News Details
CURTISS-WRIGHT'S SALES INCREASE 22% WITH NORMALIZED OPERATING INCOME INCREASING 19% FROM FIRST QUARTER OF 2001
May 01, 2002
LYNDHURST, N.J., May 1, 2002 /PRNewswire-FirstCall via COMTEX/ -- Curtiss-Wright Corporation (NYSE: CW) announced today its financial results for the first quarter of 2002. The first quarter's highlights are as follows:
- Sales for the first quarter in 2002 increased 22% to $97,787,000 from $79,917,000 for the same period last year.
- Operating income for the first quarter of 2002 totaled $12,760,000 as compared with operating income of $11,265,000 for the same period last year, a 13% increase. Operating income for the first quarter of 2002 contained some unusual items, listed in the schedule below, the net effect of which had an unfavorable impact of $605,000. Excluding these items results in normalized operating income for the first quarter of 2002 of $13,365,000, an increase of 19% over last year's comparable period.
Financial performance for the first quarter of 2002 as compared to the same period last year benefited from acquisitions that were completed primarily in the fourth quarter of last year. Sales adjusted to exclude those acquisitions were $81,602,000 in the first quarter of 2002, which represented a 2% increase from the same period last year of $79,917,000. Operating income adjusted on the same basis was $11,775,000 compared to $11,313,000 for the first quarter of 2001, an increase of 4.1%.
Net earnings of $9,316,000 or $0.90 per diluted share, is essentially consistent with the net earnings for the first quarter of 2001 of $9,219,000 or $0.90 per diluted share. In addition to the unusual items included in operating income referred to above there was a gain of $104,000 associated with the sale of vacant land included in non-operating income. The net effect of these unusual items reduced pre-tax earnings by $501,000 and after tax income by $308,000. Exclusion of these items from the first quarter of 2002 would have resulted in net earnings of $9,624,000 or $0.93 per diluted share. This would be an increase of 4% over net earnings of the first quarter last year, which contained no unusual items.
Presented in the schedule below, is the normalized operating income for the first quarter of 2002. The schedule reflects an improvement in after-tax profitability of $1,302,000 or $0.13 per diluted share. This was somewhat reduced by lower non-operating income for investment income because of lower cash balances and lower rental income due to the sale of our Wood-Ridge facility.
Normalized Operating Income
First Quarter
Reported Operating Income - 2002 $12,760,000
Unusual Items:
Relocation of Metal Treatment Facility Expense 451,000
Loss on Securities from Demutualization
of Insurance Company 154,000
Normalized Operating Income - 2002 13,365,000
Operating Income - 2001 11,265,000
Increased Operating Earnings Pre-Tax 2,100,000
Increased Operating Earnings After-Tax $1,302,000
Diluted Operating Earnings per Share Improvement $0.13
Martin Benante, Chairman and CEO of Curtiss-Wright, stated, "We are pleased to report higher sales and operating income for the first quarter of 2002 over the same period last year. In addition to the benefit provided by acquisitions, our base businesses overall have generated sales growth and improved profitability. We have improved the quality of our earnings as we have redeployed assets from cash items and non-operating real estate.
"Lower margins in our Metal Treatment business segment due to lower volume were more than offset by improvements in our other business segments that were largely attributable to on-going cost reduction programs. We have implemented changes to our aerospace overhaul and repair operations in accordance with the reduced activity levels resulting from lower demand from commercial airlines. While we have not achieved the margins we saw in the first quarter of 2001, we have improved them substantially from the fourth quarter of last year."
Mr. Benante added, "We made a total of seven acquisitions during 2001. The integration of these additions is proceeding as planned. Sales related to acquisitions contributed $16,185,000 to revenues during the first quarter or 17% of our total revenue. Operating income related to these revenues were $985,000 which was about as expected. Operating margins should improve as the operations are fully integrated during the remainder of the year. Generally, businesses that we buy have lower operating margins than our traditional operations. We have demonstrated in the past our ability to improve the profitability of the companies we have added and expect to do so with our recent additions. We feel that these strategic additions have improved our position in the markets we serve and will be important contributors to the future growth of the company."
