CW Curtiss Wright Corp

Curtiss-Wright Corporation (NYSE: CW) reports financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights:

• Reported sales of $785 million, up 11%;
• Reported operating income of $129 million, operating margin of 16.4%, and diluted earnings per share (EPS) of $2.58;
• Adjusted operating income of $133 million, up 16%;
• Adjusted operating margin of 17.0%, up 60 basis points;
• Adjusted diluted EPS of $2.67, up 24%;
• New orders of $995 million, up 18%, reflected a book-to-bill of approximately 1.3x driven by strong demand within our Aerospace & Defense (A&D) markets;
• Backlog of $3.2 billion, up 13% year-to-date; and
• Free cash flow (FCF) of $100 million, generating 97% Adjusted FCF conversion.

Raised Full-Year 2024 Adjusted Financial Guidance:

• Sales increased to new range of 6% to 8% growth (previously 5% to 7%), driven by strong growth in our A&D markets;
• Operating income increased to new range of 6% to 9% growth (previously 5% to 8%);
• Maintained operating margin range of 17.4% to 17.6%, flat to up 20 basis points compared with the prior year;
• Diluted EPS increased to new range of $10.40 to $10.65, up 11% to 14% (previously $10.10 to $10.40, up 8% to 11%);
• Reduced effective tax rate by 100 bps to 22.5% following consolidation of U.K. legal entity structure, and
• Free cash flow increased to new range of $425 to $445 million, up 3% to 8% (previously $415 to $435 million, up 0% to 5%), and continues to reflect greater than 105% FCF conversion.

"Curtiss-Wright delivered strong second quarter results, highlighted by mid-teens revenue growth in our A&D end markets, continued operating margin expansion, and 24% growth in Adjusted diluted EPS," said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. "We once again demonstrated robust order activity, as bookings increased 18% year over year, yielding a book-to-bill of 1.3x. Based on the strong first half results and our outlook for the remainder of 2024, we have increased our full-year Adjusted guidance for sales, operating income, diluted EPS and free cash flow."

"As we discussed at our Investor Day event in May, we continue to build momentum through the execution of our Pivot to Growth strategy. We remain focused on accelerating operational excellence to drive margin expansion and generate funding to reinvest into the business. As part of this strategy, we recently launched restructuring actions to support volume increases, improve efficiencies and further optimize our operations. These actions are expected to produce both recurring operational savings and increased free cash flow."

2024 Restructuring Program and Other Cost Savings Initiatives

• During the second quarter of 2024, the Company initiated restructuring actions across all three segments, principally within the Aerospace & Industrial segment. These initiatives are expected to result in approximately $15 million in restructuring costs in 2024, and are expected to yield initial savings in 2024, as well as approximately $10 million in annualized savings in 2025; and
• Curtiss-Wright launched a U.K. legal entity consolidation program anticipated to facilitate more efficient cash repatriation. This initiative is expected to generate approximately $5 million in annualized savings, based on a 100 basis point reduction in the effective tax rate, and approximately $5 million in annual recurring free cash flow.

Acquisition of Ultra Energy

• On June 3, 2024, the Company announced the acquisition of Ultra Nuclear Limited and Weed Instrument Co., Inc. (“Ultra Energy”) for $200 million in cash.
• Ultra Energy is a leading global provider of safety-critical monitoring systems, temperature and pressure sensors, and reactor protection and control systems principally to the commercial nuclear and A&D markets;
• The business is expected to be accretive to Curtiss-Wright's adjusted diluted earnings per share in its first full year of ownership, excluding first year purchase accounting costs, and produce a free cash flow conversion rate in excess of 100%; and
• The acquisition is expected to close in the third quarter of 2024, subject to U.K. regulatory approval, and the acquired business will operate within Curtiss-Wright's Naval & Power segment.

Second Quarter 2024 Operating Results

(In millions)

Q2-2024

Q2-2023

Change

Reported

 

 

 

Sales

$

785

 

$

704

 

11

%

Operating income

$

129

 

$

113

 

14

%

Operating margin

 

16.4

%

 

16.0

%

40 bps

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

785

 

$

704

 

11

%

Operating income

$

133

 

$

115

 

16

%

Operating margin

 

17.0

%

 

16.4

%

60 bps

(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $785 million increased 11% compared with the prior year period;
• Total A&D market sales increased 16%, while total Commercial market sales increased 2%;
• In our A&D markets, we experienced strong growth in the defense markets principally driven by strong demand for our defense electronics products and the timing of production ramps in naval defense, as well as higher OEM sales in the commercial aerospace market;
• In our Commercial markets, we experienced solid growth in the power & process markets, principally driven by higher sales of our commercial nuclear products, while sales in the general industrial market declined modestly; and
• Adjusted operating income of $133 million increased 16%, while Adjusted operating margin increased 60 basis points to 17.0%, principally driven by favorable overhead absorption on higher revenues in all three segments and favorable mix in the Defense Electronics segment, partially offset by unfavorable mix and timing of development programs in the Naval & Power segment.

