StockSelector.com
  Research, Select, & Monitor Saturday, December 16, 2017 7:13:22 PM ET  
Trade Ideas The Market Industries Stocks Portfolio

 
Ticker Lookup
Curtiss-Wright Corp.$122.43$2.191.82%

  Quote | Ranking | Chart | Valuations | Sentiment | Industry | News | Earnings | Analysts | More...

Your Target?

 Curtiss-Wright Reports Third Quarter 2016 Financial Results; Maintains Full-Year EPS And Increases Operating Margin Guidance
   Wednesday, October 26, 2016 4:15:12 PM ET

Curtiss-Wright Corporation (CW ) reported financial results for the third quarter and nine months ended September 30, 2016.

Third Quarter 2016 Highlights

-- Earnings per diluted share of $1.02, exceeding expectations;

-- Free cash flow of $100 million, resulting in free cash flow conversion of 218%, as defined herein;

-- Net sales of $507 million;

-- Operating income of $77 million;

-- Operating margin of 15.1%, up 300 basis points as compared with the prior period;

-- Backlog of $2.0 billion increased 6% from December 31, 2015; and

-- Share repurchase of approximately $25 million.

Full-Year 2016 Business Outlook

-- Increasing operating margin guidance by 10 basis points to new range of 14.3% to 14.5%, an increase of 100 to 120 basis points compared with pro forma 2015, despite a slight reduction to sales forecast;

-- Maintaining expectations for diluted earnings per share (EPS) of $4.00 to $4.15; and

-- Maintaining free cash flow guidance range of $300 million to $320 million.

"Our third quarter results were ahead of our expectations, led by strong margin improvement within the Defense and Power segments," said David C. Adams, Chairman and CEO of Curtiss-Wright Corporation. "This performance was primarily driven by increased profitability on our embedded computing products serving the defense markets, as well as higher margins on the AP1000 program, as we continue to support new nuclear power plant construction in the U.S. and China. Further, Curtiss-Wright’s commitment to ongoing margin improvement initiatives is driving increased profitability and generating significant value for our shareholders, as we continue to mitigate challenging conditions in the nuclear aftermarket and general industrial end markets."

"Looking at the remainder of 2016, we are raising our full-year operating margin guidance to 14.3% to 14.5%, a 100 to 120 basis point improvement compared with pro forma 2015 results. As a result, we expect to be in the top quartile of our peer group. In addition, we are maintaining our full-year free cash flow guidance range of $300 to $320 million, which reflects strong year-to-date free cash flow and efficient working capital management."

Third Quarter 2016 Operating Results from Continuing Operations

(In thousands)       3Q-2016       3Q-2015     % Change
                                      ---------                                           ---------                                           --------
Sales                                 $ 507,092                                           $ 525,535                                               (4%)
Operating income                         76,573                                              63,813                                                20%
Operating margin                          15.1%                                               12.1%                                            300 bps

Sales

Sales of $507 million in the third quarter decreased $18 million, or 4%, compared to the prior year, primarily reflecting a $14 million decrease in organic sales as well as $4 million, or 1%, in unfavorable foreign currency translation. Third quarter 2016 sales primarily reflect continued lower demand in the energy sector within the Commercial/Industrial segment, as well as lower aftermarket sales in the Power segment. Those decreases were partially offset by higher AP1000 program and naval defense revenues in the Power segment.

From an end market perspective, sales to the defense markets increased 2%, while sales to the commercial markets decreased 7%, compared to the prior year.

Please refer to the accompanying tables for a breakdown of sales by end market.

Operating Income

Operating income in the third quarter was $77 million, an increase of $13 million, or 20%, compared to the prior year. These results reflect higher profitability on our embedded computing products in the Defense segment and on our AP1000 program in the Power segment, as well as a prior year one-time $7 million pension settlement charge that did not recur in 2016. This was partially offset by reduced operating income in the Commercial/Industrial segment resulting from lower sales volumes.

Operating margin was 15.1%, an increase of 300 basis points over the prior year, reflecting higher segment operating income and the benefits of our ongoing margin improvement initiatives, despite lower sales.

Non-segment Expense

Non-segment expenses decreased 65% compared with the prior year, principally due to lower pension expense resulting from the aforementioned prior year pension charge.

Net Earnings

Third quarter net earnings increased 20% compared with the prior year, as higher operating income was partially offset by higher interest expense, which increased by nearly $2 million compared to the prior year. In addition, the effective tax rate for the current quarter was 31.0%, essentially flat compared with the prior year.

