FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended January 28, 2005

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
(Exact name of registrant as specified in its charter)

Delaware	13-2595091
(State or other Jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

500 108th Avenue N.E., Bellevue, Washington 98004
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code 425/453-9400

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.

Yes No X

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes X No

As of March 4, 2005, 25,088,107 shares of the issuer’s common stock were outstanding.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEET
As of January 28, 2005 and October 29, 2004
(In thousands, except share amounts)

	January 28, 2005		October 29, 2004
ASSETS	(Unaudited)
Current Assets
Cash and cash equivalents	$	153,312	$	29,479
Cash in escrow		13,570		8,511
Short-term investments		8,820		—
Accounts receivable, net of allowances
of $3,881 and $2,669		119,615		132,206
Inventories
Raw materials and purchased parts		64,390		58,736
Work in process		43,817		43,326
Finished goods		17,988		16,992

		126,195		119,054

Deferred income tax benefits		21,364		20,984
Prepaid expenses		8,416		9,441
Other current assets		288		435

Total Current Assets		451,580		320,110

Property, Plant and Equipment		271,479		275,437
Accumulated depreciation		130,584		130,302

		140,895		145,135

Other Non-Current Assets
Goodwill		245,860		247,817
Intangibles, net		169,360		169,876
Debt issuance costs, net of accumulated
amortization of $1,096 and $928		5,650		5,818
Deferred income tax benefits		10,601		11,216
Other assets		27,857		32,861

	$	1,051,803	$	932,833

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ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEET
As of January 28, 2005 and October 29, 2004
(In thousands, except share amounts)

	January 28, 2005		October 29, 2004
LIABILITIES AND SHAREHOLDERS’ EQUITY	(Unaudited)
Current Liabilities
Accounts payable	$	39,970	$	37,867
Accrued liabilities		87,394		97,038
Credit facilities		3,871		6,977
Current maturities of long-term debt		30,984		1,031
Federal and foreign income taxes		7,096		6,678

Total Current Liabilities		169,315		149,591

Long-Term Liabilities
Long-term debt, net of current maturities		218,709		249,056
Deferred income taxes		45,307		43,443
Other liabilities		25,607		29,852

Commitments and Contingencies		—		—

Minority Interest		2,391		2,378

Shareholders’ Equity
Common stock, par value $.20 per share,
authorized 60,000,000 shares, issued and
outstanding 25,073,811 and 21,319,698 shares		5,015		4,264
Additional paid-in capital		229,582		120,553
Retained earnings		326,323		309,155
Accumulated other comprehensive income		29,554		24,541

Total Shareholders’ Equity		590,474		458,513

	$	1,051,803	$	932,833

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ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Month Periods Ended January 28, 2005 and January 30, 2004
(Unaudited)
(In thousands, except per share amounts)

	Three Months Ended
	January 28, 2005			January 30, 2004

Net Sales	$	190,243		$	129,454
Cost of Sales		131,692			90,774

		58,551			38,680
Expenses
Selling, general & administrative		31,589			30,129
Research, development & engineering		9,247			5,423

Total Expenses		40,836			35,552

Operating Earnings From Continuing Operations		17,715			3,128

Other (income) expense		38			(556	)
Interest income		(535	)		(313	)
Interest expense		4,682			4,292

Other Expense, Net		4,185			3,423

Income (Loss) From Continuing Operations Before Income Taxes		13,530			(295	)
Income Tax Expense (Benefit)		3,764			(1,881	)

Income From Continuing Operations
Before Minority Interest		9,766			1,586
Minority Interest		(13	)		—

Income From Continuing Operations		9,753			1,586

Income From Discontinued Operations, Net of Tax		7,415			292

Net Earnings	$	17,168		$	1,878

Earnings Per Share – Basic:
Continuing operations	$	.41		$	.08
Discontinued operations		.30			.01

Earnings per share – basic	$	.71		$	.09

Earnings Per Share – Diluted:
Continuing operations	$	.40		$	.08
Discontinued operations		.30			.01

Earnings per share – diluted	$	.70		$	.09

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ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Month Periods Ended January 28, 2005 and January 30, 2004
(Unaudited)
(In thousands)

	Three Months Ended
	January 28, 2005			January 30, 2004
Cash Flows Provided (Used) by Operating Activities
Net earnings	$	17,168		$	1,878
Minority interest		13			—
Depreciation and amortization		9,801			7,682
Deferred income taxes		1,749			1,301
Gain on sale of land		—			(557	)
Gain on sale of discontinued operation		(9,771	)		—
Working capital changes, net of effect of acquisitions
Accounts receivable		12,068			15,828
Inventories		(8,430	)		(1,024	)
Prepaid expense		1,168			(556	)
Accounts payable		1,672			(3,197	)
Accrued liabilities		(15,500	)		(8,218	)
Federal and foreign income taxes		343			(5,321	)
Other liabilities		627			—
Other, net		(943	)		(5,026	)

		9,965			2,790

Cash Flows Provided (Used) by Investing Activities
Purchases of capital assets		(4,021	)		(5,170	)
Proceeds from sale of land		—			1,159
Proceeds from sale of discontinued operation		23,700			—
Escrow deposit		—			—
Capital dispositions		123			385
Purchase of short-term investments		(8,820	)		—
Sale of short-term investments		—			5,021
Acquisitions of businesses, net of cash acquired		(3,346	)		(6,593	)

		7,636			(5,198	)

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ESTERLINE TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
For the Three Month Periods Ended January 28, 2005 and January 30, 2004
(Unaudited)
(In thousands)

	Three Months Ended
	January 28, 2005			January 30, 2004
Cash Flows Provided (Used) by Financing Activities
Proceeds provided by stock issuance under
employee stock plans		750			1,171
Proceeds provided by sale of common stock		109,030			—
Debt and other issuance costs		—			(125	)
Net change in credit facilities		(3,078	)		540
Repayment of long-term obligations		(452	)		(29,044	)

		106,250			(27,458	)
Effect of Foreign Exchange Rates on Cash		(18	)		6,004

Net Increase (Decrease) in Cash and Cash Equivalents		123,833			(23,862	)

Cash and Cash Equivalents – Beginning of Period		29,479			131,363

Cash and Cash Equivalents – End of Period	$	153,312		$	107,501

Supplemental Cash Flow Information
Cash Paid for Interest	$	8,394		$	9,185
Cash Paid for Taxes		4,716			1,376

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ESTERLINE TECHNOLOGIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Month Periods Ended January 28, 2005 and January 30, 2004

The consolidated balance sheet as of January 28, 2005, the consolidated statement of operations for the three month periods ended January 28, 2005 and January 30, 2004, and the consolidated statement of cash flows for the three month periods ended January 28, 2005 and January 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 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.

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.

Basic earnings per share is computed on the basis of the weighted average number of shares outstanding during the year. 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 24,034,000 and 21,099,000 for the first fiscal quarter in 2005 and 2004, respectively. The weighted average number of shares outstanding used to compute diluted earnings per share was 24,421,000 and 21,436,000 for the first fiscal quarter in 2005 and 2004, respectively.

5.	In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standa