Curtiss-Wright Corporation (NYSE:CW) reported financial results for
the third quarter and nine months ended September 30, 2015.
Third Quarter 2015
Highlights
- The Company increases full-year 2015 expectations for operating
margin to 13.5% to 13.6%, despite lowered sales expectations, while
maintaining its outlook for diluted earnings per share (EPS) of
$3.80 to $3.90 and adjusted free cash flow of $245 million to $265
million;
- Third quarter diluted EPS of $0.80 includes a one-time pension
settlement charge of $7.3 million ($0.10 impact) and a shift in
timing of the receipt of the new AP1000 order to the fourth quarter
($0.05 impact), otherwise pro forma EPS would have been $0.95 in
the quarter;
- Net sales decreased 6% to $526 million, from $558 million in
2014; Organic (excluding effects of foreign currency translation,
acquisitions and divestitures) sales down 4%;
- Operating income decreased 14% to $64 million, from $74 million
in 2014;
- Operating margin decreased 120 basis points to 12.1% from 13.3%
in 2014; Excluding the one-time pension settlement charge, pro
forma operating margin increased 20 basis points to 13.5%;
- Net earnings from continuing operations decreased 14% to $38
million, or $0.80 per diluted share, from $44 million, or $0.90 per
diluted share, in 2014; and
- Invested $88M in share repurchases in the third quarter,
increasing year-to-date share repurchases to $185 million.
"Our third quarter results include a one-time pension settlement
charge and a reflection of the current market conditions," said
David C. Adams, Chairman and CEO of Curtiss-Wright Corporation.
"Further, the receipt of a new China AP1000 order, originally
expected in the third quarter, is now expected to be received in
the fourth quarter. Despite those impacts, we produced solid
profitability improvement in the Power segment driven by lower
AP1000 program costs and in the Defense segment due to strong sales
in aerospace defense."
"Looking at the remainder of 2015, despite lowering our full
year sales outlook based on weaker third quarter demand in some of
our industrial businesses, particularly those with exposure to the
energy markets, we are maintaining our full-year diluted EPS
guidance of $3.80 to $3.90. Additionally we are increasing our
full-year 2015 operating margin guidance by 20 basis points to a
range of 13.5% to 13.6%, a 90 to 100 basis point improvement year
over year, as we continue our drive to top-quartile financial
performance.
"Regarding the AP1000 program, we successfully concluded the
required design modifications, final testing and post-test
inspections on our first-of-a-kind reactor coolant pump (RCP) in
October. We now have a fully qualified design that meets all
necessary specifications. As a result, we are making preparations
to commence shipping production RCPs in the fourth quarter. While
the new China AP1000 RCP order is currently in our fourth quarter
expectations, the timing of receipt of the order will ultimately be
dictated by our customer's needs for nuclear energy.
"In addition, we have held true to our commitment to return
capital to shareholders, and thus far in 2015, we have returned
more than $200 million through consistent share repurchases and
dividend distributions. Share repurchases in the third quarter
approximated $88 million and included both planned and
opportunistic repurchases. In the fourth quarter, we expect to
complete the balance of our $300 million share repurchase program
authorized for 2015. Overall, we remain focused on consistently
enhancing shareholder value by expanding operating margins,
generating strong free cash flow and maintaining a balanced capital
allocation strategy."
Third Quarter 2015
Operating Results from Continuing Operations |
|
|
|
|
(In thousands) |
3Q-2015 |
3Q-2014 |
%
Change |
Sales |
$525,535 |
$558,383 |
(6%) |
Operating income |
63,813 |
74,249 |
(14%) |
Operating margin |
12.1% |
13.3% |
(120 bps) |
Sales
Sales of $526 million in the third quarter decreased $33
million, or 6%, compared to the prior year, reflecting a 4% decline
in organic sales and unfavorable foreign currency
translation.
From an end market perspective, sales to the commercial markets
decreased 11%, while sales to the defense markets increased 3%,
compared to the prior year.
Please refer to the accompanying tables for a breakdown of sales
by end market.
Operating Income
Operating income in the third quarter was $64 million, a
decrease of $10 million, or 14%, compared to the prior
year. This performance was primarily driven by reduced
operating income resulting from lower sales in the
Commercial/Industrial segment and a one-time $7.3 million pension
settlement charge related to the retirement of the Company's former
Chairman. Those decreases were partially offset by solid
organic growth in the Power segment and the benefit of favorable
foreign currency translation in the Defense segment.
