Esterline Reports 3Q EPS of $.61 Before One-Time Insurance Recovery

BELLEVUE, WA--(Marketwire - August 30, 2007) - Esterline Corporation (NYSE: ESL) (www.esterline.com), a leading specialty manufacturer serving aerospace/defense markets, today reported fiscal 2007 third quarter (ended July 27) net earnings of $38.8 million, or $1.49 per diluted share, including $23.0 million after tax, or $.88 per share, from a previously announced insurance recovery. Sales in the third quarter of FY07 were $326.4 million, including $40.9 million from recently acquired CMC Electronics. Year-ago net earnings were $11.2 million, or $.43 per diluted share, on sales of $248.4 million.

Robert W. Cremin, Esterline CEO, characterized the quarter as "... another solid performance for Esterline, with organic sales up 15% and earnings from operations up 41% over last year." Cremin added that on a year-over-year-basis, "... all three Esterline business segments contributed to the growth." He also emphasized that the quarter's performance absorbed nearly $3.4 million of acquisition-related accounting expense associated with the CMC acquisition. "We like the way the quarter came together, and more importantly, many elements are now in place for an excellent fourth quarter." On that note, the company raised its full-year operating earnings guidance by $.05 to a range of $2.55 to $2.65 per share, excluding the insurance recovery of $.88 in the third quarter.

Regarding CMC, Cremin said that the final impact of acquisition accounting "... was booked in the third quarter, so the purchase accounting anomalies are now behind us." He added that since the date of the acquisition, the company has reduced its term loan credit facility by $35 million, "... reflecting Esterline's strong cash flow generation."

Backlog at quarter end totaled $978 million. Cremin said, "... at this point, the backlog number includes only a few million dollars from such high-profile new programs as the 787, A400M or A380. What this says to me is regardless of what may or may not happen to the schedules of these platforms, we have plenty of good things happening on hundreds of other programs."

Consolidated gross margin in the quarter was 30.5% compared with 30.3% a year ago. The primary reason for the level margin performance was the purchase accounting effect on inventory costs associated with the acquisition of CMC. Selling, general and administrative expenses (SG&A) as a percent of sales were 17.0% in the third quarter of 2007 compared with 16.7% in the prior-year period. Cremin said, "... the company's operations have done a good job keeping our overhead slim and a lid on our capital spending."

Cremin noted that, "... as anticipated, research, development and engineering expense during the quarter declined to 5.2% of sales. That level compares with 6.1% last quarter and 5.8% a year ago." He said he anticipates R&D spending to continue to decline as the 787 and A400M programs move closer to production. R&D spending in the company's fourth fiscal quarter is anticipated to be about 5% of sales.

The insurance recovery relates to property damage and business interruption claims related to last year's explosion at Esterline's UK-based countermeasure flares operation. During the third quarter of fiscal 2007, the company recorded insurance recoveries of $23.0 million, net of tax of $9.9 million. Year-to-date, insurance recoveries totaled $26.1 million, net of tax of $11.2 million. The insurance recovery reimburses Esterline for damage and the loss of earnings at the affected facility. The company expects the damaged facility to be back in operation at the end of its fiscal 2008.

Interest expense for the third fiscal quarter of 2007 was $10.8 million compared with $5.6 million a year ago, reflecting increased borrowings to finance acquisitions and working capital requirements.

Year-to-date net earnings were $71.4 million, or $2.74 per diluted share, on sales of $895.9 million, compared with $37.2 million, or $1.44 per diluted share, on sales of $702.0 million last year.

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 and uncertainties detailed in Esterline's public filings with the Securities and Exchange Commission.