Mr. Benante concluded, "We have seen some of the benefits of the Company's market diversification strategy in the first quarter. Improved volume in our aerospace OEM military products, and flow control products for naval and commercial power generation applications slightly more than offset declines for our aerospace component overhaul and repair, commercial aerospace OEM products and services and Metal Treatment related services."
PROVIDED BELOW ARE THE FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2002 AND 2001:
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
(In thousands except per share data)
Three Months Ended
March 31, Change
2002 2001 $ %
Net sales $97,787 $79,917 $17,870 22.36%
Cost of sales 61,632 49,906 11,726 23.50%
Gross profit 36,155 30,011 6,144 20.47%
Research & development expenses 1,311 897 414 46.15%
Selling expenses 5,742 4,593 1,149 25.02%
General and administrative
expenses 16,140 13,338 2,802 21.01%
Environmental expense
(recoveries), net 202 (82) 284 -346.34%
Operating income 12,760 11,265 1,495 13.27%
Investment income, net 285 843 (558) -66.19%
Rental income, net 49 1,034 (985) -95.26%
Pension income, net 2,254 2,344 (90) -3.84%
Other income (expenses), net (108) (458) 350 -76.42%
Interest expense (193) (249) 56 -22.49%
Earnings before income taxes 15,047 14,779 268 1.81%
Provision for income taxes 5,731 5,560 171 3.08%
Net earnings $9,316 $9,219 $97 1.05%
Basic earnings per common share $0.92 $0.92
Diluted earnings per common share $0.90 $0.90
Dividends per common share $0.15 $0.13
Weighted average shares outstanding:
Basic 10,123 10,039
Diluted 10,340 10,212
Note: Prior year numbers were reclassified to conform to current year
presentation.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31, Change
2002 2001 $ %
Assets
Current Assets:
Cash and cash
equivalents $30,115 $25,495 $4,620 18.1%
Short-term investments 19,260 41,658 (22,398) -53.8%
Receivables, net 87,842 86,354 1,488 1.7%
Inventories, net 57,042 57,115 (73) -0.1%
Deferred income taxes 9,961 9,565 396 4.1%
Other current assets 6,018 5,770 248 4.3%
Total current assets 210,238 225,957 (15,719) -7.0%
Property, plant and
equipment, at cost 233,282 226,435 6,847 3.0%
Accumulated depreciation 124,011 121,914 2,097 1.7%
Property, plant and
equipment, net 109,271 104,521 4,750 4.5%
Prepaid pension costs 73,043 70,796 2,247 3.2%
Goodwill and other
intangible assets, net 93,292 90,914 2,378 2.6%
Other assets 8,567 8,240 327 4.0%
Total Assets $494,411 $500,428 $(6,017) -1.2%
Liabilities
Current Liabilities:
Accounts payable $20,985 $19,362 $1,623 8.4%
Accrued expenses 21,636 23,163 (1,527) -6.6%
Income taxes payable 7,002 17,704 (10,702) -60.4%
Other current liabilities 11,258 15,867 (4,609) -29.0%
Total current
liabilities 60,881 76,096 (15,215) -20.0%
Long-term debt 20,183 21,361 (1,178) -5.5%
Deferred income taxes 26,484 26,043 441 1.7%
Other liabilities 28,124 26,974 1,150 4.3%
Total Liabilities 135,672 150,474 (14,802) -9.8%
Stockholders' Equity
Common stock, $1 par value 10,618 10,618 - n/a
Class B common stock,
$1 par value 4,382 4,382 - n/a
Capital surplus 51,098 52,532 (1,434) -2.7%
Retained earnings 477,108 469,303 7,805 1.7%
Unearned portion of
restricted stock (73) (78) 5 -6.4%
Accumulated other
comprehensive income (8,143) (6,831) (1,312) 19.2%
534,990 529,926 5,064 1.0%
Less: cost of
treasury stock 176,251 179,972 (3,721) -2.1%
Total Stockholders'
Equity 358,739 349,954 8,785 2.5%
Total Liabilities and
Stockholders' Equity $494,411 $500,428 $(6,017) -1.2%
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SEGMENT INFORMATION
(UNAUDITED)
(In thousands)
Three Months Ended
March 31,
Change
2002 2001 $ %
Sales:
Motion Control $42,252 $29,957 $12,295 41.0%
Metal Treatment 25,417 27,872 (2,455) -8.8%
Flow Control 30,118 22,088 8,030 36.4%
Total Segments $97,787 $79,917 $17,870 22.4%
Operating Income:
Motion Control $7,232 $4,583 $2,649 57.8%