Free Cash Flow

(In thousands)                                    3Q-2016           3Q-2015
                                                               --------------                                          --------------
Net cash provided by operating activities                      $ 110,581                                               $ 106,579
Capital expenditures                                             (10,394 )                                                (8,159 )
                                                               --------- ---                                           --------- ---
Free cash flow                                                 $ 100,187                                                $ 98,420

Free cash flow, defined as cash flow from operations less capital expenditures, was $100 million for the third quarter of 2016, an increase of $2 million compared with the prior year. Net cash provided by operating activities increased $4 million to $111 million, primarily due to higher cash earnings and advanced payments in the current year, partially offset by a large income tax refund in the prior year. Capital expenditures increased by $2 million to $10 million, due to increased investment in a facility expansion in the Commercial/Industrial segment.

New Orders and Backlog

New orders of $500 million in the third quarter increased 1% compared to the prior year, as higher orders within the Defense segment were mainly offset by lower orders within the Power segment. Backlog of $2.0 billion increased 6% from December 31, 2015, primarily due to growth in our naval defense businesses.

Other Items - Share Repurchase

During the third quarter, the Company repurchased 287,900 shares of its common stock for approximately $25 million.

Full-Year 2016 Guidance

The Company is updating its full-year 2016 financial guidance as follows:

                                  Prior Guidance          Current Guidance         Chg vs. 2015
                           ---------------------                                           ---------------------                                           ----------------
Total sales                $2.12 - $2.17 billion                                           $2.11 - $2.16 billion                                                Down 1 - 3%
Operating income             $301 - $313 million                                                       No change                                                  Up 4 - 8%
Operating margin                   14.2% - 14.4%                                                   14.3% - 14.5%                                           Up 100 - 120 bps
Interest expense               $40 - $41 million                                                       No change
Diluted earnings per share         $4.00 - $4.15                                                       No change                                                 Up 7 - 11%
Diluted shares outstanding          45.2 million                                                       No change
Free cash flow               $300 - $320 million                                                       No change                                                Up 10 - 18%

Notes: Full-year 2016 growth rates reflect comparisons to 2015 Pro Forma results, which exclude the one-time China AP1000 fee of $20 million recognized in the fourth quarter of 2015.

Additionally, 2016 growth in free cash flow is comparable to adjusted free cash flow for 2015, which excludes the contribution to the Company’s corporate defined benefit pension plan of $145 million in 2015.

A more detailed breakdown of the Company’s 2016 guidance by segment and by market can be found in the accompanying schedules.

Third Quarter 2016 Segment Performance

Commercial/Industrial

(In thousands)       3Q-2016       3Q-2015     % Change
                                      ---------                                           ---------                                           --------
Sales                                 $ 275,649                                           $ 292,557                                               (6%)
Operating income                         39,067                                              40,259                                               (3%)
Operating margin                          14.2%                                               13.8%                                             40 bps

Sales for the third quarter were $276 million, a decrease of $17 million, or 6%, over the prior year. Organic sales decreased 5%, excluding $3 million in unfavorable foreign currency translation. In the general industrial market, we experienced a continued reduction in sales of severe-service valves, primarily serving the oil and gas markets, as well as lower sales for industrial vehicle products. Within the commercial aerospace market, sales were up slightly, primarily due to higher actuation systems sales to Boeing, partially offset by lower sales of surface treatment services.

Operating income in the third quarter was $39 million, down 3% from the prior year, while operating margin improved 40 basis points to 14.2%. The decrease in operating income primarily reflects lower sales volumes for industrial valves and surface treatment services. However, improved operating margin was primarily driven by higher profitability for industrial vehicle products, despite lower sales volumes, due to ongoing margin improvement initiatives. In addition, favorable foreign currency translation added $1 million to current quarter operating income.

Defense

(In thousands)       3Q-2016         3Q-2015       % Change
                                      ---------                                                                ---------                                                                --------
Sales                                 $ 113,949                                                                $ 117,444                                                                    (3%)
Operating income                         28,822                                                                   25,477                                                                     13%
Operating margin                          25.3%                                                                    21.7%                                                                 360 bps

Sales for the third quarter were $114 million, a decrease of $3 million, or 3%, from the prior year. Organic sales decreased 2% from the prior year, excluding approximately $1 million in unfavorable foreign currency translation. In the aerospace defense market, we experienced lower sales of embedded computing products on various fighter jet and Intelligence, Surveillance and Reconnaissance (ISR) programs. In the ground defense market, we experienced higher sales of our ammunition handling systems. Within the commercial aerospace market, we experienced lower revenues for avionics and electronics equipment, primarily due to reduced helicopter demand.

Operating income in the third quarter was $29 million, an increase of $3 million, or 13%, compared to the prior year, while operating margin increased 360 basis points to 25.3%. These improvements in operating income and margin were driven primarily by favorable mix for our defense electronics products, despite flat sales volumes, as well as the benefits of our ongoing margin improvement initiatives. In addition, there were several non-recurring items that favorably impacted margins in the current quarter. These results were partially offset by lower profitability in our commercial avionics and electronics business. Favorable foreign currency translation added approximately $1 million to current quarter operating income.