Operating margin was 12.1%, a decrease of 120 basis points over
the prior year, primarily reflecting lower segment operating income
and the aforementioned pension charge, partially offset by the
benefits of our ongoing margin improvement initiatives.
Excluding the impact of the one-time pension settlement
charge, operating margin was 13.5%, an increase of 20 basis points
over the prior year.
Non-segment expense
Non-segment expenses increased 48% compared with the prior year,
primarily due to the aforementioned pension charge. Excluding
those costs, non-segment expenses decreased 22% primarily due to
lower foreign currency exchange losses in the current period.
Net Earnings
Third quarter net earnings decreased 14% from the comparable
prior year period, reflecting reduced operating income.
Interest expense of $9 million was in-line with the prior
year period.
Our effective tax rate for the current quarter was 30.7%, a
decrease from 31.8% in the prior year, principally driven by an
increased manufacturing deduction and foreign rate
differential.
Free Cash
Flow |
|
|
|
(In thousands) |
3Q-2015 |
3Q-2014 |
Net cash generated from operating
activities |
$106,579 |
$68,756 |
Capital expenditures |
(8,159) |
(18,484) |
Free cash flow |
$98,420 |
$50,272 |
Free cash flow, defined as cash flow from operations less
capital expenditures, was $98 million for the third quarter of
2015, compared to $50 million in the prior year period, or an
increase of $48 million. Net cash generated from operating
activities increased $38 million to $107 million, primarily due to
improved cash collections and the receipt of a large income tax
refund. Capital expenditures decreased $10 million to $8 million,
as the prior year period included investments in a facility
expansion that did not recur.
New Orders and Backlog
New orders of $494 million in the third quarter decreased 15%,
primarily due to reduced orders within the Commercial/Industrial
and Defense segments.
Backlog of $1.59 billion decreased 5% from December 31, 2014,
primarily due to reduced naval defense orders within the Power
segment.
Other Items – Share Repurchase
During the third quarter, the Company repurchased approximately
1.3 million shares of its common stock for approximately $88
million. Year-to-date through September 30, 2015, the Company
repurchased approximately 2.7 million shares of its common stock
for approximately $185 million.
Full-Year 2015 Guidance
The Company is updating its full-year 2015 financial guidance as
follows:
|
Prior Guidance |
Current Guidance |
Chg vs. 2014 |
Total sales |
$2.25 - $2.30 billion |
$2.19 - $2.24 billion |
(2%) to Flat |
Operating income |
$301 - $309 million |
$296 - $304 million |
5% - 8% |
Operating margin |
13.3% - 13.4% |
13.5% - 13.6% |
+ 90 - 100 bps |
Interest expense |
$36 - 37 million |
$35 - 36 million |
|
Effective tax rate |
31.5% - 31.75% |
31% |
|
Diluted earnings per share |
$3.80 - $3.90 |
No change |
10% - 13% |
Diluted shares outstanding |
47.8 million |
47.6 million |
|
Free cash flow |
$100 - $120 million |
No change |
|
Adjusted free cash flow * |
$245 - $265 million |
No change |
|
Notes: A more detailed breakdown of our 2015 guidance by
segment and by market can be found in the attached accompanying
schedules.
Effective January 30, 2015, Curtiss-Wright elected to make a
$145 million contribution to its corporate defined benefit pension
plan, which is expected to significantly reduce annual pension
expense and annual cash contributions going forward.
*Adjusted free cash flow guidance excludes the aforementioned
pension contribution of $145 million.
Third Quarter 2015 Segment Performance
Commercial/Industrial |
|
|
|
|
(In thousands) |
3Q-2015 |
3Q-2014 |
%
Change |
Sales |
$292,557 |
$312,808 |
(6%) |
Operating income |
40,259 |
51,069 |
(21%) |
Operating margin |
13.8% |
16.3% |
(250 bps) |
Sales for the third quarter were $293 million, a decrease of $20
million, or 6%, over the comparable prior year period.
Organic sales decreased 4% over the prior year period,
excluding $8 million in unfavorable foreign currency translation,
primarily within the general industrial market, and a $2 million
benefit from acquisitions. Within the commercial aerospace
market, we experienced lower sales of surface technology services,
most notably to Airbus, while OEM production sales to Boeing
remained essentially in-line with prior year levels, as
expected. In the general industrial market, our results
reflect continued lower sales of severe-service valves serving the
energy markets, particularly for international projects, along with
a modest reduction in sales for industrial vehicle products.
