Esterline to begin talks on replacement bank facility later this year

By Jennifer Lanning Drey

Portland, Ore., Sept. 3 - Esterline Corp. plans to begin discussions with its lenders later this year regarding the company's bank facility that matures in early 2012, Robert George, Esterline's chief financial officer, said during its third-quarter earnings conference call held Thursday afternoon.

The company will be looking to close on a new facility in 2011, he said.

Also during the call, George highlighted that Esterline ended the third quarter with a strong balance sheet position and has further enhanced its balance sheet through actions taken following the close of the period.

Esterline had $282.9 million of cash and cash equivalents at July 30, according to its earnings release.

As previously reported, in early August, Esterline issued $250 million of 7% fixed-rate senior notes due August 2020. The company plans to use the net proceeds to redeem all of its outstanding 7¾% senior subordinated notes due 2013.

Esterline plans to wrap up the transaction in September, he said.

"Over the years, as we have implemented our long-term strategy, we have consistently maintained a conservative view toward Esterline's capital structure. This move restores our laddered debt maturities with an all senior structure and maintains our strong credit ratios," George said.

Esterline reported cash flow from operations of $134 million for the first nine months of fiscal 2010, compared with cash flow from operations of $115 million for the same period of the prior year.

The company posted third-quarter income from continuing operations of $39.9 million on sales of $383.5 million. The figures compared to income from continuing operations of $32.5 million on sales of $361.5 million in the third quarter of 2009.

During the call, George said the year is progressing as the company had expected.

Bellevue, Wash.-based Esterline supplies products to the aerospace and defense industry in three areas: avionics and controls, sensors and systems, and advanced materials.

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