Power

(In thousands)       3Q-2016       3Q-2015     % Change
                                      ---------                                           ---------                                           --------
Sales                                 $ 117,494                                           $ 115,534                                                 2%
Operating income                         14,130                                              13,545                                                 4%
Operating margin                          12.0%                                               11.7%                                             30 bps

Sales for the third quarter were $117 million, an increase of $2 million, or 2%, from the prior year. In the naval defense market, our results reflect higher development revenues supporting the ramp-up on the new Ohio-class replacement submarine program, as well as higher sales on the Electromagnetic Aircraft Launching System (EMALS) program. Those gains were partially offset by lower revenues on the CVN-79 aircraft carrier program as production is nearing completion. Within the power generation market, higher revenues on the AP1000 program were more than offset by lower aftermarket sales supporting currently operating nuclear reactors.

Operating income in the third quarter was $14 million, an increase of less than $1 million, or 4%, compared to the prior year, while operating margin increased 30 basis points to 12.0%. These results primarily reflect higher profitability on the AP1000 program, partially offset by reduced profitability in the aftermarket power generation business due to lower sales volumes.

Conference Call Information

The Company will host a conference call to discuss third quarter 2016 financial results at 9:00 a.m. EDT on Thursday, October 27, 2016. A live webcast of the call and the accompanying financial presentation will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.

                                                                                                                                                                                              CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
                                                                                                                                                                                       CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
                                                                                                                                                                                               ($’s in thousands, except per share data)
                                                                                                                                                                                                                                                           
                                                                                                                                         Three Months Ended                                                                                                                                                                            Nine Months Ended
                                                                                                            September 30,                                                                                Change                                                                                   September 30,                                                                                        Change
                                                                                   2016                                                       2015                                                       $                    %                                         2016                                                        2015                                                        $                           %
                                                                   -------------------------------------                      ------------------------------------                     -------------------------------------------                     ---------------------------------------                     --------------------------------------                     ---------------------------------------------------------
Product sales                                                            $ 413,905                                                 $ 427,732                                                $ (13,827 )                     (3 %)                            $ 1,244,148                                                $ 1,313,290                                                $ (69,142 )                            (5 %)
Service sales                                                               93,187                                 97,803                                (4,616 )                     (5 %)                                299,218                                 303,638                                (4,420 )                            (1 %)
                                                                   ------------------------------------                       -----------------------------------                      -----------------------------------                             --------------------------------------                      -------------------------------------                      -----------------------------------
Total net sales                                                            507,092                                                   525,535                                                  (18,443 )                     (4 %)                              1,543,366                                                  1,616,928                                                  (73,562 )                            (5 %)
                                                                                                                                                                                                                                                                                                                                                                                                                   
Cost of product sales                                                      261,488                                                   284,007                                                  (22,519 )                     (8 %)                                806,092                                                    864,701                                                  (58,609 )                            (7 %)
Cost of service sales                                                       61,128                                 56,034                                 5,094     9 %                                 195,515                                 193,286                                 2,229            1 %
                                                                   ------------------------------------                       -----------------------------------                      -----------------------------------                             --------------------------------------                      -------------------------------------                      -----------------------------------
Total cost of sales                                                        322,616                                                   340,041                                                  (17,425 )                     (5 %)                              1,001,607                                                  1,057,987                                                  (56,380 )                            (5 %)
                                                                                                                                                                                                                                                                                                                                                                                                                   
  Gross profit                                                             184,476                                                   185,494                                                   (1,018 )                     (1 %)                                541,759                                                    558,941                                                  (17,182 )                            (3 %)
                                                                                                                                                                                                                                                                                                                                                                                                                   
Research and development expenses                                           14,071                                                    15,050                                                     (979 )                     (7 %)                                 44,467                                                     45,633                                                   (1,166 )                            (3 %)
Selling expenses                                                            26,273                                                    30,247                                                   (3,974 )                    (13 %)                                 85,025                                                     90,440                                                   (5,415 )                            (6 %)
General and administrative expenses                                         67,559                                 76,384                                (8,825 )                    (12 %)                                210,342                                 220,778                               (10,436 )                            (5 %)
                                                                   ------------------------------------                       -----------------------------------                      -----------------------------------                             --------------------------------------                      -------------------------------------                      -----------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                   
  Operating income                                                          76,573                                                    63,813                                                   12,760                       20 %                                 201,925                                                    202,090                                                     (165 )                             0 %
                                                                                                                                                                                                                                                                                                                                                                                                                   
