DAVIDSON, N.C.--(BUSINESS WIRE)--
Curtiss-Wright Corporation (NYSE: CW) reports financial results for the
fourth quarter and full-year ended December 31, 2018.
Fourth Quarter
2018 Highlights
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Reported diluted earnings per share (EPS) of $1.89, with Adjusted
diluted EPS of $1.90, up 25% compared with the prior year (defined
below);
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Free cash flow of $214 million, up 3%;
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Net sales of $649 million, up 6%, including 3% organic growth (defined
below);
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Reported and Adjusted operating income of $110 million, up 4% and 5%,
respectively;
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Reported and Adjusted operating margin of 17.0%, down 20 basis points;
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New orders of $608 million, up 7%; and
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Share repurchases of approximately $119 million, or 1.1 million shares.
Full-Year
2018 Highlights
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Reported diluted EPS of $6.22, with Adjusted diluted EPS of $6.37, up
28% compared with the prior year, reflecting increased profitability
in all three segments;
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Adjusted free cash flow of $333 million and Adjusted free cash flow
conversion of 121%;
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Net sales of $2.4 billion, up 6%, including 3% organic growth, driven
by higher sales in all end markets;
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Reported operating income of $374 million, with Adjusted operating
income of $382 million, up 14%;
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Reported operating margin of 15.5%, with Adjusted operating margin of
15.8%, up 110 basis points;
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Effective tax rate of 22.6%;
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New orders of $2.4 billion increased 6%, while Backlog of $2.0 billion
increased 1% from December 31, 2017; and
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Share repurchases of approximately $199 million, or 1.7 million shares.
Full-Year
2019 Business Outlook
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Expect solid growth in sales (up 3-5%), driven by increases in all end
markets;
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Anticipate higher operating income (up 4-6%), operating margin of
15.9% to 16.0% (up 10-20 basis points) and diluted earnings per share
of $6.80 to $6.95 (up 7-9%), compared with Adjusted full-year 2018;
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Commercial/Industrial segment - improved profitability due to higher
sales and benefits of our ongoing margin improvement initiatives,
partially offset by $4 million for tariffs and a $3 million increase
in R&D investments;
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Defense segment - reduced profitability, despite higher sales, due to
a $5 million increase in R&D investments;
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Power segment - reduced profitability, despite solid sales growth, due
to $6 million for transition and IT security costs related to the
relocation of our DRG business and a $2 million increase in R&D
investments;
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Absent these R&D investments, tariffs and DRG relocation costs, all
three segments are expected to produce solid year-over-year operating
margin expansion; and
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Expect Reported free cash flow to range from $300 to $310 million,
with Adjusted free cash flow to range from $320 to $330 million,
excluding a $20 million capital investment in the Power segment
related to construction of a new, state-of-the-art naval facility
principally for the DRG business.
“We delivered strong Adjusted diluted EPS of $1.90 in the fourth
quarter, driven by better than expected operational performance in the
Power segment,” said David C. Adams, Chairman and CEO of Curtiss-Wright
Corporation. “We reported a 6% increase in sales, led by a solid
contribution from the DRG acquisition, as well as strong organic growth
across all of our commercial markets. Further, we generated $214 million
in free cash flow, driving 259% free cash flow conversion in the quarter.
“Full-year 2018 Adjusted diluted EPS of $6.37 exceeded our expectations,
driven by a strong operational performance which included 6% top-line
growth with higher sales in all end markets, and strong profitability
that generated a 15.8% Adjusted operating margin, the highest level of
profitability achieved by Curtiss-Wright in recent history. Full-year
Adjusted free cash flow of $333 million was also strong, and enabled us
to return nearly $200 million to shareholders through share repurchase
activity this past year.
“For 2019, we are projecting another solid performance, as we expect
higher sales in all end markets and overall improved operating
profitability, despite a planned ramp up in research and development
costs and other strategic growth investments, to drive operating margin
to approximately 16.0%. These investments remain critical to supporting
our objectives for long-term profitable growth and maintaining
top-quartile financial performance for all of our key financial metrics,
in order to generate significant value for our shareholders.”
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Fourth Quarter 2018 Operating Results
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(In millions)
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4Q-2018
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4Q-2017
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Change
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Sales
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$
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648.6
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$
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611.9
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6%
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Reported operating income
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$
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110.0
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$
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105.3
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4%
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Adjustments (1) |
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0.4
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-
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Adjusted operating income
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$
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110.4
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$
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105.3
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5%
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Adjusted operating margin
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17.0
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%
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17.2
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%
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(20 bps)
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(1) Includes one-time Inventory Step-up, Backlog Amortization
and Transaction costs for current and prior year acquisitions.
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Sales of $649 million up $37 million, or 6%, compared with the prior
year (3% organic, 4% acquisitions, 1% unfavorable foreign currency
translation);
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From an end market perspective, total sales to the defense markets
increased 5%, as higher naval defense revenues associated with the DRG
acquisition more than offset reduced revenues in the aerospace defense
market, while total sales to the commercial markets increased 7%, led
by higher power generation revenues from the China Direct AP1000
program and nuclear aftermarket, compared with the prior year. Please
refer to the accompanying tables for a breakdown of sales by end
market;
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Reported operating income was $110 million, with Reported operating
margin of 17.0%;
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Adjusted operating income of $110 million, up $5 million, or 5%,
compared with the prior year, principally reflects higher power
generation revenues and the contribution from our DRG acquisition in
the Power segment, partially offset by reduced revenues and operating
income in the Defense segment;
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Adjusted operating margin of 17.0%, essentially flat compared with the
prior year, reflects higher revenues and favorable overhead absorption
in the Power segment, offset by reduced revenues and increased
research and development expenses in the Defense segment, and the
negative impact from tariffs (as expected and included in prior
guidance) and restructuring charges in the Commercial/Industrial
segment; and
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Non-segment expenses of $9 million were flat compared with the prior
year, as lower pension costs were offset by higher environmental costs.
