About Advanced Input Devices, Inc.

You couldn't build an entire jet just from Esterline Technologies products, but it would hard to fly one without them. The aerospace company's offerings extend from the cockpit to electrical subsystems to materials inside and outside aircraft. It makes avionics that control and communicate, sensors and power switching devices that monitor conditions, and materials necessary for commercial and military aircraft. Esterline sells mostly to the US government, particularly the Department of Defense, and aircraft manufacturers. About a fifth of sales come from high-end non-aerospace products. There can be as much as $1 million worth of Esterline products in jet fighters and airliners.

Operations

Esterline Technologies' businesses are Avionics & Controls, Sensors & Systems, and Advanced Materials. Avionics & Controls, more than 40% of sales, focuses on integrated cockpit systems, technology interface systems for commercial and military aircraft, and similar devices for land- and sea-based military vehicles, secure communication systems, military audio and data products, embedded communication intercept receivers, specialized medical equipment, and other industrial applications.

Sensors & Systems, about 35% of sales, includes operations that produce high-precision temperature and pressure sensors, electrical power switching, electrical interconnection systems, and other related systems principally for aerospace and defense customers.

Advanced Materials, more than a fifth of sales, focuses on thermally engineered components for critical aerospace applications, high-performance elastomer products used in a wide range of commercial aerospace and military applications, and combustible ordnance and warfare countermeasure devices. All segments include sales to domestic, international, defense and commercial customers.

The company sells aftermarket equipment to commercial and military aerospace customers. Spare parts account for about 10% of that revenue with retrofit and repair services accounting for less than 5%.

Esterline owns about 2.4 million sq. ft, of manufacturing facilities and properties and it leases about 2.3 million sq. ft.

Geographic Reach

Esterline Technologies has manufacturing facilities in Canada, China, the Dominican Republic, France, Japan, Germany, India, Mexico, Morocco, the UK, and the US, and sales and service operations in Brazil, China, Singapore, and the US. About 55% of the company's sales are to international customers, primarily in Canada, France, and the UK..

Sales and Marketing

Esterline Technologies' makes about 40% of sales to the commercial aerospace market, and about 30% each to the defense and general industrial markets. Top customers include the US government, particularly the US Department of Defense, Northrop Grumman, Rolls-Royce, Boeing, General Electric, Honeywell, Airbus, and Lockheed Martin.

Financial Performance

Esterline barely cleared the runway in 2017 (ended September), posting a less-than-1% revenue increase to $2 billion from 2016. The Sensors & Systems segment was responsible for the increase, reporting a 4% rise in sales. It had higher sales of ground fault indicators due to an FAA requirement, power systems for defense and industrial applications, and connection technologies systems for industrial applications. Sales in the Avionics & Controls segment dropped 2% and Advanced Materials sales were flat year-to-year.

Net income jumped 15% to $117 million in 2017 from 2016, lifted by lower sales, general, and administration costs.

The higher net income and cash receipts boosted cash flow from operations to more than $193 million in 2017 from about $167 million in 2016.

Strategy

One factor working in Esterline Technologies' favor is that it's hard to get some of the jobs it does. Supplying equipment government and aerospace manufacturers requires passing stringent regulatory hurdles. Esterline has numerous customers with which it has achieved certification. New competitors would have to work their way through the certification maze to have a chance for some of Esterline's jobs.

Internally, the company has moved to reduce costs. It is training employees to better shop and negotiate for supplies, seeking to achieve lower costs for services and materials and make it a sustaining part of its business.

Esterline is saving money and expanding its geographical footprint (which can be good in drumming up international sales) by putting research and development sites around the world. The company has about 100 engineers working at a recently opened design center in India.

Mergers and Acquisitions

Esterline Technologies has been a regular acquirer of Tier 3 suppliers, having made more than 30 deals in the past two decades. It has been quiet, however, for the past few years.

In 2015 Esterline acquired the defense, aerospace and training display businesses of Barco, which designs and manufactures displays, including a line for use in harsh environments and other visualization systems. It sells to avionics, defense, air traffic control, and training and simulation markets. The purchase price was about $187 million. The former Barco businesses are part of the Avionics & Controls segment.

In the previous year, Esterline purchased Sunbank Family of Companies, a maker of electric cables, conduits and accessories, to be part of its Sensors & Systems group. It also bought gaming input device maker Gamesman Group, which is now part of Avionics & Controls. The deals cost $45 million and $41 million, respectively.

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Advanced Input Devices, Inc.

600 W Wilbur Ave
Coeur D Alene, ID 83815-9496
Phone: 1 (208) 765-8000
Fax: 1 (208) 772-7613

Stats

  • Employer Type: Public
  • Account Manager: Brad Armitage
  • Director of Business Development: Scott Byre
  • Manager: Mark Kelley
  • Employees: 330

Major Office Locations

  • Coeur D Alene, ID