Those reductions were partially offset by higher valve sales
supporting the Virginia-class submarine program in the naval
defense market.
Operating income in the third quarter was $40 million, down 21%
from the comparable prior year period, while operating margin
decreased 250 basis points to 13.8%. Our results principally
reflect lower profitability for industrial valves products and
surface treatment services, based on lower sales volumes. Those
reductions were partially offset by improved profitability for
industrial vehicles products, despite lower sales volumes, due to
ongoing cost reduction initiatives.
Defense |
|
|
|
|
(In thousands) |
3Q-2015 |
3Q-2014 |
%
Change |
Sales |
$117,444 |
$127,061 |
(8%) |
Operating income |
25,477 |
22,480 |
13% |
Operating margin |
21.7% |
17.7% |
400 bps |
Sales for the third quarter were $117 million, a decrease of $10
million, or 8%, over the comparable prior year period. Organic
sales decreased 5% over the prior year period, excluding $3 million
in unfavorable foreign currency translation. In aerospace
defense, we experienced higher sales of embedded computing products
serving various fighter jet, helicopter and Intelligence,
Surveillance and Reconnaissance (ISR) programs, most notably on the
F-16, F-35 and Seahawk helicopter programs. In the ground defense
market, lower demand for ground combat and communications programs
domestically more than offset continued strong demand for turret
drive stabilization systems internationally, while we also
experienced lower embedded computing product sales in the naval
defense market. Within the commercial aerospace market, our
results reflect lower revenues related to avionics and flight test
equipment, which led to reduced rotorcraft and regional jet
sales.
Operating income in the third quarter was $25 million, an
increase of $3 million, or 13%, compared to the prior year period,
while operating margin improved 400 basis points to 21.7%. On
an organic basis, operating income was flat while operating margin
increased 80 basis points as compared to the prior year, excluding
$3 million in favorable foreign currency translation. This
improvement in operating margin was driven primarily by higher
sales of turret drive stabilization systems and embedded computing
products, as well as the benefits of our ongoing margin improvement
initiatives.
Power |
|
|
|
|
(In thousands) |
3Q-2015 |
3Q-2014 |
% Change |
Sales |
$115,534 |
$118,514 |
(3%) |
Operating income |
13,545 |
11,121 |
22% |
Operating margin |
11.7% |
9.4% |
230 bps |
Sales for the third quarter were $116 million, a decrease of $3
million, or 3%, over the comparable prior year period. Within the
power generation market, we experienced lower aftermarket sales
supporting domestic nuclear operating reactors, as a result of
ongoing deferred maintenance spending, which more than offset
higher sales supporting international reactors. In the naval
defense market, our performance was driven by higher sales of pumps
and generators supporting the Virginia-class submarine program as
well as higher production on the Ford-class aircraft carrier
program.
Operating income in the third quarter was $14 million, an
increase of $2 million, or 22%, compared to the prior year period,
while operating margin improved 230 basis points to
11.7%. This improvement in operating income and margin was
primarily driven by lower costs on the AP1000 program, as we have
concluded the required testing and modifications to our reactor
coolant pumps, along with the benefits of our ongoing margin
improvement initiatives. We also experienced higher
profitability in our aftermarket power generation business, despite
lower sales volumes, reflecting our ongoing operational and margin
improvement initiatives.
Conference Call Information
The Company will host a conference call to discuss third quarter
2015 financial results and updates to 2015 guidance at 9:00 a.m.
EDT on Thursday, October 29, 2015. A live webcast of the call
and the accompanying financial presentation will be made available
on the internet by visiting the Investor Relations section of the
Company's website at www.curtisswright.com.