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Net Earnings and Diluted EPS
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(In millions, except EPS)
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4Q-2018
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4Q-2017
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Change
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Reported net earnings
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$
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82.8
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$
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67.8
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22
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%
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Adjustments (1) |
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0.4
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-
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-
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Tax impact on Adjustments (1) |
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(0.1
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-
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-
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Adjusted net earnings
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$
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83.2
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$
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67.8
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23
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%
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Reported diluted EPS
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$
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1.89
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$
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1.52
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25
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%
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Adjustments (1) |
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$
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0.01
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-
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-
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Tax impact on Adjustments (1) |
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($0.00
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-
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-
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Adjusted diluted EPS
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$
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1.90
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$
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1.52
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25
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%
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(1) Includes one-time Inventory Step-up, Backlog Amortization
and Transaction costs for current and prior year acquisitions.
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Reported net earnings of $83 million and Reported diluted EPS of $1.89;
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Adjusted net earnings of $83 million, up $15 million, or 23%, compared
with the prior year, reflecting higher operating income, lower
interest expense and a lower tax rate;
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Adjusted diluted earnings per share of $1.90, up $0.38, or 25%,
compared with the prior year, reflecting higher operating income,
lower interest expense and a lower tax rate, as well as a lower share
count; and
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The effective tax rate (ETR) was 21.7%, a decrease from 31.8% in the
prior year quarter, primarily driven by the reduction of the U.S.
corporate income tax rate from 35% to 21% associated with the 2017 Tax
Cuts and Jobs Act (TCJA).
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Free Cash Flow
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(In millions)
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4Q-2018
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4Q-2017
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Change
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Net cash provided by operating activities
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$
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237.3
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$
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226.4
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5
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%
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Capital expenditures
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(23.1
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(17.8
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(30
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%)
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Free cash flow
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$
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214.2
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$
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208.6
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3
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%
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Free cash flow of $214 million, defined as cash flow from operations
less capital expenditures, increased $6 million compared with the
prior year, as higher cash earnings and lower taxes were largely
offset by the timing of collections; and
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Capital expenditures increased by $5 million to $23 million compared
with the prior year, due to higher capital investments within the
Power segment.
New Orders and Backlog
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During the fourth quarter, new orders of $608 million increased 7%
compared with the prior year, led by solid growth in aerospace and
naval defense orders, including the contribution from the DRG
acquisition;
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For full-year 2018, new orders of $2.4 billion increased 6% compared
with the prior year; and
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Backlog of $2.0 billion increased 1% from December 31, 2017.
Other Items – Share Repurchase
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During the fourth quarter, the Company repurchased 1.1 million shares
of its common stock for approximately $119 million, increasing
full-year 2018 repurchase activity to 1.7 million shares for
approximately $199 million.
Fourth Quarter 2018 Segment Performance
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Commercial/Industrial
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(In millions)
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4Q-2018
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4Q-2017
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Change
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Sales
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$
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304.8
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$
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298.3
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2
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%
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Reported operating income
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$
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46.9
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$
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47.3
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(1
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%)
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Reported operating margin
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15.4
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%
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15.8
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%
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(40 bps)
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Sales of $305 million, up $7 million, or 2%, compared with the prior
year (3% organic, 1% unfavorable foreign currency translation);
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Defense market sales were down slightly, as lower sales of sensors and
controls products on various fighter jet programs in the aerospace
defense market were partially offset by higher sales of valves on the
Virginia class submarine program in the naval defense market;
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Commercial aerospace market sales growth reflects higher OEM sales of
sensors and controls products and surface treatment services;
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General industrial market sales growth was principally driven by solid
demand for industrial valves;
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Reported operating income of $47 million, down less than $1 million,
or 1%, compared with the prior year ((2%) organic, 1% favorable
foreign currency translation), as the benefit from higher sales was
offset by the impact from tariffs and restructuring charges; and
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Reported operating margin decreased 40 basis points to 15.4%,
principally reflecting the aforementioned impact from tariffs and
restructuring, partially offset by higher sales and improved
profitability for sensors and controls products; Operating margin
would have increased 60 basis points excluding the impact from tariffs
and restructuring charges.
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Defense
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(In millions)
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4Q-2018
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4Q-2017
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Change
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Sales
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$
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150.9
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$
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172.5
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(13
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%)
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Reported operating income
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$
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36.5
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$
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43.5
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(16
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%)
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Reported operating margin
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24.2
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%
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25.2
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%
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(100 bps)
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Sales of $151 million, down $22 million, or 13%, compared with the
prior year ((12%) organic, 1% unfavorable foreign currency
translation);
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Aerospace defense market sales declines reflect reduced sales of
flight test equipment on fighter jet and bomber programs, as well as
lower sales of embedded computing equipment on unmanned aerial vehicle
(UAV) platforms;
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Naval defense market revenue declines principally reflect reduced
sales of embedded computing and aircraft handling equipment on various
naval defense platforms;
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Commercial aerospace market sales declines principally reflect reduced
sales of avionics and electronics equipment on various domestic and
international platforms; and
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Reported operating income of $36 million, down $7 million, or 16%,
compared with the prior year, while reported operating margin
decreased 100 basis points to 24.2%, driven by lower sales and higher
research and development expenses, as expected, to support future
organic growth initiatives, partially offset by favorable mix for our
embedded computing products.
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Power
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(In millions)
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4Q-2018
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4Q-2017
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Change
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Sales
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$
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192.9
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$
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141.0
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37%
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Reported operating income
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$
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36.1
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$
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23.9
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51%
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Adjustments (1) |
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0.4
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-
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Adjusted operating income
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$
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36.5
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$
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23.9
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52%
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Adjusted operating margin
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18.9
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%
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17.0
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%
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190 bps
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(1) Includes one-time Inventory Step-up, Backlog Amortization
and Transaction costs for current and prior year acquisitions.
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Sales of $193 million, up $52 million, or 37%, compared with the prior
year (21% organic, 16% acquisition);
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Strong naval defense market sales were driven by higher CVN-80
aircraft carrier revenues and solid DRG service center revenues;
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Strong power generation market sales reflect higher revenues on the
China Direct AP1000 program as well as solid growth in domestic
aftermarket sales supporting currently operating nuclear reactors;
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Reported operating income was $36 million, with Reported operating
margin of 18.7%; and
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Adjusted operating income of $36 million, up $13 million, or 52%,
compared with the prior year, while Adjusted operating margin
increased 190 basis points to 18.9%, reflecting higher naval defense
and power generation revenues, favorable overhead absorption and
increased profitability on the China Direct AP1000 program.
