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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended October 31, 1994 Commission file number 1-6357
ESTERLINE TECHNOLOGIES CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 13-2595091
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
10800 NE 8th Street
Bellevue, Washington 98004
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 206/453-9400
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
Common Stock ($.20 par value) New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the Registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past
90 days.
X Yes No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. X
---------------
As of January 9, 1995, 6,516,975 shares of the Registrant's common
stock were outstanding. The aggregate market value of such common
stock held by non-affiliates at such date (based upon the closing
sale price) was $92,247,538.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Annual Report to Shareholders for Fiscal Year ended
October 31, 1994--Parts I, II and IV.
Portions of Proxy Statement relating to the 1995 Annual Meeting of
Shareholders, to be held on March 8, 1995--Part III.
- -----------------------------------------------------------------------
Page 1 of 67 pages
Exhibit index at page 20
2
PART I
ITEM 1. BUSINESS
(a) General Development of Business.
Esterline Technologies Corporation (the "Company") conducts
business through 13 principal domestic and foreign subsidiaries in
three business segments described in sub-item (c) below. The Company
was organized in August 1967.
On March 30, 1992 the Company sold substantially all of the
assets of Hollis Automation Co., an Esterline subsidiary which was not
significant to the Company in terms of operations or financial condition.
Hollis was in the Company's Automation Group.
In the fourth quarter of 1993, the Company recorded a $40.6
million restructuring charge ($27.2 million net of income tax effect).
It provided for the sale or shutdown of certain small operations in
each of the Company's three business segments. On a pretax basis,
$21.1 million of the restructuring charge related to the Aerospace
and Defense Group, $8.9 million to the Instrumentation Group and
$8.4 million to the Automation Group. The affected operations
represented approximately 10% of the Company's fiscal 1993 sales.
The charge further provided for the consolidation of plants and product
lines, including employees' severance, write-off of intangible assets
which no longer had value and the write-down and sale of two vacant
facilities.
Actions completed through fiscal 1994 associated with the
restructuring included the sale of Republic Electronics Co.
(an Aerospace and Defense Group operation), the sale of a vacant
facility in Torrance, California (an Automation Group property),
most elements of employees' severance, and the intangibles
write-off, and comprised $19.1 million (before tax) of the recorded
provision.
(b) Financial Information About Industry Segments.
A summary of net sales to unaffiliated customers, operating
earnings and identifiable assets attributable to the Company's
business segments for the fiscal years ended October 31, 1994,
1993 and 1992 is incorporated herein by reference to Note 12 to
the Company's Consolidated Financial Statements on pages 41 and
42 of the Annual Report to Shareholders for the fiscal year ended
October 31, 1994.
(c) Narrative Description of Business.
The Company consists of 13 individual businesses whose results
can vary widely based on a number of factors, including domestic
and foreign economic conditions and developments affecting the
specific industries and customers they serve. The products sold
by most of these businesses represent capital investment by either
the initial customer or the ultimate end user. Also, a significant
portion of the sales and profitability of some Company businesses
is derived from defense and other government contracts or the
commercial aircraft industry. Changes in general economic conditions
or conditions in specific industries, capital acquisition cycles,
and government policies, collectively or individually, can have a
significant effect on the Company's performance.
Specific comments covering all of the Company's fiscal 1994
business segments and operating units are set forth below.
3
AUTOMATION GROUP
This Group produces and markets automated drilling equipment
for the printed circuit board (PCB) manufacturing industry
(principally computer, telecommunications and automotive equipment);
and automated metal fabrication equipment for transportation, heavy
equipment and other related markets.
Excellon Automation produces automated drilling equipment for
the PCB manufacturing industry. Excellon's products emphasize
productivity and are designed to provide a highly efficient automated
production system for PCB manufacturers. Excellon's latest product
development combines multiple spindle microdrilling of circuit boards,
automatic board loading and unloading, and fully integrated material
handling capabilities. During fiscal 1994, Excellon acquired Amtech,
a manufacturer of unique material handling systems used in PCB
production.
Excellon products are sold worldwide to the PCB manufacturing
industry, including both large and small electronics equipment
manufacturers as well as component manufacturers, independent circuit
board fabricators and custom drilling operations.
In fiscal 1994, 1993 and 1992, printed circuit board drilling
equipment accounted for 18%, 16% and 12%, respectively, of the
Company's consolidated net sales.
Tulon produces tungsten carbide drill and router bits, commonly
ranging in size from 5.6mm down to .25mm--some as small as .10mm--for
use in PCB drilling equipment. Tulon utilizes computerized equipment
which automatically inspects drill bits and provides the product
consistency customers need for higher-technology drilling.
W.A. Whitney produces automated equipment for the fabrication of
structural steel, sheet metal and plate components and related
material-handling equipment. This equipment performs such functions
as punching, cutting, shearing and tapping. W.A. Whitney historically
has specialized in equipment for punching and cutting mid- to
heavy-guage plate metal, utilizing plasma-arc air torch systems and
hydraulic punching. Its customers consist principally of large metal
fabricators, such as truck, farm implement and construction equipment
manufacturers, and a wide range of independent fabricators.
W.A. Whitney also produces a line of specialized screw machine and
turret lathe tooling attachments under the Boyar-Schultz name. These
products are sold to a wide range of customers primarily for use in tool
room and production operations.
Equipment Sales Co. acts as a sales representative for various
manufacturers' products sold to the PCB assembly industry, including
high-speed assembly equipment.
At October 31, 1994, the backlog of the Automation Group (all
of which is expected to be filled during fiscal 1995) was $29.9 million
compared with $9.2 million one year earlier. The increase was
primarily attributable to strengthening markets and strong customer
acceptance of newer products at key Group companies.
