##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Amendment
No. 1
 FORM 10-Q/A
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 29, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-6357
 ESTERLINE TECHNOLOGIES CORPORATION
  Delaware
    
    13-2595091(State or other Jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 500 108th Avenue N.E., Bellevue, Washington 98004
 425/453-9400
  Yes
    
    þ
    
    
    
    No
    
    o
  Yes
    
    þ
    
    
    
    No
    
    o
  Yes
    
    o
    
    
    
    No
    
    þ




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##### Table of Contents



Explanatory Note
    All information contained in this Amendment is as of the original filing date of the Form 10-Q for
the three and six month periods ended April 29, 2005 and does not reflect any subsequent
information or events other than as described above. We are not required to update and have not
updated the forward-looking statements previously included in the Form 10-Q filed on June 3, 2005
for events or operations subsequent to June 3, 2005.
 2




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TABLE OF CONTENTS  PART 1  FINANCIAL INFORMATIONItem 1. Financial StatementsCONSOLIDATED BALANCE SHEETCONSOLIDATED STATEMENT OF OPERATIONSCONSOLIDATED STATEMENT OF CASH FLOWSNOTES TO CONSOLIDATED FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURESEXHIBIT 11EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2 
 
 
 PART 1  FINANCIAL INFORMATION
 Item 1. Financial Statements
 
 April 29,
    
    
    October 29,2005
    
    
    2004(Restated)
    
    
    (Restated)(Unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    137,704
    
    
    $
    29,479Cash in escrow
    
    
    7,537
    
    
    
    8,511Short-term investments
    
    
    45,486
    
    
    
    Accounts receivable, net of allowances
of $4,163 and $3,687
    
    
    128,212
    
    
    
    132,206InventoriesRaw materials and purchased parts
    
    
    67,288
    
    
    
    58,736Work in process
    
    
    46,324
    
    
    
    43,326Finished goods
    
    
    18,485
    
    
    
    16,992132,097
    
    
    
    119,054Deferred income tax benefits
    
    
    24,601
    
    
    
    23,499Prepaid expenses
    
    
    8,733
    
    
    
    9,441Other current assets
    
    
    288
    
    
    
    435Total Current Assets
    
    
    484,658
    
    
    
    322,625Property, Plant and Equipment
    
    
    273,817
    
    
    
    275,437Accumulated depreciation
    
    
    136,468
    
    
    
    130,302137,349
    
    
    
    145,135Other Non-Current AssetsGoodwill
    
    
    246,032
    
    
    
    247,817Intangibles, net
    
    
    166,593
    
    
    
    169,876Debt issuance costs, net of accumulated
amortization of $1,265 and $928
    
    
    5,481
    
    
    
    5,818Deferred income tax benefits
    
    
    9,986
    
    
    
    11,216Other assets
    
    
    28,266
    
    
    
    32,861$
    1,078,365
    
    
    $
    935,348
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##### Table of Contents



April 29,
    
    
    October 29,2005
    
    
    2004(Restated)
    
    
    (Restated)(Unaudited)LIABILITIES AND SHAREHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    42,387
    
    
    $
    37,867Accrued liabilities
    
    
    95,388
    
    
    
    97,038Credit facilities
    
    
    2,567
    
    
    
    6,977Current maturities of long-term debt
    
    
    30,901
    
    
    
    1,031Federal and foreign income taxes
    
    
    7,213
    
    
    
    6,678Total Current Liabilities
    
    
    178,456
    
    
    
    149,591Long-Term LiabilitiesLong-term debt, net of current maturities
    
    
    217,722
    
    
    
    249,056Deferred income taxes
    
    
    45,280
    
    
    
    43,443Other liabilities
    
    
    26,185
    
    
    
    29,852Commitments and Contingencies
    
    
    
    
    
    
    Minority Interest
    
    
    2,427
    
    
    
    2,378Shareholders EquityCommon stock, par value $.20 per share,
authorized 60,000,000 shares, issued and
outstanding 25,154,109 and 21,319,698 shares
    
    
    5,031
    
    
    
    4,264Additional paid-in capital
    
    
    255,717
    
    
    
    144,879Retained earnings
    
    
    318,118
    
    
    
    287,344Accumulated other comprehensive income
    
    
    29,429
    
    
    
    24,541Total Shareholders Equity
    
    
    608,295
    
    
    
    461,028$
    1,078,365
    
    
    $
    935,348
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Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Net Sales
    
    $
    211,592
    
    
    $
    146,474
    
    
    $
    401,384
    
    
    $
    275,840Cost of Sales
    
    
    143,054
    
    
    
    97,890
    
    
    
    274,746
    
    
    
    188,66468,538
    
    
    
    48,584
    
    
    
    126,638
    
    
    
    87,176ExpensesSelling, general & administrative
    
    
    35,837
    
    
    
    25,315
    
    
    
    66,445
    
    
    
    57,347Research, development &
engineering
    
    
    9,866
    
    
    
    6,015
    
    
    
    19,113
    
    
    
    11,438Total Expenses
    
    
    45,703
    
    
    
    31,330
    
    
    
    85,558
    
    
    
    68,785Operating Earnings From
Continuing Operations
    
    
    22,835
    
    
    
    17,254
    
    
    
    41,080
    
    
    
    18,391Other (income) expense
    
    
    28
    
    
    
    (19
    )
    
    
    66
    
    
    
    (575
    )Interest income
    
    
    (1,025
    )
    
    
    (284
    )
    
    
    (1,560
    )
    
    
    (597
    )Interest expense
    
    
    4,097
    
    
    
    4,163
    
    
    
    8,779
    
    
    
    8,455Other Expense, Net
    
    
    3,100
    
    
    
    3,860
    
    
    
    7,285
    
    
    
    7,283Income From Continuing Operations
Before Income Taxes
    
    
    19,735
    
    
    
    13,394
    
    
    
    33,795
    
    
    
    11,108Income Tax Expense
    
    
    5,974
    
    
    
    3,968
    
    
    
    9,938
    
    
    
    1,450Income From Continuing Operations
Before Minority Interest
    
    
    13,761
    
    
    
    9,426
    
    
    
    23,857
    
    
    
    9,658Minority Interest
    
    
    (35
    )
    
    
    
    
    
    
    (48
    )
    
    
    Income From Continuing Operations
    
    
    13,726
    
    
    
    9,426
    
    
    
    23,809
    
    
    
    9,658Income (Loss) From Discontinued
Operations, Net of Tax
    
    
    (562
    )
    
    
    960
    
    
    
    6,965
    
    
    
    1,134Net Earnings
    
    $
    13,164
    
    
    $
    10,386
    
    
    $
    30,774
    
    
    $
    10,792
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Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Earnings (Loss) Per Share  Basic:Continuing operations
    
    $
    .55
    
    
    $
    .45
    
    
    $
    .97
    
    
    $
    .46Discontinued operations
    
    
    (.03
    )
    
    
    .04
    
    
    
    .28
    
    
    
    .05Earnings per share  basic
    
    $
    .52
    
    
    $
    .49
    
    
    $
    1.25
    
    
    $
    .51Earnings (Loss) Per Share  Diluted:Continuing operations
    
    $
    .54
    
    
    $
    .44
    
    
    $
    .95
    
    
    $
    .45Discontinued operations
    
    
    (.02
    )
    
    
    .04
    
    
    
    .28
    
    
    
    .05Earnings per share  diluted
    
    $
    .52
    
    
    $
    .48
    
    
    $
    1.23
    
    
    $
    .50
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Six Months EndedApril 29,
    
    
    April 30,2005
    
    
    2004(Restated)
    