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Full-Year 2019 Guidance
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The Company is issuing full-year 2019 financial guidance as
follows:
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(In millions, except EPS)
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2018
Reported
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2018
Adjustments
(1)(2)
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2018
Adjusted
(1)(2)
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2019E Reported
Guidance
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2019
Adjustments
(3)
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2019E
Adjusted
Guidance
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Total Sales
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$2,412
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-
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$2,412
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$2,490 - $2,535
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-
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$2,490 - $2,535
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Operating Income
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$374
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$9
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$382
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$396 - $405
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-
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$396 - $405
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Operating Margin
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15.5%
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30 bps
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15.8%
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15.9% - 16.0%
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-
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15.9% - 16.0%
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Effective Tax Rate
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22.6%
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-
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22.6%
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23.0%
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-
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23.0%
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Diluted EPS
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$6.22
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$0.15
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$6.37
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$6.80 - $6.95
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-
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$6.80 - $6.95
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Diluted Shares Outstanding
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44.3
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-
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44.3
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43.4
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-
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43.4
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Free Cash Flow
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$283
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$50
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$333
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$300 - $310
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$20
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$320 - $330
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(1)
2018 Adjusted results for operating income,
operating margin and diluted EPS exclude the one-time Inventory
Step-up, Backlog Amortization and Transaction costs for current
and prior year acquisitions.
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(2)
2018 Adjusted results for free cash flow exclude a
$50 million voluntary pension contribution made in the first
quarter of 2018.
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(3)
2019 Adjusted results exclude a $20 million capital
investment in the Power segment related to the construction of a
new, state-of-the-art naval facility principally for DRG.
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Full-year 2019 guidance notes:
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Expect solid growth in sales (up 3-5%), driven by increases in all end
markets;
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Anticipate higher operating income (up 4-6%), operating margin of
15.9% to 16.0% (up 10-20 basis points) and diluted earnings per share
of $6.80 to $6.95 (up 7-9%), compared with Adjusted full-year 2018;
-
Commercial/Industrial segment - improved profitability due to higher
sales and benefits of our ongoing margin improvement initiatives,
partially offset by $4 million for tariffs and a $3 million increase
in R&D investments;
-
Defense segment - reduced profitability, despite higher sales, due to