Interest expense                                                            10,488                                                     8,972                                                    1,516                       17 %                                  30,694                                                     26,953                                                    3,741                              14 %
Other income, net                                                              483                                    161                                   322       NM                                    818                                     605                                   213                     NM
                                                                   ------------------------------------                       -----------------------------------                      -----------------------------------                             --------------------------------------                      -------------------------------------                      -----------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                   
Earnings before income taxes                                                66,568                                                    55,002                                                   11,566                       21 %                                 172,049                                                    175,742                                                   (3,693 )                            (2 %)
Provision for income taxes                                                 (20,636 )                                                 (16,860 )                                                 (3,776 )                     22 %                                 (53,335 )                                                  (54,256 )                                                    921           (2 %)
                                                                   ------------------------------------                       -----------------------------------                      -----------------------------------                             --------------------------------------                      -------------------------------------                      -----------------------------------
Earnings from continuing operations                                      $  45,932           $  38,142                             $   7,790    20 %                             $   118,714                             $   121,486                             $  (2,772 )                            (2 %)
                                                                   ======= ======= ====================                       ====== ======= ====================                      ====== ======= ====================                             ======= ========= ====================                      ====== ========= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                   
Loss from discontinued operations, net of tax                       --                                                    (4,258 )                                                  4,258                          NM                         --                                                    (45,874 )                                                 45,874                                        NM
                                                                                                                                                                                                                                                                                
                                                                   -------------------------------------                      ------------------------------------                     ------------------------------------                            ---------------------------------------                     --------------------------------------                     ------------------------------------
Net earnings                                                             $  45,932                              $  33,884                             $  12,048    36 %                             $   118,714                             $    75,612                             $  43,102           57 %
                                                                   ======= ======= ====================                       ====== ======= ====================                      ====== ======= ====================                             ======= ========= ====================                      ====== ========= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                   
Basic earnings per share
  Earnings from continuing operations                                    $    1.04                                                 $    0.82                                                                                                                 $      2.67                                                $      2.58
  Earnings from discontinued operations                             --                                  (0.09 )                                                                                                            --                                   (0.97 )
                                                                   ------------------------------------                       -----------------------------------                                                                                      --------------------------------------                      -------------------------------------
Total                                                                    $    1.04                              $    0.73                                                                                              $      2.67                             $      1.61  
                                                                   ======= ======= ====================                       ====== ======= ====================                                                                                      ======= ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                   
Diluted earnings per share
  Earnings from continuing operations                                    $    1.02                                                 $    0.80                                                                                                                 $      2.63                                                $      2.53
  Earnings from discontinued operations                             --                                  (0.09 )                                                                                                            --                                   (0.96 )
                                                                   ------------------------------------                       -----------------------------------                                                                                      --------------------------------------                      -------------------------------------
Total                                                                    $    1.02                              $    0.71                                                                                              $      2.63                             $      1.57  
                                                                   ======= ======= ====================                       ====== ======= ====================                                                                                      ======= ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                                                                   
Dividends per share                                                      $    0.13                              $    0.13                                                                                              $      0.39                             $      0.39  
                                                                   ======= ======= ====================                       ====== ======= ====================                                                                                      ======= ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                   
Weighted average shares outstanding:
   Basic                                                                    44,323                                                    46,366                                                                                                                      44,457                                                     47,082
   Diluted                                                                  44,997                                                    47,395                                                                                                                      45,128                                                     48,106
                                                                                                                                                                                                                                                                                                                                                                                                                   
NM- not meaningful
                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                        CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
                                                                                                     CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                                                                                           ($’s in thousands, except par value)
                                                                                                                                              
                                                                                                                                                                                                                            
                                                                                                                                                                                                                            