(Tables to Follow)
CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES |
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (UNAUDITED) |
($'s in thousands, except per
share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
Nine Months
Ended |
|
|
|
September
30, |
Change |
September
30, |
Change |
|
2015 |
2014 |
$ |
% |
2015 |
2014 |
$ |
% |
Product sales |
$ 427,732 |
$ 457,026 |
$ (29,294) |
(6%) |
$ 1,313,290 |
$ 1,351,126 |
$ (37,836) |
(3%) |
Service sales |
97,803 |
101,357 |
(3,554) |
(4%) |
303,638 |
319,414 |
(15,776) |
(5%) |
Total net sales |
525,535 |
558,383 |
(32,848) |
(6%) |
1,616,928 |
1,670,540 |
(53,612) |
(3%) |
|
|
|
|
|
|
|
|
|
Cost of product sales |
284,007 |
301,592 |
(17,585) |
(6%) |
864,701 |
890,051 |
(25,350) |
(3%) |
Cost of service sales |
56,034 |
63,460 |
(7,426) |
(12%) |
193,286 |
204,313 |
(11,027) |
(5%) |
Total cost of sales |
340,041 |
365,052 |
(25,011) |
(7%) |
1,057,987 |
1,094,364 |
(36,377) |
(3%) |
|
|
|
|
|
|
|
|
|
Gross profit |
185,494 |
193,331 |
(7,837) |
(4%) |
558,941 |
576,176 |
(17,235) |
(3%) |
|
|
|
|
|
|
|
|
|
Research and development expenses |
15,050 |
16,909 |
(1,859) |
(11%) |
45,633 |
51,150 |
(5,517) |
(11%) |
Selling expenses |
30,247 |
30,610 |
(363) |
(1%) |
90,440 |
95,340 |
(4,900) |
(5%) |
General and administrative expenses |
76,384 |
71,563 |
4,821 |
7% |
220,778 |
222,244 |
(1,466) |
(1%) |
|
|
|
|
|
|
|
|
|
Operating income |
63,813 |
74,249 |
(10,436) |
(14%) |
202,090 |
207,442 |
(5,352) |
(3%) |
|
|
|
|
|
|
|
|
|
Interest expense |
(8,972) |
(9,013) |
41 |
0% |
(26,953) |
(27,054) |
101 |
0% |
Other income, net |
161 |
(159) |
320 |
NM |
605 |
(70) |
675 |
NM |
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
55,002 |
65,077 |
(10,075) |
(15%) |
175,742 |
180,318 |
(4,576) |
(3%) |
Provision for income taxes |
16,860 |
20,699 |
(3,839) |
(19%) |
54,256 |
56,501 |
(2,245) |
(4%) |
Earnings from continuing operations |
$ 38,142 |
$ 44,378 |
$ (6,236) |
(14%) |
$ 121,486 |
$ 123,817 |
$ (2,331) |
(2%) |
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of
tax |
(4,258) |
(19,345) |
15,087 |
NM |
(45,874) |
(27,229) |
(18,645) |
NM |
|
|
|
|
|
|
|
|
|
Net earnings |
$ 33,884 |
$ 25,033 |
$ 8,851 |
35% |
$ 75,612 |
$ 96,588 |
$ (20,976) |
(22%) |
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
|
|
|
|
|
|
|
Earnings from continuing
operations |
$ 0.82 |
$ 0.92 |
|
|
$ 2.58 |
$ 2.58 |
|
|
Earnings from discontinued
operations |
(0.09) |
(0.40) |
|
|
(0.97) |
(0.57) |
|
|
Total |
$ 0.73 |
$ 0.52 |
|
|
$ 1.61 |
$ 2.01 |
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
|
|
|
|
|
|
Earnings from continuing
operations |
$ 0.80 |
$ 0.90 |
|
|
$ 2.53 |
$ 2.52 |
|
|
Earnings from discontinued
operations |
(0.09) |
(0.39) |
|
|
(0.96) |
(0.55) |
|
|
Total |
$ 0.71 |
$ 0.51 |
|
|
$ 1.57 |
$ 1.97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share |
$ 0.13 |
$ 0.13 |
|
|
$ 0.39 |
$ 0.39 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
46,366 |
48,067 |
|
|
47,082 |
48,054 |
|
|
Diluted |
47,395 |
49,101 |
|
|
48,106 |
49,136 |
|
|
|
|
|
|
|
|
|
|
|
NM- not meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES |
CONDENSED CONSOLIDATED
BALANCE SHEETS (UNAUDITED) |
($'s in thousands, except par
value) |
|
|
|
|
|
September 30, |
December 31, |
Change |
|
2015 |
2014 |
% |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ 247,925 |
$ 450,116 |
(45%) |
Receivables, net |
510,935 |