a $5 million increase in R&D investments;
-
Power segment - reduced profitability, despite solid sales growth, due
to $6 million for transition and IT security costs related to the
relocation of our DRG business and a $2 million increase in R&D
investments;
-
Absent these R&D investments, tariffs and DRG relocation costs, all
three segments are expected to produce solid year-over-year operating
margin expansion;
-
Reflects lower share count driven by 2018 share repurchase activity;
and
-
A more detailed breakdown of the Company’s 2019 guidance by segment
and by market can be found in the accompanying schedules.
Conference Call & Webcast Information
The Company will host a conference call to discuss fourth quarter and
full-year 2018 financial results and expectations for 2019 guidance at
9:00 a.m. EST on Wednesday, February 27, 2019. A live webcast of the
call and the accompanying financial presentation, as well as a replay of
the call, will be made available on the internet by visiting the
Investor Relations section of the Company’s website at www.curtisswright.com.
(Tables to Follow)
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
|
($'s in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
Change
|
|
|
December 31,
|
|
|
Change
|
|
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
|
|
2018
|
|
|
2017
|
|
|
$
|
|
|
%
|
Product sales
|
|
|
$
|
541,689
|
|
|
|
$
|
503,140
|
|
|
|
$
|
38,549
|
|
|
|
8
|
%
|
|
|
$
|
1,993,249
|
|
|
|
$
|
1,854,216
|
|
|
|
$
|
139,033
|
|
|
|
7
|
%
|
Service sales
|
|
|
106,933
|
|
|
|
108,741
|
|
|
|
(1,808
|
)
|
|
|
(2
|
%)
|
|
|
418,586
|
|
|
|
416,810
|
|
|
|
1,776
|
|
|
|
0
|
%
|
Total net sales
|
|
|
648,622
|
|
|
|
611,881
|
|
|
|
36,741
|
|
|
|
6
|
%
|
|
|
2,411,835
|
|
|
|
2,271,026
|
|
|
|
140,809
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
|
336,402
|
|
|
|
311,570
|
|
|
|
24,832
|
|
|
|
8
|
%
|
|
|
1,272,599
|
|
|
|
1,198,881
|
|
|
|
73,718
|
|
|
|
6
|
%
|
Cost of service sales
|
|
|
71,168
|
|
|
|
68,967
|
|
|
|
2,201
|
|
|
|
3
|
%
|
|
|
267,975
|
|
|
|
271,360
|
|
|
|
(3,385
|
)
|
|
|
(1
|
%)
|
Total cost of sales
|
|
|
407,570
|
|
|
|
380,537
|
|
|
|
27,033
|
|
|
|
7
|
%
|
|
|
1,540,574
|
|
|
|
1,470,241
|
|
|
|
70,333
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
241,052
|
|
|
|
231,344
|
|
|
|
9,708
|
|
|
|
4
|
%
|
|
|
871,261
|
|
|
|
800,785
|
|
|
|
70,476
|
|
|
|
9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
|
19,291
|
|
|
|
15,188
|
|
|
|
4,103
|
|
|
|
27
|
%
|
|
|
64,525
|
|
|
|
61,393
|
|
|
|
3,132
|
|
|
|
5
|
%
|
Selling expenses
|
|
|
32,095
|
|
|
|
34,108
|
|
|
|
(2,013
|
)
|
|
|
(6
|
%)
|
|
|
126,641
|
|
|
|
121,873
|
|
|
|
4,768
|
|
|
|
4
|
%
|
General and administrative expenses
|
|
|
79,661
|
|
|
|
76,766
|
|
|
|
2,895
|
|
|
|
4
|
%
|
|
|
306,469
|
|
|
|
292,399
|
|
|
|
14,070
|
|
|
|
5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
110,005
|
|
|
|
105,282
|
|
|
|
4,723
|
|
|
|
4
|
%
|
|
|
373,626
|
|
|
|
325,120
|
|
|
|
48,506
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
8,264
|
|
|
|
9,887
|
|
|
|
(1,623
|
)
|
|
|
(16
|
%)
|
|
|
33,983
|
|
|
|
41,471
|
|
|
|
(7,488
|
)
|
|
|
(18
|
%)
|
Other income, net
|
|
|
4,099
|
|
|
|
3,937
|
|
|
|
162
|
|
|
|
4
|
%
|
|
|
16,596
|
|
|
|
15,970
|
|
|
|
626
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
|
105,840
|
|
|
|
99,332
|
|
|
|
6,508
|
|
|
|
7
|
%
|
|
|
356,239
|
|
|
|
299,619
|
|
|
|
56,620
|
|
|
|
19
|
%
|
Provision for income taxes
|
|
|
(23,005
|
)
|
|
|
(31,582
|
)
|
|
|
8,577
|
|
|
|
27
|
%
|
|
|
(80,490
|
)
|
|
|
(84,728
|
)
|
|
|
4,238
|
|
|
|
5
|
%
|
Net earnings
|
|
|
$
|
82,835
|
|
|
|
$
|
67,750
|
|
|
|
$
|
15,085
|
|
|
|
22
|
%
|
|
|
$
|
275,749
|
|
|
|
$
|
214,891
|
|
|
|
$
|
60,858
|
|
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
$
|
1.91
|
|
|
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
$
|
6.28
|
|
|
|
$
|
4.86
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
1.89
|
|
|
|
$
|
1.52
|
|
|
|
|
|
|
|
|
|
$
|
6.22
|
|
|
|
$
|
4.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
|
$
|
0.15
|
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
$
|
0.60
|
|
|
|
$
|
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
43,447
|
|
|
|
44,132
|
|
|
|
|
|
|
|
|
|
43,892
|
|
|
|
44,182
|
|
|
|
|
|
|
|
Diluted
|
|
|
43,782
|
|
|
|
44,692
|
|
|
|
|
|
|
|
|
|
44,316
|
|
|
|
44,761
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
($'s in thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
Change
|
|
|
|
|
2018
|
|
|
2017
|
|
|
%
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
276,066
|
|
|
|
$
|
475,120
|
|
|
|
(42
|
%)
|
|
Receivables, net
|
|
|
593,755
|
|
|
|
494,923
|
|
|
|
20
|
%
|
|
Inventories, net
|
|
|
423,426
|
|
|
|
378,866
|
|
|
|
12
|
%
|
|
Other current assets
|
|
|
50,719
|
|
|
|
52,951
|
|
|
|
(4
|
%)
|
|
Total current assets
|
|
|
1,343,966
|
|
|
|
1,401,860
|
|
|
|
(4
|
%)
|
Property, plant, and equipment, net
|
|
|
374,660
|
|
|
|
390,235
|
|
|
|
(4
|
%)
|
Goodwill
|
|
|
1,088,032
|
|
|
|
1,096,329
|
|
|
|
(1
|
%)
|
Other intangible assets, net
|
|
|
429,567
|
|
|
|
329,668
|
|
|
|
30
|
%
|
Other assets
|
|
|
19,160