    
    (Restated)Cash Flows Provided (Used) by Operating ActivitiesNet earnings
    
    $
    30,774
    
    
    $
    10,792Minority interest
    
    
    49
    
    
    
    Depreciation and amortization
    
    
    19,835
    
    
    
    14,936Deferred income taxes
    
    
    1,830
    
    
    
    (788
    )Stock-based compensation
    
    
    680
    
    
    
    1,460Gain on sale of discontinued operations
    
    
    (9,456
    )
    
    
    Loss on sale of building
    
    
    59
    
    
    
    Gain on sale of land
    
    
    
    
    
    
    (577
    )Working capital changes, net of effect of acquisitionsAccounts receivable
    
    
    3,040
    
    
    
    14,482Inventories
    
    
    (14,535
    )
    
    
    (6,392
    )Prepaid expenses
    
    
    773
    
    
    
    (1,933
    )Accounts payable
    
    
    4,214
    
    
    
    (1,457
    )Accrued liabilities
    
    
    754
    
    
    
    (203
    )Federal and foreign income taxes
    
    
    472
    
    
    
    2,801Other liabilities
    
    
    1,300
    
    
    
    Other, net
    
    
    (2,009
    )
    
    
    (435
    )37,780
    
    
    
    32,686Cash Flows Provided (Used) by Investing ActivitiesPurchases of capital assets
    
    
    (9,342
    )
    
    
    (11,588
    )Proceeds from sale of discontinued operations
    
    
    21,421
    
    
    
    Proceeds from sale of building
    
    
    2,319
    
    
    
    Proceeds from sale of land
    
    
    
    
    
    
    1,179Capital dispositions
    
    
    146
    
    
    
    433Purchase of short-term investments
    
    
    (45,486
    )
    
    
    (6,238
    )Acquisitions of businesses, net of cash acquired
    
    
    (3,346
    )
    
    
    (6,633
    )(34,288
    )
    
    
    (22,847
    )
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Six Months EndedApril 29,
    
    
    April 30,2005
    
    
    2004(Restated)
    
    
    (Restated)Cash Flows Provided (Used) by Financing ActivitiesProceeds provided by stock issuance under
employee stock plans
    
    
    2,435
    
    
    
    716Proceeds provided by sale of common stock
    
    
    108,490
    
    
    
    Net change in credit facilities
    
    
    (4,424
    )
    
    
    564Repayment of long-term obligations
    
    
    (1,474
    )
    
    
    (31,265
    )Debt and other issuance costs
    
    
    
    
    
    
    (179
    )105,027
    
    
    
    (30,164
    )Effect of Foreign Exchange Rates on Cash
    
    
    (294
    )
    
    
    397Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    108,225
    
    
    
    (19,928
    )Cash and Cash Equivalents  Beginning of Period
    
    
    29,479
    
    
    
    131,363Cash and Cash Equivalents  End of Period
    
    $
    137,704
    
    
    $
    111,435Supplemental Cash Flow InformationCash Paid for Interest
    
    $
    7,966
    
    
    $
    9,265Cash Paid for Taxes
    
    
    8,446
    
    
    
    562
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1.
    
    The consolidated balance sheet as of April 29, 2005, the consolidated statement of operations
for the three and six month periods ended April 29, 2005 and April 30, 2004, and the
consolidated statement of cash flows for the six month periods ended April 29, 2005 and April
30, 2004 are unaudited, but in the opinion of management, all of the necessary adjustments,
consisting of normal recurring accruals, have been made to present fairly the financial
statements referred to above in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the above statements do not include all of the footnotes
required for complete financial statements. The results of operations and cash flows for the
interim periods presented are not necessarily indicative of results that can be expected for
the full year.
 2.
    
    The notes to the consolidated financial statements in the Companys Annual Report on Form
10-K/A for the fiscal year ended October 29, 2004 provide a summary of significant accounting
policies and additional financial information that should be read in conjunction with this
Form 10-Q/A.
 3.
    
    The timing of the Companys revenues is impacted by the purchasing patterns of customers and,
as a result, revenues are not generated evenly throughout the year. Moreover, the Companys
first fiscal quarter, November through January, includes significant holiday vacation periods
in both Europe and North America.
 4.
    
    Basic earnings per share is computed on the basis of the weighted average number of shares
outstanding during the period. Diluted earnings per share includes the dilutive effect of
stock options. The weighted average number of shares outstanding used to compute basic
earnings per share was 25,120,000 and 21,167,000 for the three month periods ended April 29,
2005 and April 30, 2004, respectively. The weighted average number of shares outstanding used
to compute diluted earnings per share was 25,484,000 and 21,495,000 for the three month
periods ended April 29, 2005 and April 30, 2004, respectively. The weighted average number of shares outstanding used to compute basic earnings per share was 24,577,000 and 21,133,000 for
the six month periods ended April 29, 2005, and April 30, 2004, respectively. The weighted
average number of shares outstanding used to compute diluted earnings per share was 24,953,000
and 21,466,000 for the six month periods ended April 29, 2005 and April 30, 2004,
respectively.
 5.
    
    Restatement of Stock Option AccountingThe Company has restated its financial statements to account for the Companys non-qualified
stock option plan using variable accounting because grantees were permitted to exercise stock
options by surrendering stock under the grant to pay for the exercise price and statutory taxes.
The Company previously accounted for these stock option grants as fixed
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awards under APB No. 25. As a result, the Company recorded additional stock-based compensation expense under the
variable method of accounting and the related income tax adjustments. These adjustments are
reflected in the financial statements with the cumulative adjustment at October 31, 2003
resulting in an increase in additional paid in capital of $21.0 million, a decrease of retained
earnings of $18.8 million and increase in deferred income taxes of $2.2 million.
 A summary of the significant effect of the restatement for the three and six months ended in the
period ended April 29, 2005 and April 2004 are as follows:
  Three Months Ended
    
    
    Three Months EndedApril 29, 2005
    
    
    April 30, 2004As
    
    
    As
    
    
    As
    
    
    AsReported
    
    
    Restated
    
    
    Reported
    
    
    RestatedSelling, General and
Administrative Expenses
    
    $
    34,455
    
    
    $
    35,837
    
    
    $
    26,027
    
    
    $
    25,315Income From Continuing Operations
    
    
    14,667
    
    
    
    13,726
    
    
    
    8,952
    
    
    
    9,426Net Income
    
    
    14,105
    
    
    
    13,164
    
    
    
    9,912
    
    
    
    10,386Earnings Per Share  BasicContinuing operations
    
    $
    .58
    
    
    $
    .55
    
    
    $
    .42
    
    
    $
    .45Earnings per share  basic
    
    
    .56
    
    
    
    .52
    
    
    
    .47
    
    
    
    .49Earnings Per Share  DilutedContinuing operations
    
    $
    .58
    
    
    $
    .54
    
    
    $
    .42
    
    
    $
    .44Earnings per share  diluted
    
    
    .55
    
    
    
    .52
    
    
    
    .46
    
    
    
    .48Deferred Income Tax Benefits
    
    $
    22,324
    
    
    $
    24,601
    
    
    $
    15,258
    
    
    $
    17,367Shareholders Equity
    
    
    606,018
    
    
    
    608,295
    
    
    
    411,979
    
    
    
    414,088
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Six Months Ended
    
    
    Six Months EndedApril 29, 2005
    
    
    April 30, 2004As
    
    
    As
    
    
    As
    
    
    AsReported
    
    
    Restated
    
    
    Reported
    
    
    RestatedSelling, General and
Administrative Expenses
    
    $
    65,765
    
    
    $
    66,445
    
    
    $
    55,887
    
    
    $
    57,347Income From Continuing Operations
    
    
    24,308
    
    
    
    23,809
    
    
    
    10,656
    
    
    
    9,658Net Income
    
    
    31,273
    
    
    
    30,774
    
    
    
    11,790
    
    
    
    10,792Earnings Per Share  BasicContinuing operations
    
    $
    .99
    
    
    $
    .97
    
    
    $
    .50
    
    
    $
    .46Earnings per share  basic
    
    
    1.27
    
    
    
    1.25
    
    
    
    .56
    
    
    
    .51Net Income Per ShareContinuing operations
    
    $
    .97
    
    
    $
    .95
    
    
    $
    .50
    
    
    $
    .45Earnings per share  diluted
    
    
    1.25
    
    
    
    1.23
    
    
    
    .55
    
    
    
    .50Deferred Income Tax Benefits
    
    $
    22,324
    
    
    $
    24,601
    
    
    $
    15,258
    
    
    $
    17,367Shareholders Equity
    
    
    606,018
    
    
    
    608,295
    
    
    
    411,979
    
    
    
    414,088
 6.
    