495,480 |
3% |
Inventories, net |
406,606 |
388,670 |
5% |
Deferred tax assets, net |
42,703 |
44,311 |
(4%) |
Assets held for sale |
202 |
147,347 |
(100%) |
Income tax receivable |
27,846 |
5,583 |
399% |
Other current assets |
30,372 |
39,568 |
(23%) |
Total current assets |
1,266,589 |
1,571,075 |
(19%) |
Property, plant, and equipment, net |
422,251 |
458,919 |
(8%) |
Goodwill |
979,087 |
998,506 |
(2%) |
Other intangible assets, net |
322,177 |
349,227 |
(8%) |
Other assets |
24,597 |
21,784 |
13% |
Total
assets |
$ 3,014,701 |
$ 3,399,511 |
(11%) |
|
|
|
|
Liabilities |
|
|
|
Current liabilities: |
|
|
|
Current portion of long-term
and short term debt |
$ 1,394 |
$ 1,069 |
30% |
Accounts payable |
130,673 |
152,266 |
(14%) |
Accrued expenses |
124,670 |
145,938 |
(15%) |
Income taxes payable |
8,768 |
22,472 |
(61%) |
Deferred revenue |
148,932 |
176,693 |
(16%) |
Liabilities held for sale |
742 |
35,392 |
(98%) |
Other current liabilities |
43,377 |
38,163 |
14% |
Total current liabilities |
458,556 |
571,993 |
(20%) |
Long-term debt |
957,511 |
953,279 |
0% |
Deferred tax liabilities, net |
101,418 |
51,554 |
97% |
Accrued pension and other postretirement
benefit costs |
75,564 |
226,687 |
(67%) |
Long-term portion of environmental
reserves |
14,568 |
14,911 |
(2%) |
Other liabilities |
87,023 |
102,654 |
(15%) |
Total liabilities |
1,694,640 |
1,921,078 |
(12%) |
|
|
|
|
Stockholders' equity |
|
|
|
Common stock, $1 par value |
49,190 |
49,190 |
0% |
Additional paid in capital |
155,973 |
158,043 |
(1%) |
Retained earnings |
1,526,678 |
1,469,306 |
4% |
Accumulated other comprehensive
loss |
(185,015) |
(128,411) |
44% |
Less: cost of treasury
stock |
(226,765) |
(69,695) |
225% |
Total stockholders' equity |
1,320,061 |
1,478,433 |
(11%) |
|
|
|
|
Total liabilities and
stockholders' equity |
$ 3,014,701 |
$ 3,399,511 |
(11%) |
|
|
|
|
|
|
|
|
CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES |
SEGMENT INFORMATION
(UNAUDITED) |
($'s in thousands) |
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
|
|
Change |
|
|
Change |
|
2015 |
2014 |
% |
2015 |
2014 |
% |
Sales: |
|
|
|
|
|
|
Commercial/Industrial |
$ 292,557 |
$ 312,808 |
(6%) |
$ 894,909 |
$ 927,559 |
(4%) |
Defense |
117,444 |
127,061 |
(8%) |
350,595 |
357,939 |
(2%) |
Power |
115,534 |
118,514 |
(3%) |
371,424 |
385,042 |
(4%) |
|
|
|
|
|
|
|
Total sales |
$ 525,535 |
$ 558,383 |
(6%) |
$ 1,616,928 |
$ 1,670,540 |
(3%) |
|
|
|
|
|
|
|
Operating income
(expense): |
|
|
|
|
|
|
Commercial/Industrial |
$ 40,259 |
$ 51,069 |
(21%) |
$ 128,801 |
$ 135,315 |
(5%) |
Defense |
25,477 |
22,480 |
13% |
67,895 |
56,266 |
21% |
Power |
13,545 |
11,121 |
22% |
34,510 |
40,261 |
(14%) |
|
|
|
|
|
|
|
Total segments |
$ 79,280 |
$ 84,670 |
(6%) |
$ 231,207 |
$ 231,842 |
(0%) |
Corporate and other |
(15,468) |
(10,421) |
(48%) |
(29,117) |
(24,400) |
(19%) |
|
|
|
|
|
|
|
Total operating income |
$ 63,813 |
$ 74,249 |
(14%) |
$ 202,090 |
$ 207,442 |
(3%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins: |
|
|
|
|
|
|
Commercial/Industrial |
13.8% |
16.3% |
|
14.4% |
14.6% |
|
Defense |
21.7% |
17.7% |
|
19.4% |
15.7% |
|
Power |
11.7% |
9.4% |
|
9.3% |
10.5% |
|
Total Curtiss-Wright |
12.1% |
13.3% |
|
12.5% |
12.4% |
|
|
|
|
|
|
|
|
Segment margins |
15.1% |
15.2% |
|
14.3% |
13.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES |
SALES BY END MARKET
(UNAUDITED) |
($'s in thousands) |
|
|