4
AEROSPACE AND DEFENSE GROUP
This Group provides a broad range of measuring and sensing devices,
high-performance elastomers and clamping systems, and specialized metal
finishing principally for commercial aircraft and jet engine manufacturers;
also combustible ammunition components and electronic and electrical
cable assemblies for both domestic and foreign defense agencies and
contractors. During fiscal 1994, a group operating company, Republic
Electronics Co., was sold in connection with the Company's 1993
restructuring plan.
Armtec Defense Products manufactures molded fiber cartridge cases,
mortar increments, igniter tubes and other combustible ammunition
components for the United States armed forces and domestic and foreign
defense contractors. Armtec currently is the sole U.S. producer of
combustible ordnance, including the 120mm combustible case used on the
main armament system on the Army's M-1A1 tank and of 120mm, 81mm and
60mm combustible mortar increments for the U.S. Army. The majority of
Armtec's sales are to ordnance suppliers to the U.S. Armed Forces.
In fiscal 1994, 1993 and 1992, combustible ordnance components
accounted for 9%, 9% and 12%, respectively, of the Company's
consolidated net sales.
Auxitrol, headquartered in France, manufactures temperature and
pressure sensors for use in aerospace and aviation applications, liquid
level measurement devices for ships and storage tanks, pneumatic
accessories (including pressure gauges and regulators) and industrial
alarms, as well as electrical penetration devices and alarm systems for
European and other foreign nuclear power plants. This subsidiary also
distributes products manufactured by others, including valves, temperature
and pressure switches and flow gauges. The markets served by Auxitrol
principally consist of jet engine manufacturers, aerospace equipment
manufacturers, shipbuilders, petroleum companies, process industries
and electric utilities. Auxitrol has a joint venture with a Russian
company to facilitate use of Auxitrol technology in retrofitting the
aging nuclear plants in Eastern Europe. Exhaust gas temperature sensing
equipment for a jet engine manufacturer constitute a significant portion
of Auxitrol's sales.
Hytek Finishes provides specialized metal finishing and inspection
services, including plating, anodizing, polishing, non-destructive testing
and organic coatings, primarily to the commercial aircraft, aerospace and
electronics markets. Hytek also has an automated tin-lead plating line,
employing the latest automated plating technology, to serve the semi-
conductor industry.
Midcon Cables manufactures electronic and electrical cable assemblies
and cable harnesses for the military, government contractors and the
commercial electronics market, offering both product design services and
assembly of product to customer specifications.
TA Mfg. designs and manufactures specialty clamps and elastomeric
compounds in custom molded shapes for wiring and tubing installations for
airframe and jet engine manufacturers as well as military and commercial
airline aftermarkets. TA's products include elastomers which are specif-
ically formulated for various applications, including high-temperature
environments.
At October 31, 1994, the backlog of the Aerospace and Defense Group
(of which $4.1 million is expected to be filled after fiscal 1995) was
$38.9 million, compared with $40.8 million one year earlier.
5
INSTRUMENTATION GROUP
This Group designs and manufactures a variety of meters, gauges and
measurement and analysis equipment for public utilities and industrial
manufacturers; also lighted indicators, switches and control components
for the commercial aerospace and defense industries.
Korry Electronics designs and manufactures illuminated information
and control components, and integrated thin-panel data systems, such as
switches, indicators, panels and keyboards which act as man-machine
interfaces in a broad variety of control and display applications.
Korry's customers include original equipment manufacturers and the
aftermarkets (equipment operators and spare parts distributors), primarily
in the commercial aviation, general aviation, military airborne, ground-
based military equipment and shipboard military equipment markets. A
significant portion of Korry's sales are to suppliers of military equipment
to the U.S. Government and to a commercial aircraft manufacturer.
Federal Products manufactures a broad line of high-precision analog
and digital dimensional and surface measurement and inspection instruments
and systems for a wide range of industrial quality control and scientific
applications. Federal also distributes certain products which complement
its manufactured product lines. These products constitute three major
business segments: gauging, which includes dial indicators, air gauges
and other precision gauges; instrumentation, which includes electronic
gauges for use where ultra-precision measurement is required; and
engineered products, which include custom-built and dedicated semi-
automatic and automatic gauging systems. Distributed products manufac-
tured by others include laser interferometer systems used primarily to
check machine tool calibrations. Federal Products' equipment is used
extensively in precision metal working. Its customers include the
automotive, farm implement, construction equipment, aerospace, ordnance
and bearing industries.
In each of fiscal years 1994, 1993 and 1992, gauge products manufac-
tured by Federal Products accounted for 13% of the Company's consolidated
net sales.
Scientific Columbus (formerly Jemtec Electronics) produces analog and
digital meters, electrical transducers and instruments for the monitoring,
controlling and billing of electrical power. Included among these products
are solid-state devices for calibration of electric utility instrumentation
and a line of solid state-meters, including programmable multi-function
billing meters. The latest products of Scientific Columbus are multi-
function, microprocessor-based meters which offer a broad range of features
on a modular basis. Scientific Columbus' products are sold to electrical
utilities and industrial power users.
Angus Electronics manufactures recording instruments together with
other analytical and process and environmental monitoring instrumentation.
These include analog strip chart and digital printout recorders as well
as electronic and multi-channel microprocessor-based recording equipment.
Customers of Angus Electronics include industrial equipment manufacturers,
electric utilities, scientific laboratories, pharmaceutical manufacturers
and process industries.
At October 31, 1994, the backlog of the Instrumentation Group (of
which $7.2 million is expected to be filled after fiscal 1995) was $28
million compared with $24.4 million one year earlier.
