Esterline Corporation F1Q08 (Qtr End 02/01/08) Earnings Call Transcript

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2008-02-28 06:16:00.0

Tags: Esterline Technologies Corp.

Question-and-Answer Session

Operator

Certainly. Anybody who would like to ask a question, you may do so once again by pressing *1 on your touchtone phone. The first question is going to come from Robert Spingarn, Credit Suisse.

Donald - Credit Suisse First Boston

Hi, actually this is Donald. Just a question regarding your organic growth. You cited 25% growth in the quarter, but you also had some movement in the timing of shipments for your countermeasure flares. Can you tell us what your organic growth would have been without those timing changes?

Bob Cremin

Nice pickup there on the countermeasures. As we indicated, we did get the benefit of slightly increased countermeasures there. We didn’t calculate what the delta would have been without it. Off the top of my head, it wasn’t like that was the difference between flat year-over-year or 10 or 15 or maybe even 20. I mean it was a factor that was in the advanced materials segment. We just wanted to indicate that, but I didn’t calculate the precise number.

Donald - Credit Suisse First Boston

Okay. Does that mean anyways that we will see any offset in the future quarters?

Bob Cremin

Well, we are looking at there again. With that business being particularly lumpy, we are anticipating that the second and third quarters are pretty well identified. We don’t have good enough visibility in the fourth quarter.

Donald - Credit Suisse First Boston

Ok. Thank you.

Operator

Thank you. The next question will come from J.B. Groh of D.A. Davidson. Please go ahead. (Pause.) Mr. Groh? (Pause.) Not hearing from Mr. Groh. Moving on.

Operator

Sorry. In that case, we will take Howard Rubel of Jefferies.

Howard Rubel – Jefferies & Company

It’s Howard Rubel of Jefferies. Thank you very much. Let’s go back to your gross margin. I think it is very nice the way you started the year out, Bob. Could you talk a little bit more about some of the initiatives that you have underway to set this as the floor as opposed to the ceiling?

Bob George

Sure. Boy, I can talk at length about that. Let me just pick off some major items in each of the 3 segments to give you some color. When you go over in Avionics, we have seen significant improvement in our controls group, and it really is increased shipment levels and improved margins on our switch product lines—the Mason brand and the JAMCO brand, and JAMCO, if you remember, that was an acquisition, and the margins compared to a year ago are literally up about 700 basis points.

 

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