CHARLOTTE, N.C.--(BUSINESS WIRE)--
Curtiss-Wright Corporation (NYSE: CW) reported financial results for the
second quarter and six months ended June 30, 2016.
Second Quarter 2016 Highlights
-
Earnings per diluted share of $0.88, exceeding expectations;
-
Free cash flow increased 49% to $79 million, resulting in free cash
flow conversion of 199%, as defined in table below;
-
Net sales of $533 million;
-
Operating income of $68 million;
-
Operating margin of 12.8%, up 80 basis points;
-
Backlog of $2.0 billion increased 6% from December 31, 2015; and
-
Share repurchase of approximately $25 million.
Business Outlook
-
Increasing full-year 2016 operating margin guidance by 20 basis points
to new range of 14.2% to 14.4%, despite lowering sales guidance;
-
Increasing free cash flow guidance by $10 million to new range of $300
million to $320 million; and
-
Maintaining full-year 2016 expectations for diluted earnings per share
(EPS) of $4.00 to $4.15.
“Our second quarter results were ahead of our expectations, as we
continue to focus on ongoing margin improvement initiatives and generate
significant value for our shareholders despite challenging market
conditions,” said David C. Adams, Chairman and CEO of Curtiss-Wright
Corporation. “Our performance was led by the Power segment, where we
produced strong profitability aided by higher AP1000 program revenues,
as we continue to support new nuclear power plant construction in the
U.S. and China.”
“Looking to the balance of 2016, we continue to anticipate steady,
sequential margin improvement as we advance our drive to top-quartile
financial performance. We are maintaining our full-year diluted EPS
guidance of $4.00 to $4.15, despite having modified our sales outlook
based on slowing conditions affecting several of our businesses,
particularly those with exposure to the energy markets. In addition, as
a result of our on-going cost control actions aimed at mitigating the
challenging end market conditions, we are increasing our full-year
operating margin guidance by another 20 basis points to a new range of
14.2% to 14.4%, a 90 to 110 basis point improvement compared to pro
forma 2015 results. In addition, as a result of strong first half free
cash flow and efficient working capital management, we are raising our
full-year guidance by $10 million to a new range of $300 to $320
million.”
“We remain committed to increasing shareholder value by improving
profitability, generating strong free cash flow and maintaining a
balanced capital allocation strategy. Thus far in 2016, we have returned
more than $50 million to our shareholders through consistent share
repurchases and dividend distributions. We continue to actively
repurchase shares under our buyback program and expect to repurchase at
least $100 million this year.”
Second Quarter 2016 Operating Results from
Continuing Operations
(In thousands)
|
|
2Q-2016
|
|
|
2Q-2015
|
|
|
% Change
|
Sales
|
|
$ 532,766
|
|
|
$ 545,194
|
|
|
(2%)
|
Operating income
|
|
68,089
|
|
|
65,442
|
|
|
4%
|
Operating margin
|
|
12.8%
|
|
|
12.0%
|
|
|
80 bps
|
Sales
Sales of $533 million in the second quarter decreased $12 million, or
2%, compared to the prior year, primarily reflecting a $10 million
decrease in organic sales as well as $2 million, or less than 1%, in
unfavorable foreign currency translation. Second quarter 2016 sales
primarily reflect continued lower demand in the energy sector within the
Commercial/Industrial segment, as well as lower international ground
defense sales in the Defense 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
1%, while sales to the commercial markets decreased 4%, 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 second quarter was $68 million, an increase of
$3 million, or 4%, compared to the prior year. In the Power segment, our
results reflect a solid improvement in operating income resulting from
higher AP1000 program revenues and prior year AP1000 testing and design
costs that did not recur in 2016. This improvement was partially offset
by lower international ground defense sales in the Defense segment, as
well as lower operating income in the Commercial/Industrial segment
resulting from lower sales volumes.
Operating margin was 12.8%, an increase of 80 basis points over the
prior year, primarily reflecting higher overall segment operating
income, led by the strong performance in the Power segment, as well as
the benefits of our ongoing margin improvement initiatives, despite
lower sales.