    In December 2004, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123R, Share-Based Payment (Statement No. 123R), which is effective
for the Company no later than the beginning of its first fiscal quarter of 2006. Management
intends to comply with the standard at the beginning of our first fiscal quarter of 2006;
however, management does not believe that the impact would be materially different from the
pro forma disclosures under Note 10.7.
    
    The Companys comprehensive income is as follows:
  Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Net Earnings
    
    $
    13,164
    
    
    $
    10,386
    
    
    $
    30,774
    
    
    $
    10,792Change in Fair Value of Derivative
Financial Instruments, Net of Tax
    
    
    612
    
    
    
    (170
    )
    
    
    1,435
    
    
    
    490Foreign Currency Translation Adj.
    
    
    (738
    )
    
    
    (6,426
    )
    
    
    3,453
    
    
    
    4,561Comprehensive Income
    
    $
    13,038
    
    
    $
    3,790
    
    
    $
    35,662
    
    
    $
    15,843
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8.
    
    On January 28, 2005, the Company completed the sale of the outstanding stock of its wholly
owned subsidiary Fluid Regulators Corporation (Fluid Regulators), which was included in the
Companys Sensors & Systems segment, for approximately $23.7 million. As a result of the
sale, the Company recorded a gain of $7.0 million, net of tax of $2.4 million. Sales and net
earnings were $3.5 million and $0.3 million, respectively, during the three month period ended
April 30, 2004. Sales and net earnings were $3.4 million and $0.3 million, respectively,
during the six month period ended April 29, 2005 and $6.6 million and $0.7 million,
respectively, during the six month period ended April 30, 2004.On July 25, 2002, the Board of Directors adopted a formal plan for the sale of the assets and
operations of its former Automation segment. On July 23, 2003, the Company sold the assets of
its Excellon Automation subsidiary. On August 31, 2004, the Company sold the stock of W. A.
Whitney for $10.0 million in cash. Upon the final disposition of its discontinued Automation
operations in the fourth fiscal quarter of 2004, the Company recorded an $8.0 million gain, net
of $4.5 million in tax, including the reversal of estimated reserves which were recognizable
upon sale of the business. Sales in the Automation segment were $5.7 million and $10.3 million
for the three month and six month period ended April 30, 2004, respectively.On May 13, 2005, management closed a small unit in the Companys Other segment and incurred $0.4
million in severance, net of $0.2 million in tax, in the second quarter of fiscal 2005.The dispositions and closure described above are reported as discontinued operations and the
consolidated financial statements for all prior periods have been adjusted to reflect this
presentation.9.
    
    The effective tax rate for the first six months of fiscal 2005 was 29.4%, compared with 30.2%
(before a $1.9 million reduction of previously estimated tax liabilities) for the first six
months of fiscal 2004. The effective tax rate differed from the statutory rate, as both years
benefited from various tax credits and benefits. On February 4, 2004, the Company received a
Notice of Proposed Adjustment (NOPA) from the Internal Revenue Service covering the audit of
research and development tax credits for fiscal years 1997 through 1999. As a result of the
NOPA and the expectation of a similar result for fiscal years 2000 through 2003, management
revised the Companys estimated liability for income taxes as of January 30, 2004. The
revision resulted in a $1.9 million reduction of previously estimated tax liabilities.10.
    
    The Company accounts for its stock-based compensation plans in accordance with Accounting
Principles Board Opinion No. 25. The variable method of accounting is used to account for
stock option plans where the option holders are permitted to exercise options by surrendering
the option subject to the grant in payment of the exercise price of the option and the related
statutory taxes. No compensation cost is recognized at the grant date because the exercise
price of all stock option grants is equal to the market price of the Companys common stock as
of the date of the grant. However, subsequent changes in the market price of the Companys
common stock to the date of exercise or forfeiture results in a change in
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measure of compensation cost. The following table illustrates the effect on net income and
earnings per share as if the Company had applied the fair value recognition provisions of
Statement of Financial Accounting Standards No. 123 (FAS 123 Adjustment), Accounting for
Stock-Based Compensation (Statement No. 123):
  Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)Net earnings, as reported
    
    $
    13,164
    
    
    $
    10,386
    
    
    $
    30,774
    
    
    $
    10,792Stock-based compensation costs,
net of income tax included in
net earnings as reported
    
    
    911
    
    
    
    (476
    )
    
    
    457
    
    
    
    970Stock-based compensation cost,
net of income tax under the fair
value method of accounting
    
    
    (476
    )
    
    
    (417
    )
    
    
    (917
    )
    
    
    (835
    )Pro forma net earnings
    
    $
    13,599
    
    
    $
    9,493
    
    
    $
    30,314
    
    
    $
    10,927Basic earnings per share, as reported
    
    $
    .52
    
    
    $
    .49
    
    
    $
    1.25
    
    
    $
    .51Add (deduct): FAS 123 Adjustment
    
    
    .02
    
    
    
    (.04
    )
    
    
    (.02
    )
    
    
    .01Pro forma basic earnings per share
    
    $
    .54
    
    
    $
    .45
    
    
    $
    1.23
    
    
    $
    .52Diluted earnings per share,
as reported
    
    $
    .52
    
    
    $
    .48
    
    
    $
    1.23
    
    
    $
    .50Add (deduct): FAS 123 Adjustment
    
    
    .01
    
    
    
    (.04
    )
    
    
    (.02
    )
    
    
    .01Pro forma diluted earnings per share
    
    $
    .53
    
    
    $
    .44
    
    
    $
    1.21
    
    
    $
    .51
 13




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##### Table of Contents



11.
    
    The Companys pension plans principally include a U.S. pension plan maintained by Esterline
and U.S. and non-U.S. plans maintained by Leach Holding Corporation. Components of net
periodic pension cost consisted of the following:
 (In
thousands)
    
    Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004Components of Net Periodic Pension CostService cost
    
    $
    1,065
    
    
    $
    906
    
    
    $
    2,133
    
    
    $
    1,814Interest cost
    
    
    2,352
    
    
    
    1,729
    
    
    
    5,720
    
    
    
    3,461Expected return on plan assets
    
    
    (2,955
    )
    
    
    (2,236
    )
    
    
    (6,753
    )
    
    
    (4,477
    )Amortization of prior
service cost
    
    
    5
    
    
    
    4
    
    
    
    9
    
    
    
    8Amortization of actuarial loss
    
    
    165
    
    
    
    148
    
    
    
    335
    
    
    
    297Net Periodic Cost
    
    $
    632
    
    
    $
    551
    
    
    $
    1,444
    
    
    $
    1,103
 12.
    
