Esterline Corporation reported results for its first fiscal quarter, ended January 30, 2015. GAAP earnings from continuing operations were $25.1 million, or $0.78 per diluted share, on sales of $446.3 million.
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This compares with results from the prior-year period, a 14-week quarter ended January 31, 2014, of GAAP earnings from continuing operations of $33.9 million, or $1.05 per diluted share, on sales of $485.9 million.
Excluding the company's previously announced integration and compliance activities, adjusted earnings from continuing operations were $31.6 million, or $0.98 per diluted share, in the first quarter of fiscal 2015 compared with $38.8 million, or $1.20 per diluted share, in the first quarter of fiscal 2014.
In the first quarter of fiscal 2015, Esterline reported sales from continuing operations of $446.3 million, a decrease of 8.1% compared with the prior-year level of $485.9 million. Lower sales were primarily the result of comparing this year's 13-week first fiscal quarter with the prior year's 14-week first fiscal quarter.
In addition, foreign currency effects had a negative impact on fiscal 2015 first quarter sales of approximately $14 million.
Earnings from continuing operations in the first quarter of fiscal 2015 were $25.1 million, or $0.78 per diluted share, compared with $33.9 million, or $1.05 per diluted share, in the same period last year.
Excluding after-tax integration activity expenses of $3.8 million and compliance expenses of $2.8 million, adjusted earnings from continuing operations were $31.6 million, or $0.98 per diluted share.
Net earnings for the first fiscal quarter of 2015 were $8.3 million, or $0.26 per diluted share, compared with $30.1 million, or $0.93 per diluted share, in the prior-year period.
Net earnings in the first quarter of fiscal 2015 included a $16.7 million loss from discontinued operations, including $14.1 million on assets held for sale. The prior-year period included a $3.9 million discontinued operations impact.
New orders in the first quarter of fiscal 2015 were $432.1 million. Backlog at the end of the first quarter of fiscal 2015 was $1.13 billion, compared with $1.22 billion at the end of the first quarter of fiscal 2014.
Gross margin as a percentage of sales in the first quarter of fiscal 2015 was 32.6%, compared with 35.1% in the prior-year period.
This change reflects a lower recovery of fixed overhead on decreased sales volumes compared with the prior year's 14-week revenue total, somewhat softer product mix, and higher margin sales moving into the second quarter, particularly in Avionics & Controls and Advanced Materials.
Fiscal 2015 first quarter SG&A expense as a percent of sales was 21.0% compared with the prior-year level of 18.3%. Excluding integration and compliance adjustments in both 2015 and 2014, SG&A in the respective first quarters was 20.2% and 18.0% of sales.
Research, development and engineering spending in the first quarter of fiscal 2015 was $22.5 million, or 5.0% of sales, compared with $25.6 million, or 5.3% of sales, in the prior-year period.
The company's income tax rate in the first quarter of fiscal 2015 was 24.5% compared with 20.2% for the prior-year period. This difference is primarily a function of the timing of recognizing discrete tax benefits and expenses. The company continues to forecast a full-year average tax rate in the 22% to 23% range. ■