Non-segment Expense
Non-segment expenses were essentially flat compared with the prior year,
as lower pension expenses were offset by higher corporate expenses.
Net Earnings
Second quarter net earnings were essentially flat compared to the prior
year, as higher operating income was partially offset by higher interest
expense, which increased by $1 million compared to the prior year. In
addition, the effective tax rate for the current quarter was 31.0%, an
increase from 28.9% in the prior year, principally driven by increased
foreign research and development tax benefits and favorable adjustments
to certain valuation allowances in the prior year that did not recur.
Free Cash Flow
(In thousands)
|
|
|
2Q-2016
|
|
|
2Q-2015
|
Net cash generated from operating activities
|
|
|
$
|
86,371
|
|
|
|
$
|
59,821
|
|
Capital expenditures
|
|
|
|
(6,908
|
)
|
|
|
|
(6,593
|
)
|
Free cash flow
|
|
|
$
|
79,463
|
|
|
|
$
|
53,228
|
|
Free cash flow, defined as cash flow from operations less capital
expenditures, was $79 million for the second quarter of 2016, an
increase of $26 million compared to $53 million in the prior year. Net
cash generated from operating activities increased $27 million to $86
million, primarily driven by higher advanced payments related to the new
China AP1000 order. Capital expenditures of $7 million were essentially
flat with the prior year.
New Orders and Backlog
New orders of $524 million in the second quarter were essentially flat
compared to the prior year, primarily due to lower orders within the
Defense segment where a significant international ground defense
contract was received in the prior year, partially offset by higher
orders within the Commercial/Industrial and Power segments. Backlog of
$2.0 billion increased 6% from December 31, 2015, led by growth in our
naval defense businesses.
Other Items – Share Repurchase
During the second quarter, the Company repurchased 315,500 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
|
$2.17 - $2.22 billion
|
|
|
$2.12 - $2.17 billion
|
|
|
Down 1 - 3%
|
Operating income
|
$304 - $315 million
|
|
|
$301 - $313 million
|
|
|
Up 4 - 8%
|
Operating margin
|
14.0% - 14.2%
|
|
|
14.2% - 14.4%
|
|
|
Up 90 - 110 bps
|
Interest expense
|
$38 - $39 million
|
|
|
$40 - $41 million
|
|
|
|
Diluted earnings per share
|
$4.00 - $4.15
|
|
|
No change
|
|
|
Up 7 - 11%
|
Diluted shares outstanding
|
46.0 million
|
|
|
45.2 million
|
|
|
|
Free cash flow
|
$290 - $310 million
|
|
|
$300 - $320 million
|
|
|
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 attached accompanying schedules.
Second Quarter 2016 Segment Performance
Commercial/Industrial
(In thousands)
|
|
2Q-2016
|
|
|
2Q-2015
|
|
|
% Change
|
Sales
|
|
$ 290,046
|
|
|
$ 304,465
|
|
|
(5%)
|
Operating income
|
|
38,957
|
|
|
45,253
|
|
|
(14%)
|
Operating margin
|
|
13.4%
|
|
|
14.9%
|
|
|
(150 bps)
|
Sales for the second quarter were $290 million, a decrease of $14
million, or 5%, over the prior year. Organic sales decreased 4% over the
prior year, excluding $2 million in unfavorable foreign currency
translation. In the general industrial market, our results primarily
reflect the expected reduction in sales of severe-service valves serving
the oil and gas markets, as well as lower sales for industrial vehicle
products. Within the commercial aerospace market, higher sales to Boeing
for actuation systems and sensors and controls products were partially
offset by lower sales of surface technology services to Airbus.
Operating income in the second quarter was $39 million, down 14% from
the prior year, while operating margin decreased 150 basis points to
13.4%. These results primarily reflect decreased profitability for
industrial valves due to lower sales volumes, more than offsetting the
benefit of higher sales of sensors and controls products. We also
achieved higher operating margin for industrial vehicle products and
surface treatment services, despite lower sales volumes, due to ongoing
margin improvement initiatives. In addition, favorable foreign currency
translation added $1 million to current quarter results.