6
MARKETING AND DISTRIBUTION
Automation Group products manufactured by Excellon are marketed
domestically principally through employees and in foreign markets through
employees, independent distributors, and affiliated distributors. Tulon
products are marketed in the United States through employees and
independent distributors and elsewhere principally through independent
distributors. W.A. Whitney products are sold principally through
independent distributors and representatives.
Aerospace and Defense Group products manufactured by Auxitrol are
marketed through employees, independent representatives, and an affiliated
U.S. distributor. The products of Armtec Defense Products are marketed
domestically and abroad by employees and independent representatives.
Midcon Cables' products are marketed domestically by employees and
independent representatives. Hytek's services are marketed domestically
through employees. TA Mfg. products are marketed domestically and abroad
by employees and independent representatives.
Instrumentation Group products manufactured by Angus Electronics are
marketed domestically through employees, independent representatives and
distributors, and abroad through independent representatives and employees
of Esterline's Auxitrol subsidiary. Scientific Columbus' products are sold
through independent representatives. The products of Federal Products are
marketed domestically principally through employees, and in foreign markets
through both employees and independent representatives. Korry Electronics'
products are marketed domestically and abroad principally through employees
and independent representatives.
For most of the Company's products, the maintenance of a service
capability is an integral part of the marketing function.
RESEARCH AND DEVELOPMENT
The Company's subsidiaries conduct product development and design
programs with approximately 175 professional engineers, technicians and
support personnel, supplemented by independent engineering and consulting
firms when needed. In fiscal 1994, approximately $13.7 million was
expended for research, development and engineering, compared with $14
million in 1993 and $13.4 million in 1992.
FOREIGN OPERATIONS
The Company's principal foreign operations consist of manufacturing
facilities of Auxitrol located in France and Spain, a manufacturing
facility of Tulon located in Mexico, sales and service operations of
Excellon located in England, Germany and Japan, and sales offices of TA
Mfg and Korry Electronics located in England and France, respectively.
In addition, W.A. Whitney has a small manufacturing and distribution
facility in Italy. For information as to sales, operating results and
assets by geographic area and export sales, reference is made to Note 1
to the Consolidated Financial Statements on page 33, and Note 12 to the
Consolidated Financial Statements on pages 41, 42 and 43, of the Company's
Annual Report to Shareholders for the fiscal year ended October 31, 1994,
which is incorporated herein by reference.
EMPLOYEES
During fiscal 1994, restructuring plan actions included the sale of
a small operating company and most elements of employees' severance, as
discussed earlier in this report. Notwithstanding these actions, the
Company and its subsidiaries had approximately 2,800 employees at
October 31, 1994, level with the prior year.
7
COMPETITION AND PATENTS
The Company's subsidiaries experience varying degrees of competition
with respect to all of their products and services. Most subsidiaries
are in specialized market niches with relatively few competitors. In
automated drilling equipment for printed circuit board manufacturing,
Excellon Automation is a leader in its field and believes it has the
largest installed base in the world of automated drilling machines for
the production of printed circuit boards. In molded fiber cartridge
cases, mortar increments and other combustible ammunition components,
Armtec currently is the sole supplier to the U.S. Army. In addition,
Hytek is one of the largest metal finishers on the West Coast, and Korry
Electronics, Federal Products, W.A. Whitney, and TA Mfg. are among the
leaders in their respective markets.
The Company's subsidiaries generally compete with many larger
companies with substantially greater volume and financial resources.
The Company believes the main competitive factors for the Company's
products is product performance and service. Overall, the Company
believes its ongoing product development and design programs, coupled
with a strong customer service orientation, keep its various product
groups competitive in the marketplace.
The subsidiaries hold a number of patents but in general rely on
technical superiority, exclusive features in their equipment and
marketing and service to customers to meet competition. Licenses which
help maintain a significant advantage over competition include a long-
term license agreement under which Auxitrol manufactures and sells
electrical penetration assemblies.
SOURCES AND AVAILABILITY OF RAW MATERIALS AND COMPONENTS
The Company's subsidiaries are not materially dependent for their
raw materials and components upon any one source of supply except for
certain components and supplies such as hydraulic components purchased
by W.A. Whitney and certain other raw materials and components purchased
by other subsidiaries. In such instances, ongoing efforts are conducted
to develop alternative sources or designs to help avoid the possibility
of any business impairment.
(d) Financial Information About Foreign and Domestic Operations
and Export Sales.
See "Foreign Operations" above.
8
ITEM 2. PROPERTIES
The following table summarizes the principal properties (in
excess of 15,000 square feet) owned or leased by the Company and its
subsidiaries as of October 31, 1994:
Approximate
Type of Number of Owned
Location Facility Square Feet or Leased
- -------- ----------------- ----------- ----------
Coachella, CA Office and Plant (D) 110,000 Owned
Columbus, OH Office and Plant (I) 40,000 Owned
Gardena, CA Office and Plant (A) 18,000 Leased
Glendale, CA Office and Plant (D) 45,000 Leased
Indianapolis, IN Office and Plant (I) 63,000 Owned
Joplin, MO Office and Plant (D) 92,000 Owned
Kent, WA Office and Plant (D) 93,000 Owned
Rancho Cucamonga, CA Office and Plant (A) 33,000 Owned
Providence, RI Office and Plant (I) 166,000 Owned
Rockford, IL Office and Plant (A) 257,000 Owned
Seattle, WA Office and Plant (I) 100,000 Leased
Torrance, CA Office and Plant (A) 150,000 Leased
Bourges, France Plant (D) 69,000 Owned
Dietzenbach, Germany Office and Service
Facility (A) 32,000 Leased
Rustington, England Office and Service
Facility(A) 18,000 Leased
Guadalajara, Mexico Office and Plant (A) 40,000 Leased
Torino, Italy Office and Plant (A) 20,000 Leased
Torrejon de Ardoz,
Spain Office and Plant (D) 17,000 Owned
- -----------------
The Company group (business segment) operating each facility described
above is indicated by the letter following the description of the facility,
as follows:
(A) - Automation
(D) - Aerospace and Defense
(I) - Instrumentation
In addition to the properties listed above, a 64,000 square foot
facility in Nashua, NH is owned by the Company and planned for sale.