    Segment information:Business segment information for continuing operations includes the segments of Avionics &
Controls, Sensors & Systems and Advanced Materials.
 (In
thousands)
    
    Three Months Ended
    
    
    Six Months EndedApril 29,
    
    
    April 30,
    
    
    April 29,
    
    
    April 30,2005
    
    
    2004
    
    
    2005
    
    
    2004(Restated)
    
    
    (Restated)
    
    
    (Restated)
    
    
    (Restated)SalesAvionics & Controls
    
    $
    64,990
    
    
    $
    52,292
    
    
    $
    125,845
    
    
    $
    98,608Sensors & Systems
    
    
    84,541
    
    
    
    39,772
    
    
    
    158,915
    
    
    
    74,424Advanced Materials
    
    
    62,061
    
    
    
    54,410
    
    
    
    116,624
    
    
    
    102,808Total Sales
    
    $
    211,592
    
    
    $
    146,474
    
    
    $
    401,384
    
    
    $
    275,840Income from Continuing OperationsAvionics & Controls
    
    $
    9,204
    
    
    $
    8,782
    
    
    $
    18,603
    
    
    $
    15,116Sensors & Systems
    
    
    11,166
    
    
    
    4,895
    
    
    
    17,563
    
    
    
    492Advanced Materials
    
    
    8,747
    
    
    
    7,665
    
    
    
    15,228
    
    
    
    11,304Segment Earnings
    
    
    29,117
    
    
    
    21,342
    
    
    
    51,394
    
    
    
    26,912Corporate expense
    
    
    (6,282
    )
    
    
    (4,088
    )
    
    
    (10,314
    )
    
    
    (8,521
    )Other income (expense)
    
    
    (28
    )
    
    
    19
    
    
    
    (66
    )
    
    
    575Interest income
    
    
    1,025
    
    
    
    284
    
    
    
    1,560
    
    
    
    597Interest expense
    
    
    (4,097
    )
    
    
    (4,163
    )
    
    
    (8,779
    )
    
    
    (8,455
    )$
    19,735
    
    
    $
    13,394
    
    
    $
    33,795
    
    
    $
    11,108
 14




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##### Table of Contents



13.
    
    On December 1, 2003, the Company acquired all of the outstanding capital stock of AVISTA,
Incorporated (AVISTA), a $10 million (sales) Wisconsin-based developer of embedded avionics
software, for approximately $6.5 million in cash. A purchase price adjustment was paid to the
seller in December 2004 and an additional amount will be paid in December 2005 contingent upon
the achievement of financial results as defined in the Stock Purchase Agreement. The December
2004 purchase price adjustment was approximately $3.3 million. AVISTA provides a software
engineering center to support the Companys customers with such applications as primary flight
displays, flight management systems, air data computers and engine control systems. AVISTA is
included in the Avionics & Controls segment and the results of its operations were included from
the effective date of the acquisition. Revenues are largely fees charged for software
engineering services.
 14.
    
    On November 24, 2004, the Company completed a public offering of 3.7 million shares of common
stock, including shares sold under the underwriters over-allotment option, priced at $31.25
per share, generating net proceeds of approximately $109 million, of which $5.0 million was
used to pay off existing credit facilities. The funds provide additional financial resources
for acquisitions and general corporate purposes. The Company issued 154,411 and 105,954
shares under its employee stock plans during the six month periods ended April 29, 2005 and
April 30, 2004, respectively.
 15.
    
    The following schedules set forth condensed consolidating financial information as required
by Rule 3-10 of Securities and Exchange Commission Regulation S-X for the periods ended April
29, 2005, and April 30, 2004, for (a) Esterline Technologies Corporation (the Parent); (b) on
a combined basis, the subsidiary guarantors (Guarantor Subsidiaries) of the Senior
Subordinated Notes which include Advanced Input Devices, Inc., Amtech Automated Manufacturing
Technology, Angus Electronics Co., Armtec Countermeasures Co., Armtec Defense Products Co.,
Auxitrol Co., AVISTA, Incorporated, Boyar-Schultz Corporation, BVR Technologies Co., Equipment
Sales Co., EA Technologies Corporation, Esterline Technologies Holdings Limited, H.A. Sales
Co., Hauser Inc., Hytek Finishes Co., Janco Corporation, Kirkhill-TA Co., Korry Electronics
Co., Leach Holding Corporation, Leach International Corporation, Leach Technology Group, Inc.,
Mason Electric Co., MC Tech Co., Memtron Technologies Co., Norwich Aero Products, Inc.,
Pressure Systems, Inc., Pressure Systems International, Inc., Surftech Finishes Co., UMM
Electronics Inc., and (c) on a combined basis, the subsidiary non-guarantors (Non-Guarantor
Subsidiaries), which include Advanced Input Devices Ltd. (England), Auxitrol S.A., Auxitrol
Technologies S.A., Auxitrol Asia PTE Ltd., Esterline Input Devices Asia Ltd., Esterline Input
Devices Ltd. (China), Esterline Technologies DK Aps (Denmark), Esterline Technologies Ltd.
(England), Esterline Technologies Ltd. (Hong Kong), Excellon Europa GmbH, Excellon France
S.A.R.L., Guizhou Leach-Tianyi Aviation Electrical Company Ltd. (China), Leach International
Asia-Pacific Ltd. (Hong Kong), Leach International Europe S.A. (France), Leach International
Germany GmbH (Germany), Leach International Mexico S. de R.L. de C.V. (Mexico), Leach
International U.K. (England), LRE Medical GmbH (Germany), Muirhead Aerospace Ltd., Norcroft
Dynamics Ltd., Pressure Systems International Ltd., TA Mfg. Limited, Weston Aero Ltd.
(England), and Weston Aerospace Ltd. (England). The guarantor subsidiaries are direct
 15




---



##### Table of Contents



and indirect wholly-owned subsidiaries of Esterline Technologies and have fully and
unconditionally, jointly and severally, guaranteed the Senior Subordinated Notes.
 16




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalAssetsCurrent AssetsCash and cash equivalents
    
    $
    100,208
    
    
    $
    1,592
    
    
    $
    35,904
    
    
    $
    
    
    
    $
    137,704Cash in escrow
    
    
    7,537
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,537Short-term investments
    
    
    45,486
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,486Accounts receivable, net
    
    
    672
    
    
    
    73,433
    
    
    
    54,107
    
    
    
    
    
    
    
    128,212Inventories
    
    
    
    
    
    
    85,101
    
    
    
    46,996
    
    
    
    
    
    
    
    132,097Deferred income tax benefits
    
    
    39,401
    
    
    
    
    
    
    
    (14,800
    )
    
    
    
    
    
    
    24,601Prepaid expenses
    
    
    246
    
    
    
    5,427
    
    
    
    3,060
    
    
    
    
    
    
    
    8,733Other current assets
    
    
    
    
    
    
    288
    
    
    
    
    
    
    
    
    
    
    
    288Total Current Assets
    
    
    193,550
    
    
    
    165,841
    
    
    
    125,267
    
    
    
    
    
    
    
    484,658Property, Plant & Equipment, Net
    
    
    2,367
    
    
    
    93,383
    
    
    
    41,599
    
    
    
    
    
    
    
    137,349Goodwill
    
    
    
    
    
    
    172,415
    
    
    
    73,617
    
    
    
    
    
    
    
    246,032Intangibles, Net
    
    
    141
    
    
    
    74,258
    
    
    
    92,194
    
    
    
    
    
    
    