Defense
(In thousands)
|
|
2Q-2016
|
|
|
2Q-2015
|
|
|
% Change
|
Sales
|
|
$ 113,961
|
|
|
$ 119,651
|
|
|
(5%)
|
Operating income
|
|
18,609
|
|
|
24,391
|
|
|
(24%)
|
Operating margin
|
|
16.3%
|
|
|
20.4%
|
|
|
(410 bps)
|
Sales for the second quarter were $114 million, a decrease of $6
million, or 5%, from the prior year. Organic sales decreased 4% from the
prior year, excluding $1 million in unfavorable foreign currency
translation. In the aerospace defense market, we experienced higher
sales of embedded computing products on various fighter jet, helicopter
and UAV programs, including the Global Hawk, Apache and P-8 programs,
which were principally offset by lower foreign military sales. In the
ground defense market, second quarter 2016 results primarily reflect
lower turret drive stabilization systems sales. We also experienced
lower revenues related to avionics and electronics equipment within the
commercial aerospace market.
Operating income in the second quarter was $19 million, a decrease of $6
million, or 24%, compared to the prior year, while operating margin
declined 410 basis points to 16.3%. The decrease was primarily driven by
the transition from a development to a production contract for our
turret drive stabilization systems, which provided a net one-time
benefit of $4 million in the prior year. These results also reflect
lower sales volumes in our commercial avionics and electronics business.
Favorable foreign currency translation added $2 million to current
quarter results.
Power
(In thousands)
|
|
2Q-2016
|
|
|
2Q-2015
|
|
|
% Change
|
Sales
|
|
$ 128,759
|
|
|
$ 121,078
|
|
|
6%
|
Operating income
|
|
16,114
|
|
|
1,454
|
|
|
1,008%
|
Operating margin
|
|
12.5%
|
|
|
1.2%
|
|
|
1,130 bps
|
Sales for the second quarter were $129 million, an increase of $8
million, or 6%, over the prior year. Within the power generation market,
our results reflect higher production revenues from the U.S. and China
AP1000 programs, which were partially offset by lower aftermarket sales
primarily supporting domestic nuclear operating reactors. In the naval
defense market, we experienced higher development sales of pumps and
generators supporting the ramp-up on the new Ohio-class replacement
submarine program, partially offset by lower sales of pumps and valves
on the CVN-79 aircraft carrier program as production is nearing
completion.
Operating income in the second quarter was $16 million, an increase of
$15 million, or 1,008%, compared to the prior year, while operating
margin increased 1,130 basis points to 12.5%. These results reflect
higher AP1000 production revenues in the current year and approximately
$11 million in AP1000 testing and design costs incurred in the prior
year to complete engineering and endurance testing that did not recur.