|
|
|
|
18,229
|
|
|
|
5
|
%
|
|
Total assets
|
|
|
$
|
3,255,385
|
|
|
|
$
|
3,236,321
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term and short term debt
|
|
|
$
|
243
|
|
|
|
$
|
150
|
|
|
|
62
|
%
|
|
Accounts payable
|
|
|
232,983
|
|
|
|
185,176
|
|
|
|
26
|
%
|
|
Accrued expenses
|
|
|
166,954
|
|
|
|
150,406
|
|
|
|
11
|
%
|
|
Income taxes payable
|
|
|
5,811
|
|
|
|
4,564
|
|
|
|
27
|
%
|
|
Deferred revenue
|
|
|
236,508
|
|
|
|
214,891
|
|
|
|
10
|
%
|
|
Other current liabilities
|
|
|
44,829
|
|
|
|
35,810
|
|
|
|
25
|
%
|
|
Total current liabilities
|
|
|
687,328
|
|
|
|
590,997
|
|
|
|
16
|
%
|
Long-term debt, net
|
|
|
762,313
|
|
|
|
813,989
|
|
|
|
(6
|
%)
|
Deferred tax liabilities, net
|
|
|
47,121
|
|
|
|
49,360
|
|
|
|
(5
|
%)
|
Accrued pension and other postretirement benefit costs
|
|
|
101,227
|
|
|
|
121,043
|
|
|
|
(16
|
%)
|
Long-term portion of environmental reserves
|
|
|
15,777
|
|
|
|
14,546
|
|
|
|
8
|
%
|
Other liabilities
|
|
|
110,838
|
|
|
|
118,586
|
|
|
|
(7
|
%)
|
|
Total liabilities
|
|
|
1,724,604
|
|
|
|
1,708,521
|
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
Common stock, $1 par value
|
|
|
$
|
49,187
|
|
|
|
$
|
49,187
|
|
|
|
0
|
%
|
Additional paid in capital
|
|
|
118,234
|
|
|
|
120,609
|
|
|
|
(2
|
%)
|
Retained earnings
|
|
|
2,191,471
|
|
|
|
1,944,324
|
|
|
|
13
|
%
|
Accumulated other comprehensive loss
|
|
|
(288,447
|
)
|
|
|
(216,840
|
)
|
|
|
33
|
%
|
Less: cost of treasury stock
|
|
|
(539,664
|
)
|
|
|
(369,480
|
)
|
|
|
46
|
%
|
|
Total stockholders' equity
|
|
|
1,530,781
|
|
|
|
1,527,800
|
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
3,255,385
|
|
|
|
$
|
3,236,321
|
|
|
|
1
|
%
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
SEGMENT INFORMATION (UNAUDITED)
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
2018
|
|
|
2017
|
|
|
%
|
|
|
2018
|
|
|
2017
|
|
|
%
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
304,835
|
|
|
|
$
|
298,329
|
|
|
|
2
|
%
|
|
|
$
|
1,209,178
|
|
|
|
$
|
1,162,689
|
|
|
|
4
|
%
|
Defense
|
|
|
150,924
|
|
|
|
172,511
|
|
|
|
(13
|
%)
|
|
|
554,374
|
|
|
|
555,479
|
|
|
|
0
|
%
|
Power
|
|
|
192,863
|
|
|
|
141,041
|
|
|
|
37
|
%
|
|
|
648,283
|
|
|
|
552,858
|
|
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales
|
|
|
$
|
648,622
|
|
|
|
$
|
611,881
|
|
|
|
6
|
%
|
|
|
$
|
2,411,835
|
|
|
|
$
|
2,271,026
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
46,922
|
|
|
|
$
|
47,272
|
|
|
|
(1
|
%)
|
|
|
$
|
182,669
|
|
|
|
$
|
168,146
|
|
|
|
9
|
%
|
Defense
|
|
|
36,462
|
|
|
|
43,538
|
|
|
|
(16
|
%)
|
|
|
128,446
|
|
|
|
109,338
|
|
|
|
17
|
%
|
Power
|
|
|
36,066
|
|
|
|
23,928
|
|
|
|
51
|
%
|
|
|
98,858
|
|
|
|
81,119
|
|
|
|
22
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments
|
|
|
$
|
119,450
|
|
|
|
$
|
114,738
|
|
|
|
4
|
%
|
|
|
$
|
409,973
|
|
|
|
$
|
358,603
|
|
|
|
14
|
%
|
Corporate and other
|
|
|
(9,445
|
)
|
|
|
(9,456
|
)
|
|
|
0
|
%
|
|
|
(36,347
|
)
|
|
|
(33,483
|
)
|
|
|
(9
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
|
$
|
110,005
|
|
|
|
$
|
105,282
|
|
|
|
4
|
%
|
|
|
$
|
373,626
|
|
|
|
$
|
325,120
|
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
15.4
|
%
|
|
|
15.8
|
%
|
|
|
(40
|
bps)
|
|
|
15.1
|
%
|
|
|
14.5
|
%
|
|
|
60
|
bps
|
Defense
|
|
|
24.2
|
%
|
|
|
25.2
|
%
|
|
|
(100
|
bps)
|
|
|
23.2
|
%
|
|
|
19.7
|
%
|
|
|
350
|
bps
|
Power
|
|
|
18.7
|
%
|
|
|
17.0
|
%
|
|
|
170
|
bps
|
|
|
15.2
|
%
|
|
|
14.7
|
%
|
|
|
50
|
bps
|
Total Curtiss-Wright
|
|
|
17.0
|
%
|
|
|
17.2
|
%
|
|
|
(20
|
bps)
|
|
|
15.5
|
%
|
|
|
14.3
|
%
|
|
|
120
|
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment margins
|
|
|
18.4
|
%
|
|
|
18.8
|
%
|
|
|
(40
|
bps)
|
|
|
17.0
|
%
|
|
|
15.8
|
%
|
|
|
120
|
bps
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
SALES BY END MARKET (UNAUDITED)
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
|
|
|
Change
|
|
|
|
2018
|
|
|
2017
|
|
|
%
|
|
|
2018
|
|
|
2017
|
|
|
%
|
Defense markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
|
$
|
104,142
|
|
|
|
$
|
112,193
|
|
|
|
(7
|
%)
|
|
|
$
|
376,951
|
|
|
|
$
|
372,678
|
|
|
|
1
|
%
|
Ground
|
|
|
28,667
|
|
|
|
29,518
|
|
|
|
(3
|
%)
|
|
|
97,131
|
|
|
|
96,042
|
|
|
|
1
|
%
|
Naval
|
|
|
134,020
|
|
|
|
112,371
|
|
|
|
19
|
%
|
|
|
486,476
|
|
|
|
408,221
|
|
|
|
19
|
%
|
Total Defense
|
|
|
$
|
266,829
|
|
|
|
$
|
254,082
|
|
|
|
5
|
%
|
|
|
$
|
960,558
|
|
|
|
$
|
876,941
|
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
|
$
|
108,529
|
|
|
|
$
|
105,457
|
|
|
|
3
|
%
|
|
|
$
|
414,422
|
|
|
|
$
|
409,384
|
|
|
|
1
|
%
|
Power Generation
|
|
|
124,317
|
|
|
|
109,742
|
|
|
|
13
|
%
|
|
|
431,793
|
|
|
|
423,747
|
|
|
|
2
|
%
|
General Industrial
|
|
|
148,947
|
|
|
|
142,600
|
|
|
|
4
|
%
|
|
|
605,062
|
|
|
|
560,954
|
|
|
|
8
|
%
|
Total Commercial
|
|
|
$
|
381,793
|
|
|
|
$
|
357,799
|
|
|
|
7
|
%
|
|
|
$
|
1,451,277
|
|
|
|
$
|
1,394,085
|
|
|
|
4
|
%
|
Total Curtiss-Wright
|
|
|
$
|
648,622
|
|
|
|
$
|
611,881
|
|
|
|
6
|
%
|
|
|
$
|
2,411,835
|
|
|
|
$
|
2,271,026
|
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
December 31,
|
2018 vs. 2017
|
|
|
|