Liabilities have been accrued for environmental remediation costs expected
to be incurred in the disposition of this facility.
In the opinion of the management of the Company, the subsidiaries'
plants and equipment are in good condition, adequate for current operations
and provide sufficient capacity for up to 25% expansion at most locations.
ITEM 3. LEGAL PROCEEDINGS
The Company has various lawsuits and claims, both offensive and
defensive, and contingent liabilities arising from the conduct of business,
including those associated with government contracting activities, none of
which, in the opinion of management, is expected to have a material effect
on the Company's financial position or results of operations.
9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during
the fourth quarter of the fiscal year ended October 31, 1994.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The following information which appears in the Company's Annual
Report to Shareholders for fiscal 1994 is hereby incorporated by reference:
(a) The high and low market prices of the Company's common stock
for each quarterly period during the fiscal years ended
October 31, 1994 and 1993, respectively (page 28 of the
Annual Report to Shareholders).
(b) The approximate number of holders of common stock (page 28 of
the Annual Report to Shareholders).
(c) Restrictions on the ability to pay future cash dividends
(Note 4 to Consolidated Financial Statements, pages 34 and
35 of the Annual Report to Shareholders).
No cash dividends were paid during the fiscal years ended October 31, 1994
and 1993 as the Company continued its policy of retaining all internally
generated funds to support the long-term growth of the Company and to retire
debt obligations.
The principal market for the Company's common stock is the New York Stock
Exchange.
ITEM 6. SELECTED FINANCIAL DATA
The Company hereby incorporates by reference the Selected Financial Data
of the Company which appears on page 28 of the Company's Annual Report to
Shareholders for fiscal 1994.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company hereby incorporates by reference Management's Discussion and
Analysis of Results of Operations and Financial Condition which is set forth
on pages 25, 26 and 27 of the Company's Annual Report to Shareholders for
fiscal 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company hereby incorporates by reference the Consolidated Financial
Statements and the report thereon of Deloitte & Touche LLP, dated
December 5, 1994, which appear on pages 29 - 44 of the Company's Annual
Report to Shareholders for fiscal 1994, including Note 13, page 43, which
contains unaudited quarterly financial data.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
10
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Directors.
The Company hereby incorporates by reference the information set
forth under "Election of Directors" in the definitive form of the Company's
Proxy Statement, relating to its Annual Meeting of Shareholders to be held
on March 8, 1995, filed with the Securities and Exchange Commission and the
New York Stock Exchange on January 13, 1995.
(b) Executive Officers.
The names and ages of all executive officers of the Company and the
positions and offices held by such persons as of January 25, 1995 are as
follows:
Name Age Position with the Company
---- --- -------------------------
Wendell P. Hurlbut 63 Chairman, President and
Chief Executive Officer
Robert W. Stevenson 55 Executive Vice President and Chief
Financial Officer, Secretary and
Treasurer
Robert W. Cremin 54 Senior Vice President and Group Executive
Larry A. Kring 54 Group Vice President
Stephen R. Larson 50 Group Vice President
Marcia J. M. Greenberg 42 Vice President, Human Relations
Mr. Hurlbut has been Chairman, President and Chief Executive Officer
since January 1993. From February 1989 through December 1992, he was
President and Chief Executive Officer.
Mr. Stevenson has been Executive Vice President and Chief Financial
Officer, Secretary and Treasurer since October 1987.
Mr. Cremin has been Senior Vice President and Group Executive since
December 1990. From October 1987 to December 1990, he was Group Vice
President.
Mr. Kring has been Group Vice President since August 1993. For more
than five years prior to that date, he was President of Heath Tecna
Aerospace Co., a unit of Ciba Composites Division, Anaheim, California.
Mr. Larson has been Group Vice President since April 1991. For more
than five years prior to that date, he held various executive positions
with Korry Electronics, including President and Executive Vice President,
Marketing.
Ms. Greenberg has been Vice President, Human Relations since March 1993.
For more than five years prior to that date, she was a partner in the law
firm of Bogle & Gates, Seattle, Washington.
ITEM 11. EXECUTIVE COMPENSATION
The Company hereby incorporates by reference the information set forth
under "Executive Compensation" in the definitive form of the Company's
Proxy Statement, relating to its Annual Meeting of Shareholders to be held
on March 8, 1995, filed with the Securities and Exchange Commission and the
New York Stock Exchange on January 13, 1995.
11
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company hereby incorporates by reference the information with respect
to stock ownership set forth under "Security Ownership of Certain Beneficial
Owners and Management" in the definitive form of the Company's Proxy
Statement, relating to its Annual Meeting of Shareholders to be held on
March 8, 1995, filed with the Securities and Exchange Commission and the
New York Stock Exchange on January 13, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements.