These improvements were partially offset by reduced profitability in our
aftermarket power generation business due to lower sales volumes.
Conference Call Information
The Company will host a conference call to discuss second quarter 2016
financial results at 9:00 a.m. EDT on Thursday, July 28, 2016. A live
webcast of the call and the accompanying financial presentation will be
made available on the internet by visiting the Investor Relations
section of the Company’s website at www.curtisswright.com.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
|
($'s in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30,
|
|
Change
|
|
|
June 30,
|
|
Change
|
|
|
2016
|
|
2015
|
|
$
|
|
%
|
|
|
2016
|
|
2015
|
|
$
|
|
%
|
Product sales
|
|
$
|
427,324
|
|
|
$
|
439,871
|
|
|
$
|
(12,547
|
)
|
|
(3
|
%)
|
|
|
$
|
830,242
|
|
|
$
|
885,558
|
|
|
$
|
(55,316
|
)
|
|
(6
|
%)
|
Service sales
|
|
|
105,442
|
|
|
|
105,323
|
|
|
|
119
|
|
|
0
|
%
|
|
|
|
206,031
|
|
|
|
205,835
|
|
|
|
196
|
|
|
0
|
%
|
Total net sales
|
|
|
532,766
|
|
|
|
545,194
|
|
|
|
(12,428
|
)
|
|
(2
|
%)
|
|
|
|
1,036,273
|
|
|
|
1,091,393
|
|
|
|
(55,120
|
)
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
|
279,869
|
|
|
|
287,685
|
|
|
|
(7,816
|
)
|
|
(3
|
%)
|
|
|
|
544,604
|
|
|
|
580,694
|
|
|
|
(36,090
|
)
|
|
(6
|
%)
|
Cost of service sales
|
|
|
67,518
|
|
|
|
75,158
|
|
|
|
(7,640
|
)
|
|
(10
|
%)
|
|
|
|
134,387
|
|
|
|
137,252
|
|
|
|
(2,865
|
)
|
|
(2
|
%)
|
Total cost of sales
|
|
|
347,387
|
|
|
|
362,843
|
|
|
|
(15,456
|
)
|
|
(4
|
%)
|
|
|
|
678,991
|
|
|
|
717,946
|
|
|
|
(38,955
|
)
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
185,379
|
|
|
|
182,351
|
|
|
|
3,028
|
|
|
2
|
%
|
|
|
|
357,282
|
|
|
|
373,447
|
|
|
|
(16,165
|
)
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
15,236
|
|
|
|
15,321
|
|
|
|
(85
|
)
|
|
(1
|
%)
|
|
|
|
30,396
|
|
|
|
30,583
|
|
|
|
(187
|
)
|
|
(1
|
%)
|
Selling expenses
|
|
|
29,126
|
|
|
|
29,105
|
|
|
|
21
|
|
|
0
|
%
|
|
|
|
58,752
|
|
|
|
60,193
|
|
|
|
(1,441
|
)
|
|
(2
|
%)
|
General and administrative expenses
|
|
|
72,928
|
|
|
|
72,483
|
|
|
|
445
|
|
|
1
|
%
|
|
|
|
142,782
|
|
|
|
144,394
|
|
|
|
(1,612
|
)
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
68,089
|
|
|
|
65,442
|
|
|
|
2,647
|
|
|
4
|
%
|
|
|
|
125,352
|
|
|
|
138,277
|
|
|
|
(12,925
|
)
|
|
(9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
(10,273
|
)
|
|
|
(8,985
|
)
|
|
|
(1,288
|
)
|
|
14
|
%
|
|
|
|
(20,206
|
)
|
|
|
(17,981
|
)
|
|
|
(2,225
|
)
|
|
12
|
%
|
Other income, net
|
|
|
101
|
|
|
|
(37
|
)
|
|
|
138
|
|
|
NM
|
|
|
|
335
|
|
|
|
444
|
|
|
|
(109
|
)
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
57,917
|
|
|
|
56,420
|
|
|
|
1,497
|
|
|
3
|
%
|
|
|
|
105,481
|
|
|
|
120,740
|
|
|
|
(15,259
|
)
|
|
(13
|
%)
|
Provision for income taxes
