Accounts payable                    $   79,824      $   59,975
        Accrued liabilities                    168,311         108,790
        Credit facilities                       49,573          18,413
        Current maturities of long-term debt     8,760           3,077
        Federal and foreign income taxes         8,220           5,751
                                            ----------      ----------
                Total Current Liabilities      314,688         196,006
Long-Term Liabilities
        Long-term debt, net of current
         maturities                            559,061         279,756
        Deferred income taxes                  115,708          74,806
        Other liabilities                       43,956          34,527

Commitments and Contingencies                       --              --
Minority Interest                                3,283           3,158

Shareholders' Equity                           788,935         661,834
                                            ----------      ----------
                                            $1,825,631      $1,250,087
                                            ==========      ==========

Contact Information: Contact: Brian Keogh 425-453-9400 Esterline Corporation 500 108th Avenue NE Suite 1500 Bellevue, WA 98004 Tel: 425-453-9400 Fax: 425-453-2916 www.esterline.com