ESTERLINE TECHNOLOGIES CORPORATION
Consolidated Statement of Operations (unaudited)
In thousands, except per share amounts

                                 Three months ended      Nine months ended
                                 July 27,   July 28,    July 27,   July 28,
                                   2007       2006        2007       2006
                                --------   --------    --------   --------
Segment Sales
  Avionics & Controls           $121,512   $ 71,191    $305,331   $205,497
  Sensors & Systems               97,418     84,672     281,732    241,319
  Advanced Materials             107,446     92,535     308,837    255,186
                                --------   --------    --------   --------

Net Sales                        326,376    248,398     895,900    702,002

Cost of Sales                    226,734    173,041     622,827    483,047
                                --------   --------    --------   --------
                                  99,642     75,357     273,073    218,955
Expenses
  Selling, general and
   administrative                 55,461     41,560     148,237    118,423
  Research, development and
   engineering                    16,952     14,480      49,585     37,752
                                --------   --------    --------   --------
    Total Expenses                72,413     56,040     197,822    156,175

Other
  Other (income) expense               7         17          24       (445)
  Insurance recovery             (32,857)        --     (37,314)        --
                                --------   --------    --------   --------
    Total Other                  (32,850)        17     (37,290)      (445)
                                --------   --------    --------   --------

Operating Earnings                60,079     19,300     112,541     63,225

  Interest income                   (821)      (393)     (2,110)    (2,250)
  Interest expense                10,790      5,586      25,042     15,881
  Loss on extinguishment
   of debt                            --         --          --      2,156
                                --------   --------    --------   --------
Other Expense, Net                 9,969      5,193      22,932     15,787
                                --------   --------    --------   --------

Income Before Income Taxes        50,110     14,107      89,609     47,438
Income Tax Expense                11,217      2,576      18,096      9,439
                                --------   --------    --------   --------
Income Before Minority Interest   38,893     11,531      71,513     37,999
Minority Interest                    (58)      (308)       (117)      (753)
                                --------   --------    --------   --------

Net Earnings                    $ 38,835   $ 11,223    $ 71,396   $ 37,246
                                ========   ========    ========   ========

Earnings Per Share:
  Basic                         $   1.51   $   .44     $   2.79   $   1.47
  Diluted                       $   1.49   $   .43     $   2.74   $   1.44


Weighted Average Number of
 Shares Outstanding - Basic       25,691    25,448       25,604     25,390

Weighted Average Number of
 Shares Outstanding - Diluted     26,139    25,867       26,022     25,809



Consolidated Balance Sheet (unaudited)
In thousands                                    July 27,        July 28,
                                                  2007            2006
                                              ----------      ----------
Assets
Current Assets
        Cash and cash equivalents             $   83,682      $   38,642
        Cash in escrow                                --           4,345
        Accounts receivable, net                 223,157         167,766
        Inventories                              251,612         185,150
        Income tax refundable                     15,601           3,291
        Deferred income tax benefits              36,893          27,275
        Prepaid expenses                          14,056           8,205
                                              ----------      ----------
                Total Current Assets             625,001         434,674

Property, Plant and Equipment, Net               214,550         170,641

Other Non-Current Assets
        Goodwill                                 604,230         361,968
        Intangibles, net                         371,080         244,265
        Debt issuance costs, net                  10,691           4,638
        Deferred income tax benefits              16,547          17,766
        Other assets                              31,372          25,691
                                              ----------      ----------
                                              $1,873,471      $1,259,643
                                              ==========      ==========

Liabilities and Shareholders' Equity
Current Liabilities
        Accounts payable                      $   83,468      $   68,569
        Accrued liabilities                      164,571         108,031
        Credit facilities                         28,622           5,181
        Current maturities of long-term debt      10,245           4,099
        Federal and foreign income taxes           7,973           2,861
                                              ----------      ----------
                Total Current Liabilities        294,879         188,741

Long-Term Liabilities
        Long-term debt, net of current
         maturities                              555,385         280,775
        Deferred income taxes                    120,991          73,748
        Other liabilities                         42,956          30,374

Commitments and Contingencies                         --              --
Minority Interest                                  2,932           3,466

Shareholders' Equity                             856,328         682,539
                                              ----------      ----------
                                              $1,873,471      $1,259,643
                                              ==========      ==========

Contact Information: Contact: Brian Keogh 425-453-9400