|
|
|
(17,954
|
)
|
|
|
(16,299
|
)
|
|
|
(1,655
|
)
|
|
10
|
%
|
|
|
|
(32,699
|
)
|
|
|
(37,396
|
)
|
|
|
4,697
|
|
|
(13
|
%)
|
Earnings from continuing operations
|
|
$
|
39,963
|
|
|
$
|
40,121
|
|
|
$
|
(158
|
)
|
|
(0
|
%)
|
|
|
$
|
72,782
|
|
|
$
|
83,344
|
|
|
$
|
(10,562
|
)
|
|
(13
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
|
-
|
|
|
|
(14,384
|
)
|
|
|
14,384
|
|
|
NM
|
|
|
|
-
|
|
|
|
(41,616
|
)
|
|
|
41,616
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
39,963
|
|
|
$
|
25,737
|
|
|
$
|
14,226
|
|
|
55
|
%
|
|
|
$
|
72,782
|
|
|
$
|
41,728
|
|
|
$
|
31,054
|
|
|
74
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.90
|
|
|
$
|
0.85
|
|
|
|
|
|
|
|
$
|
1.63
|
|
|
$
|
1.76
|
|
|
|
|
|
Earnings from discontinued operations
|
|
|
-
|
|
|
|
(0.31
|
)
|
|
|
|
|
|
|
|
-
|
|
|
|
(0.88
|
)
|
|
|
|
|
Total
|
|
$
|
0.90
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
$
|
1.63
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
0.88
|
|
|
$
|
0.83
|
|
|
|
|
|
|
|
$
|
1.61
|
|
|
$
|
1.72
|
|
|
|
|
|
Earnings from discontinued operations
|
|
|
-
|
|
|
|
(0.30
|
)
|
|
|
|
|
|
|
|
-
|
|
|
|
(0.86
|
)
|
|
|
|
|
Total
|
|
$
|
0.88
|
|
|
$
|
0.53
|
|
|
|
|
|
|
|
$
|
1.61
|
|
|
$
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
|
|
|
|
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
44,487
|
|
|
|
47,224
|
|
|
|
|
|
|
|
|
44,526
|
|
|
|
47,466
|
|
|
|
|
|
Diluted
|
|
|
45,164
|
|
|
|
48,258
|
|
|
|
|
|
|
|
|
45,195
|
|
|
|
48,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM- not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
($'s in thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
Change
|
|
|
|
2016
|
|
2015
|
|
%
|
Assets
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
383,151
|
|
|
$
|
288,697
|
|
|
33
|
%
|
|
Receivables, net
|
|
|
477,018
|
|
|
|
566,289
|
|
|
(16
|
%)
|
|
Inventories
|
|
|
397,562
|
|
|
|
379,591
|
|
|
5
|
%
|
|
Other current assets
|
|
|
52,561
|
|
|
|
40,306
|
|
|
30
|
%
|
|
Total current assets
|
|
|
1,310,292
|
|
|
|
1,274,883
|
|
|
3
|
%
|
Property, plant, and equipment, net
|
|
|
393,909
|
|
|
|
413,644
|
|
|
(5
|
%)
|
Goodwill
|
|
|
967,850
|
|
|
|
972,606
|
|
|
(0
|
%)
|
Other intangible assets, net
|
|
|
292,498
|
|
|
|
310,763
|
|
|
(6
|
%)
|
Other assets
|
|
|
14,631
|
|
|
|
17,715
|
|
|
(17
|
%)
|
|
Total assets
|
|
$
|
2,979,180
|
|
|
$
|
2,989,611
|
|
|
(0
|
%)
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Current portion of long-term and short term debt
|
|
$
|
1,113
|
|
|
$
|
1,259
|
|
|
(12
|
%)
|
|
Accounts payable
|
|
|
133,483
|
|
|
|
163,286
|
|
|
(18
|
%)
|
|
Accrued expenses
|
|
|
108,796
|
|
|
|
131,863
|
|
|
(17
|
%)
|
|
Income taxes payable
|
|
|
6,601
|
|
|
|
7,956
|
|
|
(17
|
%)
|
|
Deferred revenue
|
|
|
190,825
|
|
|
|
181,671
|
|
|
5
|
%
|
|