Commercial/Industrial
|
|
|
Defense
|
|
|
Power
|
|
|
Total Curtiss-Wright
|
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
Organic
|
|
|
3
|
%
|
|
|
(2
|
%)
|
|
|
(12
|
%)
|
|
|
(18
|
%)
|
|
|
21
|
%
|
|
|
37
|
%
|
|
|
3
|
%
|
|
|
0
|
%
|
Acquisitions
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
16
|
%
|
|
|
14
|
%
|
|
|
4
|
%
|
|
|
3
|
%
|
Foreign Currency
|
|
|
(1
|
%)
|
|
|
1
|
%
|
|
|
(1
|
%)
|
|
|
2
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
(1
|
%)
|
|
|
1
|
%
|
Total
|
|
|
2
|
%
|
|
|
(1
|
%)
|
|
|
(13
|
%)
|
|
|
(16
|
%)
|
|
|
37
|
%
|
|
|
51
|
%
|
|
|
6
|
%
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
December 31,
|
|
|
|
2018 vs. 2017
|
|
|
|
Commercial/Industrial
|
|
|
Defense
|
|
|
Power
|
|
|
Total Curtiss-Wright
|
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
|
|
Sales
|
|
|
Operating
income
|
Organic
|
|
|
3
|
%
|
|
|
7
|
%
|
|
|
(1
|
%)
|
|
|
17
|
%
|
|
|
6
|
%
|
|
|
21
|
%
|
|
|
3
|
%
|
|
|
14
|
%
|
Acquisitions
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
11
|
%
|
|
|
1
|
%
|
|
|
3
|
%
|
|
|
0
|
%
|
Foreign Currency
|
|
|
1
|
%
|
|
|
2
|
%
|
|
|
1
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
1
|
%
|
Total
|
|
|
4
|
%
|
|
|
9
|
%
|
|
|
0
|
%
|
|
|
17
|
%
|
|
|
17
|
%
|
|
|
22
|
%
|
|
|
6
|
%
|
|
|
15
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
Year Ended
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
237,298
|
|
|
|
$
|
226,405
|
|
|
|
$
|
336,273
|
|
|
|
$
|
388,712
|
|
Capital expenditures
|
|
|
(23,130
|
)
|
|
|
(17,831
|
)
|
|
|
(53,417
|
)
|
|
|
(52,705
|
)
|
Free cash flow
|
|
|
$
|
214,168
|
|
|
|
$
|
208,574
|
|
|
|
$
|
282,856
|
|
|
|
$
|
336,007
|
|
Pension payment
|
|
|
—
|
|
|
|
—
|
|
|
|
50,000
|
|
|
|
|
Adjusted free cash flow
|
|
|
$
|
214,168
|
|
|
|
$
|
208,574
|
|
|
|
$
|
332,856
|
|
|
|
$
|
336,007
|
|
Free Cash Flow Conversion
|
|
|
259
|
%
|
|
|
308
|
%
|
|
|
121
|
%
|
|
|
156
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION
|
2019 Guidance
|
As of February 26, 2019
|
($'s in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
Reported
(GAAP)
|
|
|
2018
Adjustments
(1)
(Non-GAAP)
|
|
|
2018
Adjusted
(Non-GAAP)
|
|
|
2019
Reported Guidance
(2)(3)(4)
(GAAP)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
|
High
|
|
|
2019 Chg vs 2018 Adjusted
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
1,209
|
|
|
|
$
|
-
|
|
|
|
$
|
1,209
|
|
|
|
$
|
1,245
|
|
|
|
$
|
1,270
|
|
|
|
|
Defense
|
|
|
|
554
|
|
|
|
|
-
|
|
|
|
|
554
|
|
|
|
|
565
|
|
|
|
|
575
|
|
|
|
|
Power
|
|
|
|
648
|
|
|
|
|
-
|
|
|
|
|
648
|
|
|
|
|
680
|
|
|
|
|
690
|
|
|
|
|
Total sales
|
|
|
$
|
2,412
|
|
|
|
$
|
-
|
|
|
|
$
|
2,412
|
|
|
|
$
|
2,490
|
|
|
|
$
|
2,535
|
|
|
|
3 to 5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
183
|
|
|
|
$
|
-
|
|
|
|
$
|
183
|
|
|
|
$
|
193
|
|
|
|
$
|
198
|
|
|
|
|
Defense
|
|
|
|
128
|
|
|
|
|
-
|
|
|
|
|
128
|
|
|
|
|
128
|
|
|
|
|
131
|
|
|
|
|
Power
|
|
|
|
99
|
|
|
|
|
9
|
|
|
|
|
108
|
|
|
|
|
109
|
|
|
|
|
111
|
|
|
|
|
Total segments
|
|
|
|
410
|
|
|
|
|
9
|
|
|
|
|
419
|
|
|
|
|
430
|
|
|
|
|
440
|
|
|
|
|
Corporate and other
|
|
|
|
(36
|
)
|
|
|
|
-
|
|
|
|
|
(36
|
)
|
|
|
|
(34
|
)
|
|
|
|
(36
|
)
|
|
|
|
Total operating income
|
|
|
$
|
374
|
|
|
|
$
|
9
|
|
|
|
$
|
382
|
|
|
|
$
|
396
|
|
|
|
$
|
405
|
|
|
|
4 to 6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
$
|
(34
|
)
|
|
|
$
|
-
|
|
|
|
$
|
(34
|
)
|
|
|
$
|
(33
|
)
|
|
|
$
|
(33
|
)
|
|
|
|
Other income, net
|
|
|
|
17
|
|
|
|
|
-
|
|
|
|
|
17
|
|
|
|
|
19
|
|
|
|
|
19
|
|
|
|
|
Earnings before income taxes
|
|
|
|
356
|
|
|
|
|
9
|
|
|
|
|
365
|
|
|
|
|
383
|
|
|
|
|
391
|
|
|
|
|
Provision for income taxes
|
|
|
|
(81
|
)
|
|
|
|
(2
|
)
|
|
|
|
(83
|
)
|
|
|
|
(88
|
)
|
|
|
|
(90
|
)
|
|
|
|
Net earnings
|
|
|
$
|
276
|
|
|
|
$
|
7
|
|
|
|
$
|
282
|
|
|
|
$
|
295
|
|
|
|
$
|
301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
6.22
|
|
|
|
$
|
0.15
|
|
|
|
$
|
6.37
|
|
|
|
$
|
6.80
|
|
|
|
$
|
6.95
|
|
|
|
7 to 9%
|
Diluted shares outstanding
|
|
|
|
44.3
|
|
|
|
|
|
|
|
44.3
|
|
|
|
|
43.4
|
|
|
|
|
43.4
|
|
|
|
|
Effective tax rate
|
|
|
|
22.6
|
%
|
|
|
|
|
|
|
22.6
|
%
|
|
|
|
23.0
|
%
|
|
|
|
23.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
|
15.1
|
%
|
|
|
|
-
|
|
|
|
|
15.1
|
%
|
|
|
|
15.5
|
%
|
|
|
|
15.6
|
%
|
|
|
40 to 50 bps
|
Defense
|
|
|
|
23.2
|
%
|
|
|
|
-
|
|
|
|
|
23.2
|
%
|
|
|
|
22.6
|
%
|
|
|
|
22.7
|
%
|
|
|
(50 to 60 bps)
|
Power
|
|
|
|
15.2
|
%
|
|
|
+140 bps
|
|
|
|
16.6
|
%
|
|
|
|
16.0
|
%
|
|
|
|
16.1
|
%
|
|
|
(50 to 60 bps)
|
Total operating margin
|
|
|
|
15.5
|
%
|
|
|
+30 bps
|
|
|
|
15.8
|
%
|
|
|
|
15.9
|
%
|
|
|
|
16.0
|
%
|
|
|
10 to 20 bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Full year amounts may not add due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted financials are defined as Reported Operating Income,
Operating Margin, Net Income and Diluted EPS under GAAP excluding
the impact of first year purchase accounting costs associated with
acquisitions for current and prior year periods, specifically
one-time inventory step-up, backlog amortization and transaction
costs.