    166,593Debt Issuance Costs, Net
    
    
    5,481
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,481Deferred Income Tax Benefits
    
    
    9,986
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,986Other Assets
    
    
    4,108
    
    
    
    18,407
    
    
    
    5,751
    
    
    
    
    
    
    
    28,266Amounts Due (To) From
Subsidiaries
    
    
    126,514
    
    
    
    74,432
    
    
    
    
    
    
    
    (200,946
    )
    
    
    Investment in Subsidiaries
    
    
    590,033
    
    
    
    
    
    
    
    
    
    
    
    (590,033
    )
    
    
    Total Assets
    
    $
    932,180
    
    
    $
    598,736
    
    
    $
    338,428
    
    
    $
    (790,979
    )
    
    $
    1,078,365
 17




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##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalLiabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    235
    
    
    $
    16,958
    
    
    $
    25,194
    
    
    $
    
    
    
    $
    42,387Accrued liabilities
    
    
    29,348
    
    
    
    40,925
    
    
    
    25,115
    
    
    
    
    
    
    
    95,388Credit facilities
    
    
    
    
    
    
    
    
    
    
    2,567
    
    
    
    
    
    
    
    2,567Current maturities of
long-term debt
    
    
    30,000
    
    
    
    
    
    
    
    901
    
    
    
    
    
    
    
    30,901Federal and foreign
income taxes
    
    
    (1,841
    )
    
    
    80
    
    
    
    8,974
    
    
    
    
    
    
    
    7,213Total Current Liabilities
    
    
    57,742
    
    
    
    57,963
    
    
    
    62,751
    
    
    
    
    
    
    
    178,456Long-Term Debt, Net
    
    
    215,767
    
    
    
    
    
    
    
    1,955
    
    
    
    
    
    
    
    217,722Deferred Income Taxes
    
    
    44,984
    
    
    
    
    
    
    
    296
    
    
    
    
    
    
    
    45,280Other Liabilities
    
    
    5,392
    
    
    
    13,884
    
    
    
    6,909
    
    
    
    
    
    
    
    26,185Amounts Due To (From)
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    180,140
    
    
    
    (180,140
    )
    
    
    Minority Interest
    
    
    
    
    
    
    
    
    
    
    2,427
    
    
    
    
    
    
    
    2,427Shareholders Equity
    
    
    608,295
    
    
    
    526,889
    
    
    
    83,950
    
    
    
    (610,839
    )
    
    
    608,295Total
Liabilities and Shareholders Equity
    
    $
    932,180
    
    
    $
    598,736
    
    
    $
    338,428
    
    
    $
    (790,979
    )
    
    $
    1,078,365
 18




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##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNet Sales
    
    $
    
    
    
    $
    141,165
    
    
    $
    75,528
    
    
    $
    (5,101
    )
    
    $
    211,592Cost of Sales
    
    
    
    
    
    
    97,380
    
    
    
    50,775
    
    
    
    (5,101
    )
    
    
    143,054
    
    
    
    43,785
    
    
    
    24,753
    
    
    
    
    
    
    
    68,538ExpensesSelling, general
and administrative
    
    
    
    
    
    
    24,143
    
    
    
    11,694
    
    
    
    
    
    
    
    35,837Research, development
and engineering
    
    
    
    
    
    
    4,191
    
    
    
    5,675
    
    
    
    
    
    
    
    9,866Total Expenses
    
    
    
    
    
    
    28,334
    
    
    
    17,369
    
    
    
    
    
    
    
    45,703Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    15,451
    
    
    
    7,384
    
    
    
    
    
    
    
    22,835Other (income) expense
    
    
    50
    
    
    
    16
    
    
    
    (38
    )
    
    
    
    
    
    
    28Interest income
    
    
    (4,027
    )
    
    
    (571
    )
    
    
    (666
    )
    
    
    4,239
    
    
    
    (1,025
    )Interest expense
    
    
    4,492
    
    
    
    1,033
    
    
    
    2,811
    
    
    
    (4,239
    )
    
    
    4,097Other Expense, Net
    
    
    515
    
    
    
    478
    
    
    
    2,107
    
    
    
    
    
    
    
    3,100Income (Loss) from Continuing
Operations Before Taxes
    
    
    (515
    )
    
    
    14,973
    
    
    
    5,277
    
    
    
    
    
    
    
    19,735Income Tax Expense (Benefit)
    
    
    (165
    )
    
    
    4,470
    
    
    
    1,669
    
    
    
    
    
    
    
    5,974Income (Loss) From
Continuing Operations
Before Minority Interest
    
    
    (350
    )
    
    
    10,503
    
    
    
    3,608
    
    
    
    
    
    
    
    13,761Minority Interest
    
    
    
    
    
    
    
    
    
    
    (35
    )
    
    
    
    
    
    
    (35
    )Income (Loss) From
Continuing Operations
    
    
    (350
    )
    
    
    10,503
    
    
    
    3,573
    
    
    
    
    
    
    
    13,726Loss From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    (562
    )
    
    
    
    
    
    
    
    
    
    
    (562
    )Equity in Net Income of
Consolidated Subsidiaries
    
    
    13,514
    
    
    
    
    
    
    
    
    
    
    
    (13,514
    )
    
    
    Net Income (Loss)
    
    $
    13,164
    
    
    $
    9,941
    
    
    $
    3,573
    
    
    $
    (13,514
    )
    
    $
    13,164
 19




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##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNet Sales
    
    $
    
    
    
    $
    266,494
    
    
    $
    143,846
    
    
    $
    (8,956
    )
    
    $
    401,384Cost of Sales
    
    
    
    
    
    
    187,164
    
    
    
    96,538
    
    
    
    (8,956
    )
    
    
    274,746
    
    
    
    79,330
    
    
    
    47,308
    
    
    
    
    
    
    
    126,638ExpensesSelling, general
and administrative
    
    
    
    
    
    
    42,422
    
    
    
    24,023
    
    
    
    
    
    
    
    66,445Research, development
and engineering
    
    
    
    
    
    
    7,722
    
    
    
    11,391
    
    
    
    
    
    
    
    19,113Total Expenses
    
    
    
    
    
    
    50,144
    
    
    
    35,414
    
    
    
    
    
    
    
    85,558Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    29,186
    
    
    
    11,894
    
    
    
    
    
    
    
    41,080Other expense
    
    
    50
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    66Interest income
    
    
    (7,580
    )
    
    
    (1,696
    )
    
    
    (1,274
    )
    
    
    8,990
    
    
    
    (1,560
    )Interest expense
    
    
    8,981
    
    
    
    2,565
    
    
    
    6,223
    
    
    
    (8,990
    )
    
    
    8,779Other Expense, Net
    
    
    1,451
    
    
    
    885
    
    
    
    4,949
    
    
    
    
    
    
    
    7,285Income (Loss) from Continuing
Operations Before Taxes
    
    
    (1,451
    )
    
    
    28,301
    
    
    
    6,945
    
    
    
    
    
    
    
    33,795Income Tax Expense (Benefit)
    
    
    (426
    )
    
    
    8,278
    
    
    
    2,086
    
    
    
    
    
    
    
    9,938Income (Loss) From
Continuing Operations
Before Minority Interest
    
    
    (1,025
    )
    
    
    20,023
    
    
    
    4,859
    
    
    
    
    
    
    
    23,857Minority Interest
    
    
    
    
    
    
    
    
    
    
    (48
    )
    
    
    
    
    
    
    (48
    )Income (Loss) From
Continuing Operations
    
    
    (1,025
    )
    
    
    20,023
    
    
    
    4,811
    
    
    
    
    
    
    
    23,809Income From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    6,965
    
    
    