Other current liabilities
|
|
|
41,500
|
|
|
|
37,190
|
|
|
12
|
%
|
|
Total current liabilities
|
|
|
482,318
|
|
|
|
523,225
|
|
|
(8
|
%)
|
Long-term debt, net
|
|
|
966,451
|
|
|
|
951,946
|
|
|
2
|
%
|
Deferred tax liabilities, net
|
|
|
58,870
|
|
|
|
54,447
|
|
|
8
|
%
|
Accrued pension and other postretirement benefit costs
|
|
|
101,720
|
|
|
|
103,723
|
|
|
(2
|
%)
|
Long-term portion of environmental reserves
|
|
|
14,512
|
|
|
|
14,017
|
|
|
4
|
%
|
Other liabilities
|
|
|
81,038
|
|
|
|
86,830
|
|
|
(7
|
%)
|
|
Total liabilities
|
|
|
1,704,909
|
|
|
|
1,734,188
|
|
|
(2
|
%)
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
Common stock, $1 par value
|
|
|
49,187
|
|
|
|
49,190
|
|
|
(0
|
%)
|
Additional paid in capital
|
|
|
132,374
|
|
|
|
144,923
|
|
|
(9
|
%)
|
Retained earnings
|
|
|
1,651,851
|
|
|
|
1,590,645
|
|
|
4
|
%
|
Accumulated other comprehensive loss
|
|
|
(237,337
|
)
|
|
|
(225,928
|
)
|
|
5
|
%
|
Less: cost of treasury stock
|
|
|
(321,804
|
)
|
|
|
(303,407
|
)
|
|
6
|
%
|
|
Total stockholders' equity
|
|
|
1,274,271
|
|
|
|
1,255,423
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
2,979,180
|
|
|
$
|
2,989,611
|
|
|
(0
|
%)
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
SEGMENT INFORMATION (UNAUDITED)
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
Change
|
|
|
|
2016
|
|
2015
|
|
%
|
|
|
2016
|
|
2015
|
|
%
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
290,046
|
|
|
$
|
304,465
|
|
|
(5
|
%)
|
|
|
$
|
564,773
|
|
|
$
|
602,352
|
|
|
(6
|
%)
|
Defense
|
|
|
|
113,961
|
|
|
|
119,651
|
|
|
(5
|
%)
|
|
|
|
219,352
|
|
|
|
233,151
|
|
|
(6
|
%)
|
Power
|
|
|
|
128,759
|
|
|
|
121,078
|
|
|
6
|
%
|
|
|
|
252,148
|
|
|
|
255,890
|
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales
|
|
|
$
|
532,766
|
|
|
$
|
545,194
|
|
|
(2
|
%)
|
|
|
$
|
1,036,273
|
|
|
$
|
1,091,393
|
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
38,957
|
|
|
$
|
45,253
|
|
|
(14
|
%)
|
|
|
$
|
69,009
|
|
|
$
|
88,542
|
|
|
(22
|
%)
|
Defense
|
|
|
|
18,609
|
|
|
|
24,391
|
|
|
(24
|
%)
|
|
|
|
35,454
|
|
|
|
42,418
|
|
|
(16
|
%)
|
Power
|
|
|
|
16,114
|
|
|
|
1,454
|
|
|
1008
|
%
|
|
|
|
30,742
|
|
|
|
20,966
|
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments
|
|
|
$
|
73,680
|
|
|
$
|
71,098
|
|
|
4
|
%
|
|
|
$
|
135,205
|
|
|
$
|
151,926
|
|
|
(11
|
%)
|
Corporate and other
|
|
|
|
(5,591
|
)
|
|
|
(5,656
|
)
|
|
1
|
%
|
|
|
|
(9,853
|
)
|
|
|
(13,649
|
)
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
|
$
|
68,089
|
|
|
$
|
65,442
|
|
|
4
|
%
|
|
|
$
|
125,352
|
|
|
$
|
138,277
|
|
|
(9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
|
13.4
|
%
|
|
|
14.9
|
%
|
|
|
|
|
|
12.2
|
%
|
|
|
14.7
|
%
|
|
|
Defense
|
|
|
|
16.3
|
%
|
|
|
20.4
|
%
|
|
|
|
|
|
16.2
|
%
|
|
|
18.2
|
%
|
|
|
Power
|
|
|
|