                                                                                                                  September 30,                                              December 31,                                               Change
                                                                                                                      2016                                                       2015                                                      %
                                                                                                     --------------------------------------                     --------------------------------------                     --------------------------------
Assets
  Current assets:
                               Cash and cash equivalents                                                  $   452,053                                                $   288,697                                                   57 %
                               Receivables, net                                                               462,004                                                    566,289                                                  (18 %)
                               Inventories                                                                    399,638                                                    379,591                                                    5 %
                               Other current assets                                                            49,438                                  40,306                                23 %
                                                                                                     -------------------------------------                      -------------------------------------
                                 Total current assets                                                       1,363,133                               1,274,883                                 7 %
                                                                                                     -------------------------------------                      -------------------------------------
    Property, plant, and equipment, net                                                                       387,458                                                    413,644                                                   (6 %)
    Goodwill                                                                                                  964,446                                                    972,606                                                   (1 %)
    Other intangible assets, net                                                                              283,670                                                    310,763                                                   (9 %)
    Other assets                                                                                               15,277                                  17,715                               (14 %)
                                                                                                     -------------------------------------                      -------------------------------------
                                 Total assets                                                             $ 3,013,984                             $ 2,989,611                                 1 %
                                                                                                     ====== ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                            
Liabilities
  Current liabilities:
                               Current portion of long-term and short term debt                           $       802                                                $     1,259                                                  (36 %)
                               Accounts payable                                                               133,101                                                    163,286                                                  (18 %)
                               Accrued expenses                                                               116,778                                                    131,863                                                  (11 %)
                               Income taxes payable                                                             6,461                                                      7,956                                                  (19 %)
                               Deferred revenue                                                               196,609                                                    181,671                                                    8 %
                               Other current liabilities                                                       34,264                                  37,190                                (8 %)
                                                                                                     -------------------------------------                      -------------------------------------
                                 Total current liabilities                                                    488,015                                 523,225                                (7 %)
                                                                                                     -------------------------------------                      -------------------------------------
  Long-term debt, net                                                                                         966,040                                                    951,946                                                    1 %
  Deferred tax liabilities, net                                                                                73,650                                                     54,447                                                   35 %
  Accrued pension and other postretirement benefit costs                                                      100,999                                                    103,723                                                   (3 %)
  Long-term portion of environmental reserves                                                                  14,534                                                     14,017                                                    4 %
  Other liabilities                                                                                            83,731                                  86,830                                (4 %)
                                                                                                     -------------------------------------                      -------------------------------------
                               Total liabilities                                                            1,726,969                               1,734,188                                 0 %
                                                                                                     -------------------------------------                      -------------------------------------
                                                                                                                                                                                                                            
Stockholders’ equity
  Common stock, $1 par value                                                                              $    49,187                                                $    49,190                                                    0 %
  Additional paid in capital                                                                                  134,597                                                    144,923                                                   (7 %)
  Retained earnings                                                                                         1,692,026                                                  1,590,645                                                    6 %
  Accumulated other comprehensive loss                                                                       (248,069 )                                                 (225,928 )                                                 10 %
  Less: cost of treasury stock                                                                               (340,726 )                                                 (303,407 )                                                 12 %
                                                                                                     -------------------------------------                      -------------------------------------
                               Total stockholders’ equity                                                   1,287,015                               1,255,423                                 3 %
                                                                                                     -------------------------------------                      -------------------------------------
                                                                                                                                              
                                                                                                     --------------------------------------                     --------------------------------------
                               Total liabilities and stockholders’ equity                                 $ 3,013,984                             $ 2,989,611                                 1 %
                                                                                                     ====== ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                                       
                                                                                                                                          CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
                                                                                                                                                SEGMENT INFORMATION (UNAUDITED)
                                                                                                                                                      ($’s in thousands)
                                                                                                                                                                                       
                                                                                                                                                                                                                                                                                                           
                                                                                                  Three Months Ended                                                                                                                                Nine Months Ended
                                                                                                     September 30,                                                                                                                                    September 30,
                                                 --------------------------------------------------------------------------------------------------------------------                     -------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                              Change                                                                                                                                             Change
                                                               2016                                                  2015                                        %                                       2016                                                    2015                                               %
                                                 ---------------------------------                     ---------------------------------                     --------                     -----------------------------------                     -----------------------------------                     ---------------------
Sales:
---------------------------
Commercial/Industrial                              $ 275,649                                             $ 292,557                                            (6 %)                         $   840,422                                             $   894,909                                                   (6 %)
Defense                                              113,949                                               117,444                                            (3 %)                             333,301                                                 350,595                                                   (5 %)
Power                                                117,494                            115,534                          2 %                              369,643           371,424                                 0 %
                                                 --------------------------------                      --------------------------------                                                   ---------------------------------- -------------------- ----------------------------------
                                                                                                                                                                                                                                                                                                           
Total sales                                        $ 507,092                                             $ 525,535                                            (4 %)                         $ 1,543,366                                             $ 1,616,928                                                   (5 %)
                                                                                                                                                                                                                                                                                                           
Operating income (expense):
---------------------------
Commercial/Industrial                              $  39,067                                             $  40,259                                            (3 %)                         $   108,076                                             $   128,801                                                  (16 %)
Defense                                               28,822                                                25,477                                            13 %                               64,276                                                  67,895                                                   (5 %)
Power                                                 14,130                             13,545                          4 %                               44,872                               34,511                                30 %
                                                 --------------------------------                      --------------------------------                                                   ----------------------------------                      ----------------------------------
                                                                                                                                                                                                                                                                                                           
Total segments                                     $  82,019                                             $  79,281                                             3 %                          $   217,224                                             $   231,207                                                   (6 %)
Corporate and other                                   (5,446 )                                             (15,468 )                                          65 %                              (15,299 )                                               (29,117 )                                                 47 %
                                                 ----------  --------------------                      ----------  --------------------                                                   ------------  --------------------                      ------------  --------------------
                                                                                                                                                                                                                                                                                                           