Metal Treatment 2,770 5,463 (2,693) -49.3%
Flow Control 3,722 1,219 2,503 205.3%
Total Segments 13,724 11,265 2,459 21.8%
Corporate & Other (964) - (964) n/a
Total Operating Income $12,760 $11,265 $1,495 13.3%
Operating Margins:
Motion Control 17.1% 15.3% 1.8%
Metal Treatment 10.9% 19.6% -8.7%
Flow Control 12.4% 5.5% 6.8%
Total Curtiss-Wright 13.0% 14.1% -1.0%
MOTION CONTROL
Sales in the first quarter of 2002 showed an increase of $12,295,000 or 41% from 2001. Acquisitions contributed $9,321,000 to the improvement in sales with the traditional business improving $2,974,000, which is an increase of 10% from the first quarter of 2001. The increase in the traditional business was due to increased defense sales of both aerospace and armored vehicle products.
Operating margins for the first quarter benefited from stronger profits from aerospace OEM components and cost improvements related to the consolidation of our manufacturing operations. Margins continued to improve for our Swiss-based business providing aiming and stabilizing systems for land-based military vehicles. While cost reductions improved the profitability on overhaul and repair services from the fourth quarter of 2001, profits were below those experienced in the first quarter of 2001 because of the reduced level of demand for these services from the airlines.
METAL TREATMENT
The first quarter's decline in sales from the same period last year of 9% was the result of general weakness in a number of served markets that include the commercial aerospace and automotive industries. These two markets represent about 60% of the business activity for Metal Treatment. Sales weakness was experienced in both the North American and European markets.
Operating earnings for the first quarter declined due to reduced volume, start-up costs for three new facilities, and the adverse effect of foreign currency translations. There were also non-recurring costs associated with the relocation of one of the segment's shot-peening facilities.
FLOW CONTROL
Sales increased $8,030,000 or 36%, in the first quarter of 2002 from the same period last year. Acquisitions represented $5,616,000 of this increase, while the traditional business increased $2,414,000 or 11% over the same period last year. Sales benefited from higher shipments of products used for nuclear applications for the Navy and power generation plants. These increases were partially offset by lower deliveries to the oil and gas and processing industries and products associated with the automotive and heavy truck markets.
Acquisitions generated increased operating profits of $511,000 for the period while the traditional business saw an improvement of $1,992,000 or a 157% increase over the first quarter of 2001. The increase was driven by improved operating profits on flow control products for nuclear applications.
Curtiss-Wright Corporation is a diversified provider of highly engineered products and services to the Motion Control, Flow Control and Metal Treatment industries. The firm employs approximately 2,600 people. More information on Curtiss-Wright can be found on the Internet at curtisswright2014.q4web.com
Forward-looking statements in this release related to expectations of continued high revenues related to new commercial aircraft and continued sales and income growth, and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 need for additional machinery and equipment and/or in the cost for the expansion of the Corporation's operations; changes in the competitive marketplace and/or customer requirements; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense, marine, and industrial companies. Please refer to the Company's SEC filings under the Securities and Exchange Act of 1934, as amended, for further information.
SOURCE Curtiss-Wright Corporation
CONTACT:
Gary Benschip of Curtiss-Wright Corporation,
+1-201-896-8520,
or [email protected]
URL: [email protected]