12.5
|
%
|
|
|
1.2
|
%
|
|
|
|
|
|
12.2
|
%
|
|
|
8.2
|
%
|
|
|
Total Curtiss-Wright
|
|
|
|
12.8
|
%
|
|
|
12.0
|
%
|
|
|
|
|
|
12.1
|
%
|
|
|
12.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment margins
|
|
|
|
13.8
|
%
|
|
|
13.0
|
%
|
|
|
|
|
|
13.0
|
%
|
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
|
|
SALES BY END MARKET (UNAUDITED)
|
|
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
Defense markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
$
|
76,167
|
|
$
|
75,766
|
|
1
|
%
|
|
$
|
137,715
|
|
$
|
147,107
|
|
(6
|
%)
|
Ground
|
|
|
19,886
|
|
|
24,233
|
|
(18
|
%)
|
|
|
39,062
|
|
|
42,893
|
|
(9
|
%)
|
Naval
|
|
|
104,509
|
|
|
100,117
|
|
4
|
%
|
|
|
197,460
|
|
|
189,884
|
|
4
|
%
|
Other
|
|
|
2,415
|
|
|
1,529
|
|
58
|
%
|
|
|
3,669
|
|
|
3,550
|
|
3
|
%
|
Total Defense
|
|
$
|
202,977
|
|
$
|
201,645
|
|
1
|
%
|
|
$
|
377,906
|
|
$
|
383,434
|
|
(1
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Aerospace
|
|
$
|
104,062
|
|
$
|
98,889
|
|
5
|
%
|
|
$
|
206,249
|
|
$
|
200,078
|
|
3
|
%
|
Power Generation
|
|
|
95,768
|
|
|
94,242
|
|
2
|
%
|
|
|
195,618
|
|
|
207,478
|
|
(6
|
%)
|
General Industrial
|
|
|
129,959
|
|
|
150,418
|
|
(14
|
%)
|
|
|
256,500
|
|
|
300,403
|
|
(15
|
%)
|
Total Commercial
|
|
$
|
329,789
|
|
$
|
343,549
|
|
(4
|
%)
|
|
$
|
658,367
|
|
$
|
707,959
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Curtiss-Wright
|
|
$
|
532,766
|
|
$
|
545,194
|
|
(2
|
%)
|
|
$
|
1,036,273
|
|
$
|
1,091,393
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information
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
|
|
June 30,
|
|
2016 vs 2015
|
|
Commercial/Industrial
|
|
|
Defense
|
|
|
Power
|
|
|
Total Curtiss-Wright
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
Organic
|
(4
|
%)
|
|
(16
|
%)
|
|
|
|
(4
|
%)
|
|
(30
|
%)
|
|
|
|
6
|
%
|
|
1011
|
%
|
|
|
|
(2
|
%)
|
|
0
|
%
|
Acquisitions
|
0
|
%
|
|
0
|
%
|
|
|
|
0
|
%
|
|
0
|
%
|
|
|
|
0
|
%
|
|
0
|
%
|
|
|
|
0
|
%
|
|
0
|
%
|
Foreign Currency
|
(1
|
%)
|
|
2
|
%
|
|
|
|
(1
|
%)
|
|
6
|
%
|
|
|
|
(0
|
%)
|
|
(3
|
%)
|
|
|
|
(0
|
%)
|
|
4
|
%
|
Total
|
(5
|
%)
|
|
(14
|
%)
|
|
|
|
(5
|
%)
|
|
(24
|
%)
|
|
|
|
6
|
%
|
|
1008
|
%
|
|
|
|
(2
|
%)
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
|
|
June 30,
|
|
2016 vs 2015
|
|
Commercial/Industrial
|
|
|
Defense
|
|
|
Power
|
|
|
Total Curtiss-Wright
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
|
|
Sales
|
|
Operating income
|
Organic
|
(6
|
%)
|
|
(24
|
%)
|
|
|
|
(5
|
%)
|
|
(25
|
%)
|
|
|
|
(1
|
%)
|
|
47
|
%
|
|
|
|
(5
|
%)
|
|
(13
|
%)
|
Acquisitions
|
1
|
%
|
|
1
|
%
|
|
|
|
0
|
%
|
|
0
|
%
|
|
|
|
0
|
%
|
|
0
|
%
|
|
|
|
1
|
%
|
|
0
|
%
|
Foreign Currency
|
(1
|
%)
|
|
1
|
%
|
|
|
|
(1
|
%)
|
|
9
|
%
|
|
|
|
(0
|
%)
|
|
0
|
%
|
|
|
|
(1
|
%)
|
|
4
|
%
|
Total
|