Total operating income                             $  76,573                          $  63,813                         20 %                          $   201,925                          $   202,090                                 0 %
                                                 === ======= ====================                      === ======= ====================                                                   === ========= ====================                      === ========= ====================
                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                           
Operating margins:
---------------------------
Commercial/Industrial                                   14.2                    %                             13.8                    %                                                            12.9                    %                               14.4                    %
Defense                                                 25.3                    %                             21.7                    %                                                            19.3                    %                               19.4                    %
Power                                                   12.0                    %                             11.7                    %                                                            12.1                    %                                9.3                    %
Total Curtiss-Wright                                    15.1                    %                             12.1                    %                                                            13.1                    %                               12.5                    %
                                                                                                                                                                                                                                                                                                           
Segment margins                                         16.2                    %                             15.1                    %                                                            14.1                    %                               14.3                    %
                                                                                                                                                                                                                                                                                                           
                                                                                                                                                             CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
                                                                                                                                                                   SALES BY END MARKET (UNAUDITED)
                                                                                                                                                                         ($’s in thousands)
                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                     
                                                                                                                   Three Months Ended                                                                                                                                            Nine Months Ended
                                                                                                                      September 30,                                                                                                                                                September 30,
                                                               --------------------------------------------------------------------------------------------------------------------------                     ------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                  Change                                                                                                                                                         Change
                                                                               2016                                                     2015                                         %                                         2016                                                       2015                                                      %
                                                               ------------------------------------                     ------------------------------------                     --------                     --------------------------------------                     --------------------------------------                     --------------------------------
Defense markets:
Aerospace                                                           $  77,990                                                $  81,758                                            (5 %)                            $   215,586                                                $   228,865                                                   (6 %)
Ground                                                                 19,599                                                   18,522                                             6 %                                  58,654                                                     61,415                                                   (4 %)
Naval                                                                 100,054                                                   96,229                                             4 %                                 297,512                                                    286,113                                                    4 %
Other                                                                   4,391                                 1,410                        211 %                                   8,185                                   4,960                                65 %
                                                               -----------------------------------                      -----------------------------------                                                   -------------------------------------                      -------------------------------------
Total Defense                                                       $ 202,034                                                $ 197,919                                             2 %                             $   579,937                                                $   581,353                                                    0 %
                                                                                                                                                                                                                                                                                                                                     
Commercial markets:
Aerospace                                                           $  94,241                                                $  94,476                                             0 %                             $   299,052                                                $   294,554                                                    2 %
Power Generation                                                       89,600                                                   87,371                                             3 %                                 285,030                                                    294,848                                                   (3 %)
General Industrial                                                    121,217                               145,769                        (17 %)                                379,347                                 446,173                               (15 %)
                                                               -----------------------------------                      -----------------------------------                                                   -------------------------------------                      -------------------------------------
Total Commercial                                                    $ 305,058                                                $ 327,616                                            (7 %)                            $   963,429                                                $ 1,035,575                                                   (7 %)
                                                                                                                                                                                                                 
                                                               ------------------------------------                     ------------------------------------                                                  --------------------------------------                     --------------------------------------
Total Curtiss-Wright                                                $ 507,092                             $ 525,535                         (4 %)                            $ 1,543,366                             $ 1,616,928                                (5 %)
                                                               ====== ======= ====================                      ====== ======= ====================                                                   ====== ========= ====================                      ====== ========= ====================
                                                                                                                                                                                                                                                                                                                                                

Use of Non-GAAP Financial Information (Unaudited)

The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these non-GAAP measures provide investors with additional insight into the Company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Organic Revenue and Organic Operating Income

The Corporation discloses organic revenue and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic revenue and organic operating income are defined as revenue and operating income excluding the impact of foreign currency fluctuations and contributions from acquisitions made during the last twelve months.

                                                                                                                                             Three Months Ended
                                                                                                                                                                   September 30,
                                                                                                                                                                   2016 vs. 2015
                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Commercial/Industrial                           Defense                                            Power                                                       Total Curtiss-Wright
                                      -----------------------------------------                     -------------------------------------                     ----------------------------------------------------------                                ----------------------------------------------------
                                         Sales     Operating                      Sales   Operating                      Sales   Operating                                     Sales          Operating
                                                                       income                                                    income                                                    income                                                                                             income
                                      --------                       --------                       ----                       --------                       ----                       --------- --------------------                                 --------                       -------------------
Organic                                 (5 %)                          (6 %)                        (2 %)                        10 %                          2 %                           4%                                        (3 %)                                17 %
Acquisitions                             0 %                            0 %                          0 %                          0 %                          0 %                           0%                                         0 %                                  0 %
Foreign Currency                        (1 %)                           3 %                         (1 %)                         3 %                          0 %                           0%                                        (1 %)                                 3 %
                                      ---- ----                      ---- ----                      -- --                      ---- ----                      -- --                      --------- --------------------                                 ---- ----                      ---------- ---------
Total                                   (6 %)                          (3 %)                        (3 %)                        13 %                          2 %                           4%                     (4 %)                                20 %
                                                                                                                                                                                                                                                                                        