|
|
|
|
(2) Commercial/Industrial segment 2019 guidance reflects improved
profitability due to higher sales and benefits of our ongoing margin
improvement initiatives, partially offset by $4 million for tariffs
and a $3 million increase in R&D investments.
|
|
|
|
(3) Defense segment 2019 guidance reflects reduced profitability,
despite higher sales, due to a $5 million increase in R&D
investments.
|
|
|
|
(4) Power segment 2019 guidance reflects reduced profitability,
despite solid sales growth, due to $6 million for transition and IT
security costs related to the relocation of our DRG business and a
$2 million increase in R&D investments.
|
|
|
CURTISS-WRIGHT CORPORATION
|
2019 Sales Growth Guidance by End Market
|
As of February 26, 2019
|
|
|
|
|
|
2019 % Change vs 2018
|
Defense Markets
|
|
|
Aerospace
|
|
6 - 8%
|
Ground
|
|
5 - 7%
|
Navy
|
|
6 - 8%
|
Total Defense
|
|
6 - 8%
|
|
|
|
Commercial Markets
|
|
|
Commercial Aerospace
|
|
4 - 6%
|
Power Generation
|
|
1 - 3%
|
General Industrial
|
|
1 - 3%
|
Total Commercial
|
|
1 - 3%
|
|
|
|
Total Curtiss-Wright Sales
|
|
3 - 5%
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION
|
|
|
|
2017 Reconciliation Reported (GAAP)
(1)
to Adjusted (Non-GAAP)
(2)
|
|
|
|
($'s in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported
1Q 2017
|
|
|
Adjustments
(Non-GAAP)
|
|
|
Adjusted
1Q 2017
|
|
|
|
Reported
2Q 2017
|
|
|
Adjustments
(Non-GAAP)
|
|
|
Adjusted
2Q 2017
|
|
|
|
Reported
3Q 2017
|
|
|
|
Reported
4Q 2017
|
|
|
|
Reported
FY 2017
|
|
|
Adjustments
Non-GAAP)
|
|
|
Adjusted
FY 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
279
|
|
|
|
$
|
-
|
|
|
|
$
|
279
|
|
|
|
|
$
|
292
|
|
|
|
$
|
-
|
|
|
|
$
|
292
|
|
|
|
|
$
|
294
|
|
|
|
|
$
|
298
|
|
|
|
|
$
|
1,163
|
|
|
|
$
|
-
|
|
|
|
$
|
1,163
|
|
|
|
|
Defense
|
|
|
|
115
|
|
|
|
|
-
|
|
|
|
|
115
|
|
|
|
|
|
126
|
|
|
|
|
-
|
|
|
|
|
126
|
|
|
|
|
|
142
|
|
|
|
|
|
173
|
|
|
|
|
|
555
|
|
|
|
|
-
|
|
|
|
|
555
|
|
|
|
|
Power
|
|
|
|
130
|
|
|
|
|
-
|
|
|
|
|
130
|
|
|
|
|
|
150
|
|
|
|
|
-
|
|
|
|
|
150
|
|
|
|
|
|
132
|
|
|
|
|
|
141
|
|
|
|
|
|
553
|
|
|
|
|
-
|
|
|
|
|
553
|
|
|
|
|
Total sales
|
|
|
$
|
524
|
|
|
|
|
-
|
|
|
|
$
|
524
|
|
|
|
|
$
|
568
|
|
|
|
|
-
|
|
|
|
$
|
568
|
|
|
|
|
$
|
568
|
|
|
|
|
$
|
612
|
|
|
|
|
$
|
2,271
|
|
|
|
|
-
|
|
|
|
$
|
2,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
$
|
31
|
|
|
|
$
|
-
|
|
|
|
$
|
31
|
|
|
|
|
$
|
44
|
|
|
|
$
|
-
|
|
|
|
$
|
44
|
|
|
|
|
$
|
47
|
|
|
|
|
$
|
47
|
|
|
|
|
$
|
168
|
|
|
|
$
|
-
|
|
|
|
$
|
168
|
|
|
|
|
Defense
|
|
|
|
11
|
|
|
|
|
5
|
|
|
|
|
16
|
|
|
|
|
|
21
|
|
|
|
|
5
|
|
|
|
|
26
|
|
|
|
|
|
34
|
|
|
|
|
|
44
|
|
|
|
|
|
109
|
|
|
|
|
10
|
|
|
|
|
119
|
|
|
|
|
Power
|
|
|
|
16
|
|
|
|
|
-
|
|
|
|
|
16
|
|
|
|
|
|
24
|
|
|
|
|
-
|
|
|
|
|
24
|
|
|
|
|
|
18
|
|
|
|
|
|
24
|
|
|
|
|
|
81
|
|
|
|
|
-
|
|
|
|
|
81
|
|
|
|
|
Total segments
|
|
|
|
57
|
|
|
|
|
5
|
|
|
|
|
62
|
|
|
|
|
|
89
|
|
|
|
|
5
|
|
|
|
|
94
|
|
|
|
|
|
98
|
|
|
|
|
|
115
|
|
|
|
|
|
359
|
|
|
|
|
10
|
|
|
|
|
368
|
|
|
|
|
Corporate and other
|
|
|
|
(10
|
)
|
|
|
|
-
|
|
|
|
|
(10
|
)
|
|
|
|
|
(9
|
)
|
|
|
|
-
|
|
|
|
|
(9
|
)
|
|
|
|
|
(6
|
)
|
|
|
|
|
(9
|
)
|
|
|
|
|
(34
|
)
|
|
|
|
-
|
|
|
|
|
(34
|
)
|
|
|
|
Total operating income
|
|
|
$
|
48
|
|
|
|
$
|
5
|
|
|
|
$
|
52
|
|
|
|
|
$
|
80
|
|
|
|
$
|
5
|
|
|
|
$
|
85
|
|
|
|
|
$
|
92
|
|
|
|
|
$
|
105
|
|
|
|
|
$
|
325
|
|
|
|
$
|
10
|
|
|
|
$
|
335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
$
|
(10
|
)
|
|
|
$
|
-
|
|
|
|
$
|
(10
|
)
|
|
|
|
$
|
(11
|
)
|
|
|
$
|
-
|
|
|
|
$
|
(11
|
)
|
|
|
|
$
|
(10
|
)
|