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September 30, |
September 30, |
|
|
|
Change |
|
|
Change |
|
2015 |
2014 |
% |
2015 |
2014 |
% |
Defense markets: |
|
|
|
|
|
|
Aerospace |
$ 81,758 |
$ 70,648 |
16% |
$ 228,865 |
$ 208,183 |
10% |
Ground |
18,522 |
23,788 |
(22%) |
61,415 |
55,326 |
11% |
Naval |
95,741 |
93,581 |
2% |
284,506 |
281,282 |
1% |
Other |
1,899 |
3,940 |
(52%) |
6,567 |
6,204 |
6% |
Total Defense |
$ 197,920 |
$ 191,957 |
3% |
$ 581,353 |
$ 550,995 |
6% |
|
|
|
|
|
|
|
Commercial markets: |
|
|
|
|
|
|
Commercial Aerospace |
$ 93,618 |
$ 106,089 |
(12%) |
$ 292,827 |
$ 315,618 |
(7%) |
Power Generation |
87,371 |
99,208 |
(12%) |
294,848 |
318,013 |
(7%) |
General Industrial |
146,626 |
161,129 |
(9%) |
447,900 |
485,914 |
(8%) |
Total Commercial |
$ 327,615 |
$ 366,426 |
(11%) |
$ 1,035,575 |
$ 1,119,545 |
(8%) |
|
|
|
|
|
|
|
Total Curtiss-Wright |
$ 525,535 |
$ 558,383 |
(6%) |
$ 1,616,928 |
$ 1,670,540 |
(3%) |
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information
The Corporation supplements our financial information determined
under U.S. generally accepted accounting principles (GAAP) with
certain non-GAAP financial information. We believe 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. We encourage investors to review our financial
statements and publicly-filed reports in their entirety and not to
rely on any single financial measure. The following definitions are
provided:
Organic Revenue and Organic Operating
income
The Corporation discloses organic revenue and organic operating
income because the Corporation believes it provides investors with
insight as to the Company's ongoing business performance.
Organic revenue and organic operating income are defined as revenue
and operating income excluding the impact of foreign currency
fluctuations and contributions from acquisitions made during the
last twelve months.
|
Three Months
Ended |
|
September
30, |
|
2015
vs 2014 |
|
Commercial/Industrial |
Defense |
Power |
Total
Curtiss-Wright |
|
Sales |
Operating income |
Sales |
Operating income |
Sales |
Operating income |
Sales |
Operating income |
Organic |
(4%) |
(23%) |
(5%) |
(1%) |
(3%) |
22% |
(4%) |
(20%) |
Acquisitions |
1% |
1% |
0% |
0% |
0% |
0% |
0% |
1% |
Foreign Currency |
(3%) |
1% |
(3%) |
14% |
(0%) |
0% |
(2%) |
5% |
Total |
(6%) |
(21%) |
(8%) |
13% |
(3%) |
22% |
(6%) |
(14%) |
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
September
30, |
|
2015
vs 2014 |
|
Commercial/Industrial |
Defense |
Power |
Total
Curtiss-Wright |
|
Sales |
Operating income |
Sales |
Operating income |
Sales |
Operating income |
Sales |
Operating income |
Organic |
(1%) |
(5%) |
1% |
7% |
(4%) |
(14%) |
(1%) |
(7%) |
Acquisitions |
0% |
1% |
0% |
0% |
0% |
(0%) |
0% |
1% |
Foreign Currency |
(3%) |
(1%) |
(3%) |
14% |
(0%) |
0% |
(2%) |
3% |
Total |
(4%) |
(5%) |
(2%) |
21% |
(4%) |
(14%) |
(3%) |
(3%) |
Free Cash Flow
The Corporation discloses free cash flow because the Corporation
believes it measures cash flow available for investing and
financing activities. Free cash flow is defined as net cash flow
provided by operating activities less capital expenditures. Free
cash flow represents cash generated after paying for interest on
borrowings, income taxes, capital expenditures, and working capital
requirements, but before repaying outstanding debt and investing
cash or utilizing debt credit lines to acquire businesses and make
other strategic investments.
CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES |
NON-GAAP FINANCIAL DATA
(UNAUDITED) |
($'s in thousands) |
|
|
|
|
|
|
Three Months
Ended |
Nine Months
Ended |
|
September
30, |
September
30, |
|
2015 |
2014 |
2015 |
2014 |
|
|
|
|
|
Net cash used by operating activities |
$ 106,579 |
$ 68,756 |
$ (4,691) |
$ 153,173 |
Capital expenditures |
(8,159) |
(18,484) |
(23,848) |
(54,480) |
Free cash flow |
$ 98,420 |
$ 50,272 |
$ (28,539) |
$ 98,693 |
|
|
|
|
|
Pension Payment |
-- |
13,500 |
145,000 |
39,800 |
|
|
|
|
|
Adjusted free cash flow |
$ 98,420 |
$ 63,772 |
$ 116,461 |
$ 138,493 |
|
|
|
|
|
Cash conversion * |
258% |
144% |
96% |
112% |
|
|
|
|
|
*Cash conversion is calculated as
adjusted free cash flow divided by earnings from continuing
operations |
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT
CORPORATION |
2015 Guidance (from
Continuing Operations) |
As of October 28,
2015 |
($'s in millions, except per
share data) |
|
|
|
|
|
|
|
|
|
2014 Pro |
2015
Guidance |
|
Forma |
Low |
High |
Sales: |
|
|
|
Commercial/Industrial |
$ 1,228 |
$ 1,190 |
$ 1,210 |
Defense |
490 |
485 |
500 |
Power |
525 |
515 |
530 |
Total sales |
$ 2,243 |
$ 2,190 |
$ 2,240 |
|
|
|
|
Operating income: |
|
|
|
Commercial/Industrial |
$ 179 |
$ 179 |
$ 182 |
Defense |
83 |
93 |
96 |
Power |
51 |
59 |
61 |
Total segments |
313 |
330 |
338 |
Corporate and other |
(30) |
(34) |
(34) |
Total operating income |
$ 282 |
$ 296 |
$ 304 |
|
|
|
|
Interest expense |
$ (36) |
$ (35) |
$ (36) |
Earnings before income
taxes |
247 |
261 |
269 |
Provision for income taxes |
(77) |
(81) |
(83) |
Net earnings |
$ 170 |
$ 180 |
$ 186 |
|
|
|
|
Reported diluted earnings per
share |
$ 3.46 |
$ 3.80 |
$ 3.90 |
Diluted shares outstanding |
49.0 |
47.6 |
47.6 |
Effective tax rate |
31.2% |
31.0% |
31.0% |
|
|
|
|
Operating margins: |
|
|
|
Commercial/Industrial |
14.5% |
14.9% |
15.0% |
Defense |
16.9% |
19.1% |
19.2% |
Power |
9.8% |
11.4% |
11.5% |
Total operating margin |
12.6% |
13.5% |
13.6% |
|
|
|
|
CURTISS-WRIGHT
CORPORATION |
2015 Sales Growth
Guidance by End Market (from Continuing Operations) |
As of October 28,
2015 |
|
|
|
|
2015 % Change (vs
2014) |
|
Low |
High |
|
|
|
Defense Markets |
|
|
Aerospace |
2% |
6% |
Ground |
13% |
17% |
Navy |
(2%) |
2% |
Total Defense (Including Other
Defense) |
2% |
4% |
|
|
|
Commercial Markets |
|
|
Commercial Aerospace |
(6%) |
(2%) |
Power Generation |
(2%) |
2% |
General Industrial |
(8%) |
(4%) |
Total Commercial |
(5%) |
(3%) |
|
|
|
Total Curtiss-Wright
Sales |
(2%) |
0% |
|
|
|
Note: Full year amounts
may not add due to rounding |
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 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 our acquisitions, the successful sale of our
businesses held for sale, 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 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, 2014,
and subsequent reports filed with the Securities and Exchange
Commission.
This press release and additional information are available at
www.curtisswright.com.
CONTACT: Jim Ryan
(704) 869-4621
Jim.Ryan@curtisswright.com
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