    
    
    
    
    
    
    
    
    6,965Equity in Net Income of
Consolidated Subsidiaries
    
    
    31,799
    
    
    
    
    
    
    
    
    
    
    
    (31,799
    )
    
    
    Net Income (Loss)
    
    $
    30,774
    
    
    $
    26,988
    
    
    $
    4,811
    
    
    $
    (31,799
    )
    
    $
    30,774
 20




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##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalCash Flows Provided (Used) by Operating ActivitiesNet earnings (loss)
    
    $
    30,774
    
    
    $
    26,988
    
    
    $
    4,811
    
    
    $
    (31,799
    )
    
    $
    30,774Minority interest
    
    
    
    
    
    
    
    
    
    
    49
    
    
    
    
    
    
    
    49Depreciation & amortization
    
    
    
    
    
    
    11,059
    
    
    
    8,776
    
    
    
    
    
    
    
    19,835Deferred income taxes
    
    
    4,294
    
    
    
    
    
    
    
    (2,464
    )
    
    
    
    
    
    
    1,830Stock-based compensation
    
    
    
    
    
    
    519
    
    
    
    161
    
    
    
    
    
    
    
    680Gain on sale of discontinued
operations
    
    
    
    
    
    
    (9,456
    )
    
    
    
    
    
    
    
    
    
    
    (9,456
    )Loss on sale of building
    
    
    
    
    
    
    59
    
    
    
    
    
    
    
    
    
    
    
    59Working capital changes, net of
effect of acquisitions
Accounts receivable
    
    
    1,549
    
    
    
    8,019
    
    
    
    (6,528
    )
    
    
    
    
    
    
    3,040Inventories
    
    
    
    
    
    
    (11,112
    )
    
    
    (3,423
    )
    
    
    
    
    
    
    (14,535
    )Prepaid expenses
    
    
    107
    
    
    
    (1,895
    )
    
    
    2,561
    
    
    
    
    
    
    
    773Accounts payable
    
    
    (285
    )
    
    
    144
    
    
    
    4,355
    
    
    
    
    
    
    
    4,214Accrued liabilities
    
    
    442
    
    
    
    1,226
    
    
    
    (914
    )
    
    
    
    
    
    
    754Federal & foreign income taxes
    
    
    (4,837
    )
    
    
    5
    
    
    
    5,304
    
    
    
    
    
    
    
    472Other liabilities
    
    
    1,109
    
    
    
    44
    
    
    
    147
    
    
    
    
    
    
    
    1,300Other, net
    
    
    665
    
    
    
    (651
    )
    
    
    (2,023
    )
    
    
    
    
    
    
    (2,009
    )33,818
    
    
    
    24,949
    
    
    
    10,812
    
    
    
    (31,799
    )
    
    
    37,780Cash Flows Provided (Used) by Investing ActivitiesPurchases of capital assets
    
    
    (208
    )
    
    
    (6,669
    )
    
    
    (2,465
    )
    
    
    
    
    
    
    (9,342
    )Proceeds from sale of
discontinued operations
    
    
    
    
    
    
    21,421
    
    
    
    
    
    
    
    
    
    
    
    21,421Proceeds from sale of building
    
    
    
    
    
    
    2,319
    
    
    
    
    
    
    
    
    
    
    
    2,319Capital dispositions
    
    
    5
    
    
    
    74
    
    
    
    67
    
    
    
    
    
    
    
    146Purchase of short-term
investments
    
    
    (45,486
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,486
    )Acquisitions of businesses, net
    
    
    
    
    
    
    (3,346
    )
    
    
    
    
    
    
    
    
    
    
    (3,346
    )(45,689
    )
    
    
    13,799
    
    
    
    (2,398
    )
    
    
    
    
    
    
    (34,288
    )
 21




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalCash Flows Provided (Used) by Financing ActivitiesProceeds provided by stock
issuance under employee
stock plans
    
    
    2,435
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,435Proceeds from stock issuance
    
    
    108,490
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108,490Net change in credit facilities
    
    
    (5,000
    )
    
    
    
    
    
    
    576
    
    
    
    
    
    
    
    (4,424
    )Repayment of long-term debt
    
    
    (1,002
    )
    
    
    (57
    )
    
    
    (415
    )
    
    
    
    
    
    
    (1,474
    )Investment in subsidiaries
    
    
    86
    
    
    
    (39,445
    )
    
    
    7,560
    
    
    
    31,799
    
    
    
    105,009
    
    
    
    (39,502
    )
    
    
    7,721
    
    
    
    31,799
    
    
    
    105,027Effect of
Foreign Exchange Rates on Cash
    
    
    211
    
    
    
    (7
    )
    
    
    (498
    )
    
    
    
    
    
    
    (294
    )Net Increase (Decrease) in Cash
and Cash Equivalents
    
    
    93,349
    
    
    
    (761
    )
    
    
    15,637
    
    
    
    
    
    
    
    108,225Cash and Cash Equivalents
 Beginning of Period
    
    
    6,859
    
    
    
    2,353
    
    
    
    20,267
    
    
    
    
    
    
    
    29,479Cash and Cash Equivalents
 End of Period
    
    $
    100,208
    
    
    $
    1,592
    
    
    $
    35,904
    
    
    $
    
    
    
    $
    137,704
 22




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalAssetsCurrent AssetsCash and cash equivalents
    
    $
    6,859
    
    
    $
    2,353
    
    
    $
    20,267
    
    
    $
    
    
    
    $
    29,479Cash in escrow
    
    
    8,511
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,511Accounts receivable, net
    
    
    2,221
    
    
    
    83,115
    
    
    
    46,870
    
    
    
    
    
    
    
    132,206Inventories
    
    
    
    
    
    
    76,168
    
    
    
    42,886
    
    
    
    
    
    
    
    119,054Deferred income tax benefits
    
    
    40,630
    
    
    
    
    
    
    
    (17,131
    )
    
    
    
    
    
    
    23,499Prepaid expenses
    
    
    353
    
    
    
    3,598
    
    
    
    5,490
    
    
    
    
    
    
    
    9,441Other current assets
    
    
    147
    
    
    
    288
    
    
    
    
    
    
    
    
    
    
    
    435Total Current Assets
    
    
    58,721
    
    
    
    165,522
    
    
    
    98,382
    
    
    
    
    
    
    
    322,625Property, Plant & Equipment, Net
    
    
    2,369
    
    
    
    99,360
    
    
    
    43,406
    
    
    
    
    
    
    
    145,135Goodwill
    
    
    
    
    
    
    175,607
    
    
    
    72,210
    
    
    
    
    
    
    
    247,817Intangibles, Net
    
    
    141
    
    
    
    77,160
    
    
    
    92,575
    
    
    
    
    
    
    
    169,876Debt Issuance Costs, Net
    
    
    5,818
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,818Deferred Income Tax Benefits
    
    
    11,216
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,216Other Assets
    
    
    9,780
    
    
    
    18,309
    
    
    
    4,772
    
    
    
    
    
    
    
    32,861Amounts Due (To) From
Subsidiaries
    
    
    152,346
    
    
    
    36,188
    
    
    
    
    
    
    
    (188,534
    )
    
    
    Investment in Subsidiaries
    
    
    558,234
    
    
    
    
    
    
    
    92
    
    
    
    (558,326
    )
    
    
    Total Assets
    
    $
    798,625
    
    
    $
    572,146
    
    
    $
    311,437
    
    
    $
    (746,860
    )
    
    $
    935,348
 23




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalLiabilities and Shareholders EquityCurrent LiabilitiesAccounts payable
    