|
|
|
$
|
(10
|
)
|
|
|
|
$
|
(41
|
)
|
|
|
$
|
-
|
|
|
|
$
|
(41
|
)
|
|
|
|
Other income, net
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
-
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
4
|
|
|
|
|
|
16
|
|
|
|
|
-
|
|
|
|
|
16
|
|
|
|
|
Earnings before income taxes
|
|
|
|
41
|
|
|
|
|
5
|
|
|
|
|
46
|
|
|
|
|
|
73
|
|
|
|
|
5
|
|
|
|
|
78
|
|
|
|
|
|
86
|
|
|
|
|
|
99
|
|
|
|
|
|
300
|
|
|
|
|
10
|
|
|
|
|
309
|
|
|
|
|
Provision for income taxes
|
|
|
|
(9
|
)
|
|
|
|
(1
|
)
|
|
|
|
(10
|
)
|
|
|
|
|
(22
|
)
|
|
|
|
(2
|
)
|
|
|
|
(24
|
)
|
|
|
|
|
(22
|
)
|
|
|
|
|
(32
|
)
|
|
|
|
|
(85
|
)
|
|
|
|
(3
|
)
|
|
|
|
(88
|
)
|
|
|
|
Net earnings
|
|
|
$
|
33
|
|
|
|
$
|
4
|
|
|
|
$
|
36
|
|
|
|
|
$
|
51
|
|
|
|
$
|
4
|
|
|
|
$
|
54
|
|
|
|
|
$
|
64
|
|
|
|
|
$
|
68
|
|
|
|
|
$
|
215
|
|
|
|
$
|
7
|
|
|
|
$
|
222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
$
|
0.73
|
|
|
|
$
|
0.08
|
|
|
|
$
|
0.81
|
|
|
|
|
$
|
1.13
|
|
|
|
$
|
0.08
|
|
|
|
$
|
1.21
|
|
|
|
|
$
|
1.43
|
|
|
|
|
$
|
1.52
|
|
|
|
|
$
|
4.80
|
|
|
|
$
|
0.16
|
|
|
|
$
|
4.96
|
|
|
|
|
Diluted shares outstanding
|
|
|
|
44.9
|
|
|
|
|
|
|
|
44.9
|
|
|
|
|
|
44.8
|
|
|
|
|
|
|
|
44.8
|
|
|
|
|
|
44.7
|
|
|
|
|
|
44.7
|
|
|
|
|
|
44.8
|
|
|
|
|
|
|
|
44.8
|
|
|
|
|
Effective tax rate
|
|
|
|
20.9
|
%
|
|
|
|
|
|
|
20.9
|
%
|
|
|
|
|
30.3
|
%
|
|
|
|
|
|
|
30.3
|
%
|
|
|
|
|
26.0
|
%
|
|
|
|
|
31.8
|
%
|
|
|
|
|
28.3
|
%
|
|
|
|
|
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
15.0
|
%
|
|
|
|
|
|
|
15.0
|
%
|
|
|
|
|
15.9
|
%
|
|
|
|
|
15.8
|
%
|
|
|
|
|
14.5
|
%
|
|
|
|
|
|
|
14.5
|
%
|
|
|
|
Defense
|
|
|
|
9.7
|
%
|
|
|
+395 bps
|
|
|
|
13.6
|
%
|
|
|
|
|
16.7
|
%
|
|
|
+410 bps
|
|
|
|
20.8
|
%
|
|
|
|
|
23.7
|
%
|
|
|
|
|
25.2
|
%
|
|
|
|
|
19.7
|
%
|
|
|
+170 bps
|
|
|
|
21.4
|
%
|
|
|
|
Power
|
|
|
|
11.9
|
%
|
|
|
|
|
|
|
11.9
|
%
|
|
|
|
|
15.9
|
%
|
|
|
|
|
|
|
15.9
|
%
|
|
|
|
|
13.5
|
%
|
|
|
|
|
17.0
|
%
|
|
|
|
|
14.7
|
%
|
|
|
|
|
|
|
14.7
|
%
|
|
|
|
Total operating margin
|
|
|
|
9.1
|
%
|
|
|
+90 bps
|
|
|
|
10.0
|
%
|
|
|
|
|
14.0
|
%
|
|
|
+100 bps
|
|
|
|
15.0
|
%
|
|
|
|
|
16.3
|
%
|
|
|
|
|
17.2
|
%
|
|
|
|
|
14.3
|
%
|
|
|
+40 bps
|
|
|
|
14.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note: Full year amounts may not add due to rounding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Reported 2017 results reflect the retrospective impact from
the adoption of ASU 2017-07 “Improving the Presentation of Net
Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,”
which results in reclassification of the non-service components of
Pension expense from Operating Income to Other Income/Expense
effective for fiscal years beginning after December 15, 2017. This
accounting change lowers operating income by $14.6 million and
lowers operating margin by 70 basis points for the full-year 2017
period. This change is neutral to earnings per share.
|
|
|
|
|
|
|
|
(2) Adjusted operating income, operating margin and diluted EPS
exclude first year purchase accounting costs, specifically one-time
inventory step-up, backlog amortization and transaction costs,
associated with the acquisition of TTC in 2017 (Defense segment).
First year purchase accounting costs in the third and fourth
quarters of 2017 are not material.
|
|
|
|
|
|
|
|
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 9,000 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, 2017, 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:
https://www.businesswire.com/news/home/20190226006202/en/
Jim Ryan
(704) 869-4621
[email protected]
Source: Curtiss-Wright Corporation