                                                                                                                                                                 Nine Months Ended
                                                                                                                                                                   September 30,
                                                                                                                                                                   2016 vs. 2015
                                      ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Commercial/Industrial                                              Defense                                                               Power                                                                          Total Curtiss-Wright
                                      -----------------------------------------                     -------------------------------------                     ----------------------------------------------------------                                ----------------------------------------------------
                                         Sales                        Operating                      Sales                      Operating                      Sales                      Operating                                     Sales                             Operating
                                                                       income                                                    income                                                    income                                                                                             income
                                      --------                       --------                       ----                       --------                       ----                       --------- --------------------                                 --------                       -------------------
Organic                                 (5 %)                         (19 %)                        (4 %)                       (12 %)                         0 %                           30%                                       (4 %)                                (4 %)
Acquisitions                             0 %                            0 %                          0 %                          0 %                          0 %                           0%                                         0 %                                  0 %
Foreign Currency                        (1 %)                           3 %                         (1 %)                         7 %                          0 %                           0%                                        (1 %)                                 4 %
                                      ---- ----                      ---- ----                      -- --                      ---- ----                      -- --                      --------- --------------------                                 ---- ----                      ---------- ---------
Total                                   (6 %)                         (16 %)                        (5 %)                        (5 %)                         0 %                           30%                    (5 %)                                 0 %

Free Cash Flow and Free Cash Flow Conversion

The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as cash flow provided by operating activities less capital expenditures. The Corporation discloses free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as free cash flow divided by net earnings from continuing operations.

                                                                                                                                   CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
                                                                                                                                       NON-GAAP FINANCIAL DATA (UNAUDITED)
                                                                                                                                               ($’s in thousands)
                                                                                                                                                                            
                                                                                                                                                                                                                                                                             
                                                                                                                                    Three Months Ended                                                                                                   Nine Months Ended
                                                                                                                                       September 30,                                                                                                       September 30,
                                                                                                              2016                                                      2015                                                      2016                                                      2015
                                                                                              -------------------------------------                     -------------------------------------                     -------------------------------------                     ------------------------------------
                                                                                                                                                                                                                                                                             
Net cash provided by (used by) operating activities                                                 $ 110,581                                                 $ 106,579                                                 $ 267,212                                                $  (4,691 )
Capital expenditures                                                                                  (10,394 )                                                  (8,159 )                                                 (26,127 )                                                (23,848 )
                                                                                              ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
Free cash flow                                                                                      $ 100,187                              $  98,420                              $ 241,085                             $ (28,539 )
                                                                                              ------- ------- --------------------                      ------- ------- --------------------                      ------- ------- --------------------                      ------ ------- --------------------
                                                                                                                                                                                                                                                                             
Pension Payment                                                                                --                                            --                                            --                                                  145,000
                                                                                                                                                                                                                    
                                                                                              -------------------------------------                     -------------------------------------                     -------------------------------------                     ------------------------------------
Adjusted free cash flow                                                                             $ 100,187                              $  98,420                              $ 241,085                             $ 116,461  
                                                                                              ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                             
Free Cash Flow Conversion                                                                                 218 %                                                     258 %                                                     203 %                                                     96 %
                                                                                              ------------------------------------                      ------------------------------------                      ------------------------------------                      -----------------------------------
                                                                                                                                                                                                                                                                                            
                                                                                                    CURTISS-WRIGHT CORPORATION
                                                                                                        
                                                                                            2016 Guidance (from Continuing Operations)
                                                                                                      As of October 26, 2016
                                                                                             ($’s in millions, except per share data)
                                                                                                                                      
                                                                                                                                                                                                 
                                                 2015                                              2015 Pro                                                                 2016 Guidance (Current)
                                               Reported                                             Forma*
                                    ----------------------------                        ----------------------------
Sales:
-----------------------------------
Commercial/Industrial                 $ 1,185                                             $ 1,185                                             $ 1,120                                                $  1,145
Defense                                   477                                                 477                                                 475                                                     485
Power                                     543                              523                              515                                  530  
                                    ------------------------------                      ------------------------------                      ------------------------------                      ----------------------------------
Total sales                           $ 2,206                                             $ 2,186                                             $ 2,110                                                $  2,160
                                                                                                                                                                                                 