(6
|
%)
|
|
(22
|
%)
|
|
|
|
(6
|
%)
|
|
(16
|
%)
|
|
|
|
(1
|
%)
|
|
47
|
%
|
|
|
|
(5
|
%)
|
|
(9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
86,371
|
|
|
$
|
59,821
|
|
|
$
|
156,631
|
|
|
$
|
(111,270
|
)
|
Capital expenditures
|
|
|
|
(6,908
|
)
|
|
|
(6,593
|
)
|
|
|
(15,733
|
)
|
|
|
(15,689
|
)
|
Free cash flow
|
|
|
$
|
79,463
|
|
|
$
|
53,228
|
|
|
$
|
140,898
|
|
|
$
|
(126,959
|
)
|
|
|
|
|
|
|
|
|
|
|
Pension Payment
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
145,000
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow
|
|
|
$
|
79,463
|
|
|
$
|
53,228
|
|
|
$
|
140,898
|
|
|
$
|
18,041
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow Conversion
|
|
|
199
|
%
|
|
|
133
|
%
|
|
|
194
|
%
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION
|
2016 Guidance (from Continuing Operations)
|
As of July 27, 2016
|
($'s in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
Reported
|
|
2015 Pro
Forma*
|
|
2016 Guidance (Current)
|
|
|
|
Low
|
|
High
|
Sales:
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
$
|
1,185
|
|
|
$
|
1,185
|
|
|
|
$
|
1,130
|
|
|
$
|
1,155
|
|
Defense
|
|
477
|
|
|
|
477
|
|
|
|
|
475
|
|
|
|
485
|
|
Power
|
|
543
|
|
|
|
523
|
|
|
|
|
515
|
|
|
|
530
|
|
Total sales
|
$
|
2,206
|
|
|
$
|
2,186
|
|
|
|
$
|
2,120
|
|
|
$
|
2,170
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
$
|
172
|
|
|
$
|
172
|
|
|
|
$
|
165
|
|
|
$
|
170
|
|
Defense
|
|
99
|
|
|
|
99
|
|
|
|
|
92
|
|
|
|
96
|
|
Power
|
|
75
|
|
|
|
55
|
|
|
|
|
68
|
|
|
|
71
|
|
Total segments
|
|
345
|
|
|
|
325
|
|
|
|
|
325
|
|
|
|
337
|
|
Corporate and other
|
|
(35
|
)
|
|
|
(35
|
)
|
|
|
|
(24
|
)
|
|
|
(25
|
)
|
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
|
%
|
|
|
|
14.6
|
%
|
|
|
14.8
|
%
|
Defense
|
|
20.7
|
%
|
|
|
20.7
|
%
|
|
|
|
19.5
|
%
|
|
|
19.7
|
%
|
Power
|
|
13.8
|
%
|
|
|
10.5
|
%
|
|
|
|
13.2
|
%
|
|
|
13.4
|
%
|
Total operating margin
|
|
14.1
|
%
|
|
|
13.3
|
%
|
|
|
|
14.2
|
%
|
|
|
14.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 July 27, 2016
|
|
|
|
|
|
|
|
|
(Prior)
|
|
(Current)
|
|
|
2016 % Change vs 2015
|
|
2016 % Change vs 2015
|
|
|
|
|
|
|
Defense Markets
|
|
|
|
|
|
Aerospace
|
|
1 - 3%
|
|
|
Flat
|
Ground
|
|
4 - 6%
|
|
|
(2 - 4%)
|
Navy
|
|
0 - 2%
|
|
|
0 - 2%
|
Total Defense
(Including Other Defense)
|
|
2 - 4%
|
|
|
Flat
|
|
|
|
|
|
|
Commercial Markets
|
|
|
|
|
|
Commercial Aerospace
|
|
(2 - 4%)
|
|
|
Flat
|
Power Generation
|
|
4 - 6%
|
|
|
0 - 2%
|
General Industrial
|
|
(2 - 6%)
|
|
|
(5 - 9%)
|
Total Commercial
|
|
(1 - 3%)
|
|
|
(2 - 4%)
|
|
|
|
|
|
|
Total Curtiss-Wright Sales
|
|
Down 1% to Up 1%
|
|
|
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 (NYSE: 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160727006592/en/
Source: Curtiss-Wright Corporation