The following consolidated financial statements, together with the
report thereon of Deloitte & Touche LLP, dated December 5, 1994, appearing
on pages 29 - 44 of the Company's Annual Report to Shareholders for fiscal
1994, are hereby incorporated by reference:
Annual Report
Page Number
-------------
Report of Independent Auditors.................. 44
Consolidated Balance Sheet--October 31, 1994 and 1993... 30
Consolidated Statement of Operations--Years ended
October 31, 1994, 1993 and 1992......................... 29
Consolidated Statement of Shareholders' Equity--Years ended
October 31, 1994, 1993 and 1992......................... 32
Consolidated Statement of Cash Flows--Years ended
October 31, 1994, 1993 and 1992......................... 31
Notes to Consolidated Financial Statements.............. 33 - 43
(a) (2) Financial Statement Schedules.
The following additional financial data should be read in
conjunction with the consolidated financial statements in the Annual
Report to Shareholders for the fiscal year ended October 31, 1994:
Independent Auditors' Report
Schedule VIII-- Valuation and Qualifying Accounts and Reserves
12
(a) (3) Exhibits.
Exhibit
Number Exhibit
------- -------
3.1 Composite Restated Certificate of Incorporation of the Company
as amended by Certificate of Amendment dated March 14, 1990.
(Incorporated by reference to Exhibit 19 to 10-Q Report for
the quarter ended July 31, 1990.)
3.2 By-laws of the Company, as amended and restated
December 15, 1988. (Incorporated by reference to Exhibit 3.2
to 10-K Report for the fiscal year ended October 31, 1988.)
4.1 Indenture, dated as of October 1, 1980, among Esterline
International Finance N.V., the Company and Manufacturers
Hanover Trust Company, relating to 8-1/4% Convertible Sub-
ordinated Guaranteed Debentures due 1995 of Esterline Inter-
national Finance N.V., convertible into Common Stock of the
Company. (Incorporated by reference to Exhibit 4.1 to 10-K
Report for the fiscal year ended October 31, 1980.) Registrant
undertakes to furnish to the Commission, upon request, a copy
of any other instrument defining the rights of long-term debt
of the Registrant and all of its subsidiaries for which
consolidated or unconsolidated financial statements are
required to be filed.
4.2 Form of Rights Agreement, dated as of December 9, 1992,
between the Company and Chemical Bank, which includes as
Exhibit A thereto the form of Certificate of Designation,
Preferences and Rights of Series A Serial Preferred Stock
and as Exhibit B thereto the form of Rights Certificate
(Incorporated by reference to Exhibit 1 to the Registration
Statement to Form 8-A filed December 17, 1992.)
10.1 Amendment of Lease and Agreement, dated March 11, 1959,
between the City of Torrance, California, and Longren
Aircraft Company, Inc., as original lessee; Lease, dated
July 1, 1959, between the City of Torrance and Aeronca
Manufacturing Corporation, as original lessee; and Assignment
of Ground Lease, dated September 26, 1985, from Robert G.
Harris, as successor lessee under the foregoing leases, to
Excellon Industries, Inc., relating to principal manufacturing
facility of Excellon at 24751 Crenshaw Boulevard, Torrance,
California. (Incorporated by reference to Exhibit 10.1 to
10-K Report for fiscal year ended October 31, 1986.)
10.4 Industrial Lease dated July 17, 1984 between 901 Dexter
Associates and Korry Electronics Co., First Amendment to
Lease dated May 10, 1985, Second Amendment to Lease dated
June 20, 1986, Third Amendment to Lease dated
September 1, 1987, and Notification of Option Exercise dated
January 7, 1991, relating to the manufacturing facility of
Korry Electronics at 901 Dexter Avenue N., Seattle, Washington.
(Incorporated by reference to Exhibit 10.4 to 10-K Report for
the fiscal year ended October 31, 1991.)
13
Exhibit
Number Exhibit
------- -------
10.4a Fourth Amendment dated July 27, 1994 to Industrial Lease dated
July 17, 1984 between Houg Family Partnership, as successor to
901 Dexter Associates, and Korry Electronics Co.
10.5 Industrial Lease dated July 17, 1984 between 801 Dexter
Associates and Korry Electronics Co., First Amendment to
Lease dated May 10, 1985, Second Amendment to Lease dated
June 20, 1986, Third Amendment to Lease dated
September 1, 1987, and Notification of Option Exercise dated
January 7, 1991, relating to the manufacturing facility of
Korry Electronics at 801 Dexter Avenue N., Seattle Washington.
(Incorporated by reference to Exhibit 10.5 to 10-K Report
for the fiscal year ended October 31, 1991.)
10.5a Fourth Amendment dated March 28, 1994 to Industrial Lease
dated July 17, 1984 between Michael Maloney and the Bancroft &
Maloney general partnership, as successor to 801 Dexter
Associates, and Korry Electronics Co.
10.7 Amended and Restated Credit Agreement executed as of
January 25, 1991 dated and effective as of September 18, 1989
between Esterline Corporation, certain of its subsidiaries,
various financial institutions and Continental Bank N.A. as
Agent. (Incorporated by reference to Exhibit 10.7 to 10-K
Report for the fiscal year ended October 31, 1990.)
10.8 Amendment, dated as of August 6, 1992, among Esterline
Technologies Corporation, certain of its subsidiaries, various
financial institutions and Continental Bank N.A., as agent, to
that certain Amended and Restated Credit Agreement, executed
as of January 25, 1991 and dated and effective as of
September 18, 1989, among Esterline Corporation, certain of
its subsidiaries, certain financial institutions and
Continental Bank N.A., as agent. (Incorporated by reference
to Exhibit 10.8 to 10-Q Report for the quarter ended
July 31, 1992.)