Operating income:
-----------------------------------
Commercial/Industrial                 $   172                                             $   172                                             $   158                                                $    163
Defense                                    99                                                  99                                                  96                                                     100
Power                                      75                               55                               70                                   73  
                                    ------------------------------                      ------------------------------                      ------------------------------                      ----------------------------------
Total segments                            346                                                 326                                                 324                                                     336
Corporate and other                       (35 )                                               (35 )                                               (23 )                                                   (24 )
                                    ------------------------------                      ------------------------------                      ------------------------------                      ----------------------------------
Total operating income                $   311                          $   291                          $   301                             $    313  
                                    === ===== ====================                      === ===== ====================                      === ===== ====================                      ====== ====== ====================
                                                                                                                                                                                                 
Interest expense                      $   (36 )                                           $   (36 )                                           $   (40 )                                              $    (41 )
Earnings before income taxes              275                                                 255                                                 262                                                     272
Provision for income taxes                (83 )                                               (77 )                                               (81 )                                                   (84 )
                                    ------------------------------                      ------------------------------                      ------------------------------                      ----------------------------------
Net earnings                          $   192                          $   178                          $   181                             $    188  
                                    === ===== ====================                      === ===== ====================                      === ===== ====================                      ====== ====== ====================
                                                                                                                                                                                                 
Reported diluted earnings per share   $  4.04                                             $  3.74                                             $  4.00                                                $   4.15
Diluted shares outstanding               47.6                                                47.6                                                45.2                                                    45.2
Effective tax rate                       30.1 %                                              30.1 %                                              31.0 %                                                  31.0 %
                                                                                                                                                                                                 
                                                                                                                                                                                                 
Operating margins:
-----------------------------------
Commercial/Industrial                    14.5 %                                              14.5 %                                              14.1 %                                                  14.3 %
Defense                                  20.7 %                                              20.7 %                                              20.3 %                                                  20.5 %
Power                                    13.8 %                                              10.5 %                                              13.6 %                                                  13.8 %
Total operating margin                   14.1 %                                              13.3 %                                              14.3 %                                                  14.5 %
                                                                                                                                                                                                 
Note: Full year amounts may not add due to rounding

* Excludes the one-time China AP1000 fee of $20 million recognized as revenue and operating income in the fourth quarter of 2015. This affects the Power segment and Total Curtiss-Wright.

                                                  CURTISS-WRIGHT CORPORATION
                                   2016 Sales Growth Guidance by End Market (from Continuing
                                                          Operations)
                                                    As of October 26, 2016
                                                                 
                                                (Prior)                                                        (Current)
                                         2016 % Change vs 2015                                           2016 % Change vs 2015
                                        ---------------------                                           ---------------------
                                                                                                         
Defense Markets
---------------------------------------
Aerospace                                        Flat                                                            Flat
Ground                                         (2 - 4%)                                                        (2 - 4%)
Navy                                            0 - 2%                                                          6 - 8%
Total Defense (Including Other Defense)          Flat                                                         Up 1% to 3%
                                                                                                         
Commercial Markets
---------------------------------------
Commercial Aerospace                             Flat                                                            Flat
Power Generation                                0 - 2%                                                         (1 - 3%)
General Industrial                             (5 - 9%)                                                       (10 - 12%)
Total Commercial                               (2 - 4%)                                                        (4 - 6%)
                                                                                                         
Total Curtiss-Wright Sales                   Down 1% to 3%                                                   Down 1% to 3%
                                                                                                         
Note: Full year amounts may not add due to rounding
 

* The Company’s full-year 2016 guidance reflects sales growth rates compared to 2015 Pro Forma results, which exclude the one-time China AP1000 fee of $20 million recognized as revenue in the fourth quarter of 2015. This affects 2016 growth rates for Power Generation, Total Commercial and Total Curtiss-Wright sales.

About Curtiss-Wright Corporation

Curtiss-Wright Corporation (CW ) is a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing reliable solutions through trusted customer relationships. The company employs approximately 8,400 people worldwide. For more information, visit www.curtisswright.com.

Certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the Company’s acquisitions, and future cash flow from operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, and subsequent reports filed with the Securities and Exchange Commission.

This press release and additional information are available at www.curtisswright.com.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20161026006799r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20161026006799/en/

SOURCE: Curtiss-Wright Corporation

Curtiss-Wright Corporation 
Jim Ryan, 704-869-4621 
Jim.Ryan@curtisswright.com


Register |  Password |  Feedback |  Copyright |  Usage Agreement |  Privacy Policy |  Advertising |  About Us |  Contact Us |  FAQ 

Past performance is not indicative of future results

StockSelector.com, the StockSelector.com logo, and News Selects are trademarks of StockSelector.com.
Copyright © 1998 - 2017 StockSelector.com. All rights reserved.