    $
    520
    
    
    $
    16,814
    
    
    $
    20,533
    
    
    $
    
    
    
    $
    37,867Accrued liabilities
    
    
    29,880
    
    
    
    41,466
    
    
    
    25,692
    
    
    
    
    
    
    
    97,038Credit facilities
    
    
    5,000
    
    
    
    
    
    
    
    1,977
    
    
    
    
    
    
    
    6,977Current maturities of
long-term debt
    
    
    
    
    
    
    50
    
    
    
    981
    
    
    
    
    
    
    
    1,031Federal and foreign
income taxes
    
    
    2,996
    
    
    
    75
    
    
    
    3,607
    
    
    
    
    
    
    
    6,678Total Current Liabilities
    
    
    38,396
    
    
    
    58,405
    
    
    
    52,790
    
    
    
    
    
    
    
    149,591Long-Term Debt, Net
    
    
    246,769
    
    
    
    7
    
    
    
    2,280
    
    
    
    
    
    
    
    249,056Deferred Income Taxes
    
    
    43,149
    
    
    
    
    
    
    
    294
    
    
    
    
    
    
    
    43,443Other Liabilities
    
    
    9,283
    
    
    
    13,840
    
    
    
    6,729
    
    
    
    
    
    
    
    29,852Amounts Due To (From)
Subsidiaries
    
    
    
    
    
    
    
    
    
    
    186,310
    
    
    
    (186,310
    )
    
    
    Minority Interest
    
    
    
    
    
    
    
    
    
    
    2,378
    
    
    
    
    
    
    
    2,378Shareholders Equity
    
    
    461,028
    
    
    
    499,894
    
    
    
    60,656
    
    
    
    (560,550
    )
    
    
    461,028Total Liabilities and
Shareholders Equity
    
    $
    798,625
    
    
    $
    572,146
    
    
    $
    311,437
    
    
    $
    (746,860
    )
    
    $
    935,348
 24




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNet Sales
    
    $
    
    
    
    $
    113,592
    
    
    $
    33,106
    
    
    $
    (224
    )
    
    $
    146,474Cost of Sales
    
    
    
    
    
    
    78,189
    
    
    
    19,925
    
    
    
    (224
    )
    
    
    97,890
    
    
    
    35,403
    
    
    
    13,181
    
    
    
    
    
    
    
    48,584ExpensesSelling, general
and administrative
    
    
    
    
    
    
    18,651
    
    
    
    6,664
    
    
    
    
    
    
    
    25,315Research, development
and engineering
    
    
    
    
    
    
    2,402
    
    
    
    3,613
    
    
    
    
    
    
    
    6,015Total Expenses
    
    
    
    
    
    
    21,053
    
    
    
    10,277
    
    
    
    
    
    
    
    31,330Operating Earnings from
Continuing Operations
    
    
    
    
    
    
    14,350
    
    
    
    2,904
    
    
    
    
    
    
    
    17,254Other (income) expense
    
    
    
    
    
    
    (20
    )
    
    
    1
    
    
    
    
    
    
    
    (19
    )Interest income
    
    
    (1,495
    )
    
    
    (628
    )
    
    
    (56
    )
    
    
    1,895
    
    
    
    (284
    )Interest expense
    
    
    4,078
    
    
    
    625
    
    
    
    1,355
    
    
    
    (1,895
    )
    
    
    4,163Other (Income) Expense, Net
    
    
    2,583
    
    
    
    (23
    )
    
    
    1,300
    
    
    
    
    
    
    
    3,860Income (Loss) from Continuing
Operations Before Taxes
    
    
    (2,583
    )
    
    
    14,373
    
    
    
    1,604
    
    
    
    
    
    
    
    13,394Income Tax Expense (Benefit)
    
    
    (830
    )
    
    
    4,537
    
    
    
    261
    
    
    
    
    
    
    
    3,968Income (Loss) From
Continuing Operations
    
    
    (1,753
    )
    
    
    9,836
    
    
    
    1,343
    
    
    
    
    
    
    
    9,426Income From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    960
    
    
    
    
    
    
    
    
    
    
    
    960Equity in Net Income of
Consolidated Subsidiaries
    
    
    12,139
    
    
    
    
    
    
    
    
    
    
    
    (12,139
    )
    
    
    Net Income (Loss)
    
    $
    10,386
    
    
    $
    10,796
    
    
    $
    1,343
    
    
    $
    (12,139
    )
    
    $
    10,386
 25




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalNet Sales
    
    $
    
    
    
    $
    213,709
    
    
    $
    62,592
    
    
    $
    (461
    )
    
    $
    275,840Cost of Sales
    
    
    
    
    
    
    149,638
    
    
    
    39,487
    
    
    
    (461
    )
    
    
    188,664
    
    
    
    64,071
    
    
    
    23,105
    
    
    
    
    
    
    
    87,176ExpensesSelling, general
and administrative
    
    
    
    
    
    
    38,062
    
    
    
    19,285
    
    
    
    
    
    
    
    57,347Research, development
and engineering
    
    
    
    
    
    
    4,426
    
    
    
    7,012
    
    
    
    
    
    
    
    11,438Total Expenses
    
    
    
    
    
    
    42,488
    
    
    
    26,297
    
    
    
    
    
    
    
    68,785Operating Earnings (Loss) from
Continuing Operations
    
    
    
    
    
    
    21,583
    
    
    
    (3,192
    )
    
    
    
    
    
    
    18,391Other (income) expense
    
    
    
    
    
    
    (578
    )
    
    
    3
    
    
    
    
    
    
    
    (575
    )Interest income
    
    
    (2,972
    )
    
    
    (1,258
    )
    
    
    (140
    )
    
    
    3,773
    
    
    
    (597
    )Interest expense
    
    
    8,295
    
    
    
    1,250
    
    
    
    2,683
    
    
    
    (3,773
    )
    
    
    8,455Other (Income) Expense, Net
    
    
    5,323
    
    
    
    (586
    )
    
    
    2,546
    
    
    
    
    
    
    
    7,283Income (Loss) from Continuing
Operations Before Taxes
    
    
    (5,323
    )
    
    
    22,169
    
    
    
    (5,738
    )
    
    
    
    
    
    
    11,108Income Tax Expense (Benefit)
    
    
    (1,570
    )
    
    
    4,597
    
    
    
    (1,577
    )
    
    
    
    
    
    
    1,450Income (Loss) From
Continuing Operations
    
    
    (3,753
    )
    
    
    17,572
    
    
    
    (4,161
    )
    
    
    
    
    
    
    9,658Income From Discontinued
Operations, Net of Tax
    
    
    
    
    
    
    1,134
    
    
    
    
    
    
    
    
    
    
    
    1,134Equity in Net Income of
Consolidated Subsidiaries
    
    
    14,545
    
    
    
    
    
    
    
    
    
    
    
    (14,545
    )
    
    
    Net Income (Loss)
    
    $
    10,792
    
    
    $
    18,706
    
    
    $
    (4,161
    )
    
    $
    (14,545
    )
    
    $
    10,792
 26




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalCash Flows Provided (Used) by Operating ActivitiesNet earnings (loss)
    

    $
    10,792
    
    
    $
    18,706
    
    
    $
    (4,161
    )
    
    $
    (14,545
    )
    
    $
    10,792Depreciation & amortization
    
    
    
    
    
    
    10,963
    
    
    
    3,973
    
    
    
    
    
    
    
    14,936Deferred income taxes
    
    
    (835
    )
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    (788
    )Stock-based compensation
    
    
    
    
    
    
    1,065
    
    
    
    395
    
    
    
    
    
    
    
