Q1 2005 Esterline Technologies Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good afternoon and welcome ladies and gentlemen to the Esterline Technologies First Quarter 2005 Fiscal Results Conference Call.

At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. As a request of the company we will open up the conference up for questions and answers after the presentation.

I will now turn the conference to Mr. Brian Keogh. Please go ahead sir.

BRIAN KEOGH, INVESTOR RELATIONS, ESTERLINE TECHNOLOGIES: Thanks Allan. Hello everyone. Thanks for joining us today on our first earnings call for fiscal 2005. Bob Cremin Esterline's Chairman, President and CEO and Bob George, Vice President and CFO are today to discuss our first quarter performance.

As usual the call is being broadcast live on the Internet and as is mentioned is being recorded. A replay will be available shortly after the call at the following number: 877-519-4471. You'll also need this pin number: 5647283. The operator will repeat these numbers at the end of the call.

Also a replay will be available at our website www.esterline.com in the investor relations section. Our news release went out about an hour ago and it too will be found on the website.

In the release there's a paragraph regarding forward-looking statements. It covers this call as well. Fundamentally it says that forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 are based on management's current expectations and are not guarantees of future performance. I'm sure you all know that forward looking statements involve risks and uncertainties which we detail in our public filings with the SEC.

With that said, I'll turn it over to Bob Cremin.

ROBERT W. CREMIN, CHAIRMAN, PRESIDENT AND CEO, ESTERLINE TECHNOLOGIES: Thanks Brian and thanks to everybody for joining us today. So let's get right to it. I think we're off to a good start this year. Our first quarter was very solid and as we like to see the results were quite well balanced across the full ranges of our business. Notably demand was particularly high through out power distribution equipment and our advanced elastomers.

There was also good balance across all of our markets with the commercial airline after market and our medical markets being particularly strong in the ports. We're now clearly seeing the leverage of our acquisition activity. Integration of our most recent acquisition Leach International is going very smoothly. Leach which was acquired in the fourth quarter of '04 is already contributing solidly to the bottom line though its first quarter performance continues to be affected somewhat by purchase accounting rules. With the Leach acquisition we picked up a very good management team and we expect to see continuing improvement from the operation as we go forward.

Regarding the sale of our Ohio based fluid regulators subsidiaries they said in the release we're approached with a very attractive offer - are particularly well suited owner. Also figuring into our thinking was the 2003 acquisition of the Weston Group companies.

Back in 1997, when we acquired Fluid Regulators part of the strategy at that time was to provide access to U.S. markets for our French based sensors operation. With the Weston acquisition we picked up a very solid operation of the U.S. and it now operates as our U.S. base for sensor activity and Bob will get into how the accounted for later.

Back in December we received notice from the U.S. Army of a significant win for our arm tech defense group and I shared that news with you and our December conference call. Shortly thereafter however that award was challenged but last week the Army reconfirmed our win. A one year base contract of $21 million to produce counter measures flickers for the U.S. Air Force including options.

The contract has the potential to total about $127 million over five years. The major portion of the contract which in the end was awarded to only two or three final competitors.

Bob with that said, how about going over the numbers now?

ROBERT D. GEORGE, VP AND CFO, ESTERLINE TECHNOLOGIES: Sure Bob thanks. Good afternoon. As Bob has just highlighted Esterline's performance in Q1 gets us off to a good start and as you all know we haven't been known for our fast starts. With some of the anomalies we faced in last year's first quarter and with our rapid growth, quarterly comparisons are difficult so I'd like to focus on current …