10.8a Amendment, dated as of October 31, 1993, among Esterline
Technologies Corporation, certain of its subsidiaries,
various financial institutions and Continental Bank N.A., as
agent, to that certain Amended and Restated Credit Agreement,
executed as of January 25, 1991 and dated and effective as of
September 18, 1989 and amended August 6, 1992, among Esterline
Corporation, certain of its subsidiaries, certain financial
institutions and Continental Bank N.A., as agent.
(Incorporated by reference to Exhibit 10.8a to 10-K Report for
the fiscal year ended October 31, 1993.)
10.9 Note Agreement, dated as of July 15, 1992, among Esterline
Technologies Corporation, certain of its subsidiaries, The
Northwestern Mutual Life Insurance Company and New England
Mutual Life Insurance Company relating to 8.75% Senior Notes
due July 30, 2002 of Esterline Technologies Corporation and
certain of its subsidiaries. (Incorporated by reference to
Exhibit 10.9 to 10-Q Report for the quarter ended July 31, 1992.)
14
Exhibit
Number Exhibit
------- -------
10.9a Amendment to Note Agreement, executed as of October 31, 1993,
to that certain Note Agreement, dated and effective as of
July 15, 1992 , among Esterline Technologies Corporation,
certain of its subsidiaries, The Northwestern Mutual Life
Insurance Company and New England Mutual Life Insurance
Company relating to 8.75% Senior Notes due July 30, 2002 of
Esterline Technologies Corporation and certain of its
subsidiaries. (Incorporated by reference to Exhibit 10.9a to
10-K Report for the fiscal year ended October 31, 1993.)
10.10 Compensation of Directors. (Incorporated by reference to first
paragraph under "Other Information as to Directors" in the
definitive form of the Company's Proxy Statement, relating to
its 1995 Annual Meeting of Shareholders to be held on
March 8, 1995, filed with the Securities and Exchange Commission
and the New York Stock Exchange on January 13, 1995.)
10.14 Stock Option Plan for Carroll M. Martenson. (Incorporated by
reference to Exhibit B to the Company's Proxy Statement dated
February 9, 1988.)
10.14a Certificate of Grant of Option pursuant to Stock Option Plan
for Carroll M. Martenson. (Incorporated by reference to
Exhibit 10.14a to 10-K Report for the fiscal year ended
October 31, 1991.)
10.14b Amendment to Certificate of Grant of Option pursuant to
Stock Option Plan for Carroll M. Martenson. (Incorporated
by reference to Exhibit 10.14b to 10-K Report for the fiscal
year ended October 31, 1991.)
11 Schedule setting forth computation of earnings per share for
the five fiscal years ended October 31, 1994.
13 Annual Report to Shareholders for the fiscal year ended
October 31, 1994. (Not filed as part of this Report except
for those portions thereof incorporated by reference herein.)
21 List of subsidiaries.
23.1 Consent of Deloitte & Touche LLP.
Exhibit
Number Management Contracts or Compensatory Plans or Arrangements
------- ----------------------------------------------------------
10.13 Amended and Restated 1987 Stock Option Plan. (Incorporated
by reference to Exhibit 10.13 to 10-Q Report for the quarter
ended January 31, 1992.)
10.15 Esterline Corporation Supplemental Retirement Income Plan for
Key Executives. (Incorporated by reference to Exhibit 10.15
to 10-K Report for the fiscal year ended October 31, 1989.)
10.16b Esterline Corporation Long-Term Incentive Compensation Plan,
Fiscal Years 1992 through 1995. (Incorporated by reference to
Exhibit 10.16b to 10-K Report for the fiscal year ended
October 31, 1992.)
15
Exhibit
Number Management Contracts or Compensatory Plans or Arrangements
------- ----------------------------------------------------------
10.16c Esterline Corporation Long-Term Incentive Compensation Plan,
Fiscal Years 1993 through 1996. (Incorporated by reference
to Exhibit 10.16c to 10-K Report for the fiscal year ended
October 31, 1993.)
10.16d Esterline Corporation Long-Term Incentive Compensation Plan,
Fiscal Years 1994 through 1997.
10.19 Executive Officer Termination Protection Agreement.
(Incorporated by reference to Exhibit 10.19 to 10-K Report for
the fiscal year ended October 31, 1992.)
10.20b Esterline Technologies Corporation Corporate Management
Incentive Compensation Plan for fiscal year 1994.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the fourth quarter of fiscal
1994.
16
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ESTERLINE TECHNOLOGIES CORPORATION
(Registrant)
By /s/ Robert W. Stevenson
----------------------------
Robert W. Stevenson
Executive Vice President and
Chief Financial Officer, Secretary
and Treasurer (Principal Financial
and Accounting Officer)
Dated: January 27, 1995
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Wendell P. Hurlbut Director, Chairman, President and January 27, 1995
- ---------------------- ----------------
(Wendell P. Hurlbut) Chief Executive Officer
(Principal Executive Officer)
/s/ Robert W. Stevenson Executive Vice President January 27, 1995
- ----------------------- ----------------
(Robert W. Stevenson) and Chief Financial
Officer, Secretary and
Treasurer (Principal
Financial and Accounting
Officer)
17
/s/ Gilbert W. Anderson Director January 18, 1995
- ----------------------- ----------------
(Gilbert W. Anderson)
/s/ John F. Clearman Director January 12, 1995
- -------------------- ----------------
(John F. Clearman)
/s/ Edwin I. Colodny Director January 18, 1995
- -------------------- ----------------
(Edwin I. Colodny)
/s/ E. John Finn Director January 12, 1995
- ---------------- ----------------
(E. John Finn)
/s/ Robert F. Goldhammer Director January 13, 1995
- ------------------------ ----------------
(Robert F. Goldhammer)
/s/ Jerome J. Meyer Director January 13, 1995
- ------------------- ----------------
(Jerome J. Meyer)
/s/ Paul G. Schloemer Director January 13, 1995
- --------------------- ----------------
(Paul G. Schloemer)
/s/ Malcolm T. Stamper Director January 16, 1995
- ---------------------- ----------------
(Malcolm T. Stamper)
18
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Esterline Technologies Corporation
Bellevue, Washington
We have audited the consolidated financial statements of Esterline
Technologies Corporation as of October 31, 1994 and 1993, and for each of
the three years in the period ended October 31, 1994, and have issued our
report thereon dated December 5, 1994; such financial statements and report
are included in your 1994 Annual Report to Shareholders and are incorporated
herein by reference. Our audits also included the financial statement
schedules of Esterline Technologies Corporation, listed in Item 14.
These financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic financial statements taken as a whole, present fairly
in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP
- -------------------------
Seattle, Washington
December 5, 1994
19
ESTERLINE TECHNOLOGIES CORPORATION AND SUBSIDIARIES
SCHEDULE VIII--VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(in thousands)
For Years Ended October 31, 1994, 1993 and 1992
Deduction for
Balance at Additions Purpose for Balance
Beginning Charged which Reserve at End
Description of Year to Income was Created of Year
----------- ---------- --------- ------------- --------
Reserve for doubtful
accounts receivable
Year Ended October 31
- ---------------------
1994 $ 2,417 $ 117 $ (333) $ 2,201
========== ======== ============ ========
1993 $ 2,314 $ 668 $ (565) $ 2,417
========== ======== ============ ========
1992 $ 2,078 $ 916 $ (680) $ 2,314
========== ======== ============ ========
Restructuring reserves related to
accounts receivable and inventory
Year Ended October 31
- ---------------------
1994 $ 3,890 $ --- $ (344) $ 3,546
========= ======= ============ ========
1993 $ --- $ 3,890 $ --- $ 3,890
========= ======= ============ ========
1992 $ --- $ --- $ --- $ ---
========= ======= ============ ========
20
ESTERLINE TECHNOLOGIES CORPORATION
Form 10-K Report for Fiscal Year Ended
October 31, 1994
INDEX TO EXHIBITS
-----------------
Exhibit
Number Exhibit Page No.
------- ------- --------
3.1 Composite Restated Certificate of Incorporation
of the Company as amended by Certificate of
Amendment dated March 14, 1990. (Incorporated
by reference to Exhibit 19 to 10-Q Report for
the quarter ended July 31, 1990.)
3.2 By-laws of the Company, as amended and restated
December 15, 1988. (Incorporated by reference
to Exhibit 3.2 to 10-K Report for the fiscal
year ended October 31, 1988.)
4.1 Indenture, dated as of October 1, 1980, among
Esterline International Finance N.V., the
Company and Manufacturers Hanover Trust Company,
relating to 8-1/4% Convertible Subordinated
Guaranteed Debentures due 1995 of Esterline
International Finance N.V., convertible into
Common Stock of the Company. (Incorporated
by reference to Exhibit 4.1 to 10-K Report
for the fiscal year ended October 31, 1980.)
Registrant undertakes to furnish to the
Commission, upon request, a copy of any other
instrument defining the rights of long-term
debt of the Registrant and all of its subsidiaries
for which consolidated or unconsolidated
financial statements are required to be
filed.
4.2 Form of Rights Agreement, dated as of December 9, 1992,
between the Company and Chemical Bank, which includes
as Exhibit A thereto the form of Certificate of Designation,
Preferences and Rights of Series A Serial Preferred Stock
and as Exhibit B thereto the form of Rights Certificate
(Incorporated by reference to Exhibit 1 to the Registration
Statement to Form 8-A filed December 17, 1992.)
21
Exhibit
Number Exhibit Page No.
------- ------- --------
10.1 Amendment of Lease and Agreement, dated
March 11, 1959, between the City of Torrance,
California, and Longren Aircraft Company, Inc., as
original lessee; Lease, dated July 1, 1959, between
the City of Torrance and Aeronca Manufacturing
Corporation, as original lessee; and Assignment of
Ground Lease, dated September 26, 1985, from Robert
G. Harris, as successor lessee under the foregoing
leases, to Excellon Industries, Inc., relating to
principal manufacturing facility of Excellon at 24751
Crenshaw Boulevard, Torrance, California. (Incorporated
by reference to Exhibit 10.1 to 10-K Report for
fiscal year ended October 31, 1986.)
10.4 Industrial Lease dated July 17, 1984 between 901 Dexter
Associates and Korry Electronics Co., First Amendment
to Lease dated May 10, 1985, Second Amendment to
Lease dated June 20, 1986, Third Amendment to Lease
dated September 1, 1987, and Notification of Option
Exercise dated January 7, 1991, relating to the
manufacturing facility of Korry Electronics at 901 Dexter
Avenue N., Seattle, Washington. (Incorporated by
reference to Exhibit 10.4 to 10-K Report for the fiscal
year ended October 31, 1991.)
10.4a Fourth Amendment dated July 27, 1994 to Industrial Lease
dated July 17, 1984 between Houg Family Partnership, as
successor to 901 Dexter Associates, and Korry
Electronics Co. 25
10.5 Industrial Lease dated July 17, 1984 between 801 Dexter
Associates and Korry Electronics Co., First Amendment
to Lease dated May 10, 1985, Second Amendment to
Lease dated June 20, 1986, Third Amendment to Lease
dated September 1, 1987, and Notification of Option
Exercise dated January 7, 1991, relating to the
manufacturing facility of Korry Electronics at 801 Dexter
Avenue N., Seattle, Washington. (Incorporated by
reference to Exhibit 10.5 to 10-K Report for the fiscal
year ended October 31, 1991.)