    1,460Gain on sale of land
    
    
    
    
    
    
    (577
    )
    
    
    
    
    
    
    
    
    
    
    (577
    )Working capital changes, net of
effect of acquisitionsAccounts receivable
    
    
    1,190
    
    
    
    9,298
    
    
    
    3,994
    
    
    
    
    
    
    
    14,482Inventories
    
    
    
    
    
    
    (4,821
    )
    
    
    (1,571
    )
    
    
    
    
    
    
    (6,392
    )Prepaid expenses
    
    
    76
    
    
    
    (1,458
    )
    
    
    (551
    )
    
    
    
    
    
    
    (1,933
    )Accounts payable
    
    
    (121
    )
    
    
    (1,469
    )
    
    
    133
    
    
    
    
    
    
    
    (1,457
    )Accrued liabilities
    
    
    1,054
    
    
    
    (2,896
    )
    
    
    1,639
    
    
    
    
    
    
    
    (203
    )Federal & foreign income taxes
    
    
    3,685
    
    
    
    (102
    )
    
    
    (782
    )
    
    
    
    
    
    
    2,801Other, net
    
    
    (6
    )
    
    
    (2,875
    )
    
    
    2,446
    
    
    
    
    
    
    
    (435
    )15,835
    
    
    
    25,834
    
    
    
    5,562
    
    
    
    (14,545
    )
    
    
    32,686Cash Flows Provided (Used) by Investing ActivitiesPurchases of capital assets
    
    
    (362
    )
    
    
    (10,176
    )
    
    
    (1,050
    )
    
    
    
    
    
    
    (11,588
    )Proceeds from sale of land
    
    
    
    
    
    
    1,179
    
    
    
    
    
    
    
    
    
    
    
    1,179Capital dispositions
    
    
    
    
    
    
    437
    
    
    
    (4
    )
    
    
    
    
    
    
    433Purchase of short-term investments
    
    
    (6,238
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,238
    )Acquisitions of businesses, net
    
    
    
    
    
    
    (6,633
    )
    
    
    
    
    
    
    
    
    
    
    (6,633
    )(6,600
    )
    
    
    (15,193
    )
    
    
    (1,054
    )
    
    
    
    
    
    
    (22,847
    )Cash Flows Provided (Used) by Financing ActivitiesProceeds provided by stock
issuance under employee
stock plans
    
    
    716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    716Net change in credit facilities
    
    
    
    
    
    
    
    
    
    
    564
    
    
    
    
    
    
    
    564Repayment of long-term debt
    
    
    (31,010
    )
    
    
    (42
    )
    
    
    (213
    )
    
    
    
    
    
    
    (31,265
    )Debt and other issuance costs
    
    
    (179
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (179
    )Investment in subsidiaries
    
    
    (5,157
    )
    
    
    (9,239
    )
    
    
    (149
    )
    
    
    14,545
    
    
    
    (35,630
    )
    
    
    (9,281
    )
    
    
    202
    
    
    
    14,545
    
    
    
    (30,164
    )
 27




---



##### Table of Contents



Non-Guarantor
    
    GuarantorParent
    
    Subsidiaries
    
    Subsidiaries
    
    Eliminations
    
    TotalEffect of Foreign Exchange
Rates on Cash
    
    
    (742
    )
    
    
    6
    
    
    
    1,133
    
    
    
    
    
    
    
    397Net Increase (Decrease) in Cash
and Cash Equivalents
    
    
    (27,137
    )
    
    
    1,366
    
    
    
    5,843
    
    
    
    
    
    
    
    (19,928
    )Cash and Cash Equivalents
 Beginning of Period
    
    
    109,834
    
    
    
    3,030
    
    
    
    18,499
    
    
    
    
    
    
    
    131,363Cash and Cash Equivalents
 End of Period
    
    $
    82,697
    
    
    $
    4,396
    
    
    $
    24,342
    
    
    $
    
    
    
    $
    111,435
 28




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
      29




---



##### Table of Contents



30




---



##### Table of Contents



Results of Continuing Operations
 Three Month Period Ended April 29, 2005 Compared to Three Month Period Ended April 30, 2004
  (In
thousands)
    
    Incr./(Decr.)
    
    
    Three Months Endedfrom prior
    
    
    April 29,
    
    
    April 30,year period
    
    
    2005
    
    
    2004Avionics & Controls
    
    
    24.3
    %
    
    $
    64,990
    
    
    $
    52,292Sensors & Systems
    
    
    112.6
    %
    
    
    84,541
    
    
    
    39,772Advanced Materials
    
    
    14.1
    %
    
    
    62,061
    
    
    
    54,410Total Net Sales
    
    
    
    
    
    $
    211,592
    
    
    $
    146,474
     31




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Six Month Period Ended April 29, 2005 Compared to Six Month Period Ended April 30, 2004
  (In
thousands)
    
    Incr./(Decr.)
    
    
    Six Months Endedfrom prior
    
    
    April 29,
    
    
    April 30,year period
    
    
    2005
    
    
    2004Avionics & Controls
    
    
    27.6
    %
    
    $
    125,845
    
    
    $
    98,608Sensors & Systems
    
    
    113.5
    %
    
    
    158,915
    
    
    
    74,424Advanced Materials
    
    
    13.4
    %
    
    
    116,624
    
    
    
    102,808Total Net Sales
    
    
    
    
    
    $
    401,384
    
    
    $
    275,840
   33




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34




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35




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Liquidity and Capital Resources
    36




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Recent Accounting Pronouncements
  Forward-Looking Statements
  37




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Item 4. Controls and Procedures
   38




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
   Votes CastName
    
    For
    
    WithheldLewis E. Burns
    
    
    23,306,783
    
    
    
    146,135Robert W. Cremin
    
    
    23,110,135
    
    
    
    342,783Anthony P. Franceschini
    
    
    23,161,791
    
    
    
    291,127
  Votes CastName
    
    For
    
    WithheldCharles R. Larson
    
    
    23,307,007
    
    
    
    145,911
  39




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Item 5. Other Information
  Audit Committee
 
 Compensation Committee
 
 Nominating & Corporate Governance Committee
 
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Item 6.
    
    Exhibits10.19b
    
    
    Offer Letter from Esterline Technologies Corporation to Richard Wood dated
February 9, 2005 (incorporated by reference to the Companys Quarterly Report
on Form 10-Q for the quarter ended January 28, 2005 [Commission File No. 1-6357]).10.19c
    
    
    Severance Protection Agreement between Richard Wood and Esterline
Technologies Corporation, dated February 23, 2005 (incorporated by reference
to the Companys Quarterly Report on Form 10-Q for the quarter ended January
28, 2005 [Commission File No. 1-6357]).10.19e
    
    
    Offer Letter from Esterline Technologies Corporation to Frank Houston dated
March 14, 2005 (incorporated by reference to the Companys Current Report on
Form 8-K dated March 29, 2005 [Commission File No. 1-6357]).11
    
    
    Schedule setting forth computation of basic and diluted
earnings per common share for the three and six month periods ended April 29,
2005 and April 30, 2004.31.1
    
    
    Certification of Chief Executive Officer.31.2
    
    
    Certification of Chief Financial Officer.32.1
    
    
    Certification (of Robert W. Cremin) pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.32.2
    
    
    Certification (of Robert D. George) pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
 
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SIGNATURES
  ESTERLINE TECHNOLOGIES CORPORATION(Registrant)Dated: January 6, 2006
    
    By:
    
    /s/ Robert D. GeorgeRobert D. GeorgeVice President, Chief Financial OfficerSecretary and Treasurer(Principal Financial Officer)
 42