10.5a Fourth Amendment dated March 28, 1994 to Industrial Lease
dated July 17, 1984 between Michael Maloney and the
Bancroft & Maloney general partnership, as successor to
801 Dexter Associates, and Korry Electronics Co. 28
22
Exhibit
Number Exhibit Page No.
------- ------- --------
10.7 Amended and Restated Credit Agreement executed
as of January 25, 1991 dated and effective as of
September 18, 1989 between Esterline Corporation,
certain of its subsidiaries, various financial
institutions and Continental Bank N.A. as Agent.
(Incorporated by reference to Exhibit 10.7 to 10-K
Report for the fiscal year ended October 31, 1990.)
10.8 Amendment, dated as of August 6, 1992, among
Esterline Technologies Corporation, certain of its
subsidiaries, various financial institutions and
Continental Bank N.A., as agent, to that certain
Amended and Restated Credit Agreement, executed as
of January 25, 1991 and dated and effective as of
September 18, 1989, among Esterline Corporation,
certain of its subsidiaries, certain financial
institutions and Continental Bank N.A., as agent.
(Incorporated by reference to Exhibit 10.8 to 10-Q
Report for the quarter ended July 31, 1992.)
10.8a Amendment, dated as of October 31, 1993, among
Esterline Technologies Corporation, certain of its
subsidiaries, various financial institutions and
Continental Bank N.A., as agent, to that certain Amended
and Restated Credit Agreement, executed as of
January 25, 1991 and dated and effective as of
September 18, 1989 and amended August 6, 1992, among
Esterline Corporation, certain of its subsidiaries,
certain financial institutions and Continental Bank N.A.,
as agent. (Incorporated by reference to Exhibit 10.8a
to 10-K Report for the fiscal year ended October 31, 1993.)
10.9 Note Agreement, dated as of July 15, 1992, among Esterline
Technologies Corporation, certain of its subsidiaries, The
Northwestern Mutual Life Insurance Company and New England
Mutual Life Insurance Company relating to 8.75% Senior
Notes due July 30, 2002 of Esterline Technologies
Corporation and certain of its subsidiaries. (Incorporated
by reference to Exhibit 10.9 to 10-Q Report for the quarter
ended July 31, 1992.)
23
Exhibit
Number Exhibit Page No.
------- ------- --------
10.9a Amendment to Note Agreement, executed as of
October 31, 1993, to that certain Note Agreement,
dated and effective as of July 15, 1992, among
Esterline Technologies Corporation, certain of its
subsidiaries, The Northwestern Mutual Life Insurance
Company and New England Mutual Life Insurance Company
relating to 8.75% Senior Notes due July 30, 2002 of
Esterline Technologies Corporation and certain of its
subsidiaries. (Incorporated by reference to Exhibit
10.9a to 10-K Report for the fiscal year ended
October 31, 1993.)
10.10 Compensation of Directors. (Incorporated by
reference to first paragraph under "Other
Information as to Directors" in the definitive
form of the Company's Proxy Statement,
relating to its 1995 Annual Meeting of
Shareholders to be held on March 8, 1995,
filed with the Securities and Exchange Commission
and the New York Stock Exchange on January 13, 1995.)
10.14 Stock Option Plan for Carroll M. Martenson.
(Incorporated by reference to Exhibit B to the
Company's Proxy Statement dated February 9, 1988.)
10.14a Certificate of Grant of Option pursuant to
Stock Option Plan for Carroll M. Martenson.
(Incorporated by reference to Exhibit 10.14a
to 10-K Report for the fiscal year ended
October 31, 1991.)
10.14b Amendment to Certificate of Grant of Option pursuant
to Stock Option Plan for Carroll M. Martenson.
(Incorporated by reference to Exhibit 10.14b to 10-K
Report for the fiscal year ended October 31, 1991.)
11 Schedule setting forth computation of earnings per
share for the five fiscal years ended
October 31, 1994. 35
13 Annual Report to Shareholders for the fiscal
year ended October 31, 1994. (Not filed as
part of this Report except for those portions
thereof incorporated by reference herein.) 37
21 List of subsidiaries. 57
23.1 Consent of Deloitte & Touche LLP. 58
24
Exhibit Management Contracts or Compensatory Plans or
Number Arrangements Page No.
------- -------------------------------------------- --------
10.13 Amended and Restated 1987 Stock Option Plan.
(Incorporated by reference to Exhibit 10.13 to 10-Q
Report for the quarter ended January 31, 1992.)
10.15 Esterline Corporation Supplemental Retirement
Income Plan for Key Executives. (Incorporated
by reference to Exhibit 10.15 to 10-K Report for
the fiscal year ended October 31, 1989.)
10.16b Esterline Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1992 through 1995.
(Incorporated by reference to Exhibit 10.16b to
10-K Report for the fiscal year ended
October 31, 1992)
10.16c Esterline Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1993 through 1996.
(Incorporated by reference to Exhibit 10.16c to
10-K Report for the fiscal year ended
October 31, 1993.)
10.16d Esterline Corporation Long-Term Incentive
Compensation Plan, Fiscal Years 1994 through 1997 59
10.19 Executive Officer Termination Protection Agreement.
(Incorporated by reference to Exhibit 10.19 to
10-K Report for the fiscal year ended
October 31, 1992.)
10.20b Esterline Technologies Corporation Corporate
Management Incentive Compensation Plan for
fiscal year 1994. 65