Second Quarter 2024 Segment Performance

Aerospace & Industrial

(In millions)

Q2-2024

Q2-2023

Change

Reported

 

 

 

Sales

$

233

 

$

226

 

3

%

Operating income

$

35

 

$

36

 

(1

%)

Operating margin

 

15.1

%

 

15.8

%

(70 bps)

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

233

 

$

226

 

3

%

Operating income

$

38

 

$

36

 

6

%

Operating margin

 

16.2

%

 

15.8

%

40 bps

(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $233 million, up $7 million, or 3%;
• Commercial aerospace market revenue increases reflected strong demand and higher OEM sales of sensors and actuation products, as well as surface treatment services, on narrowbody and widebody platforms;
• General industrial market revenues declined modestly, as the benefit of higher sales of surface treatment services was more than offset by reduced sales of industrial vehicle products to off-highway vehicle platforms; and
• Adjusted operating income was $38 million, up 6% from the prior year, while adjusted operating margin increased 40 basis points to 16.2%, mainly due to solid absorption on higher sales and the initial benefits of our restructuring initiatives.

Defense Electronics

(In millions)

Q2-2024

Q2-2023

Change

Reported

 

 

 

Sales

$

228

 

$

198

 

16

%

Operating income

$

58

 

$

43

 

35

%

Operating margin

 

25.5

%

 

21.8

%

370 bps

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

228

 

$

198

 

16

%

Operating income

$

59

 

$

43

 

36

%

Operating margin

 

25.7

%

 

21.8

%

390 bps

(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $228 million, up $31 million, or 16%;
• Higher revenue in the aerospace defense market was principally driven by increased sales of our embedded computing equipment on various domestic and international helicopter programs;
• Strong revenue growth in the ground defense market primarily reflected higher sales of tactical battlefield communications equipment; and
• Adjusted operating income was $59 million, up 36% from the prior year, while adjusted operating margin increased 390 basis points to 25.7%, reflecting favorable absorption and mix on higher revenues, and the benefits of our cost containment initiatives.

Naval & Power

(In millions)

Q2-2024

Q2-2023

Change

Reported

 

 

 

Sales

$

323

 

$

280

 

15

%

Operating income

$

46

 

$

47

 

(1

%)

Operating margin

 

14.3

%

 

16.7

%

(240 bps)

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

323

 

$

280

 

15

%

Operating income

$

47

 

$

49

 

(6

%)

Operating margin

 

14.4

%

 

17.6

%

(320 bps)

(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $323 million, up $43 million, or 15%;
• Strong revenue growth in the naval defense market principally reflected higher demand on various submarine programs and the CVN-81 aircraft carrier program;
• Higher revenue in the aerospace defense market was primarily driven by increased sales of our arresting systems equipment supporting various domestic and international customers;
• Higher power & process market revenues mainly reflected increased commercial nuclear aftermarket sales supporting the maintenance of U.S. operating reactors; and
• Adjusted operating income was $47 million, down 6% from the prior year, while adjusted operating margin decreased 320 basis points to 14.4%, as favorable absorption on higher revenues was more than offset by unfavorable mix of products and timing of development programs.

Free Cash Flow

(In millions)

Q2-2024

Q2-2023

Change

Net cash provided by operating activities

$

111

 

$

111

 

—

%

Capital expenditures

 

(11

)

 

(12

)

(8

%)

Reported free cash flow

$

100

 

$

99

 

1

%

Adjusted free cash flow (1)

$

100

 

$

99

 

1

%

(1) A reconciliation of Reported to Adjusted free cash flow is available in the Appendix.

• Reported free cash flow of $100 million increased slightly as higher cash earnings were essentially offset by the timing of tax payments and working capital;
• Adjusted free cash flow of $100 million; and
• Capital expenditures decreased $1 million compared with the prior year.

New Orders and Backlog

• New orders of $995 million increased 18% compared with the prior year and generated an overall book-to-bill of approximately 1.3x, principally driven by strong demand for naval defense and commercial aerospace products within our A&D markets; and
• Backlog of $3.2 billion, up 13% from December 31, 2023, reflects strong demand in both our A&D and Commercial markets.

Share Repurchase and Dividends

• During the second quarter, the Company repurchased 47,174 shares of its common stock for approximately $13 million; and
• The Company also declared a quarterly dividend of $0.21 a share, an increase of 5% from the previous quarter.

Full-Year 2024 Guidance

The Company is updating its full-year 2024 Adjusted financial guidance(1) as follows:

($ in millions, except EPS)

2024 Adjusted

Non-GAAP Guidance

(Prior)

2024 Adjusted

Non-GAAP Guidance

(Current)

Change vs 2023 Adjusted

(Current)

Total Sales

$2,985 - $3,035

$3,010 - $3,060

Up 6% - 8%

Operating Income

$518 - $533

$525 - $539

Up 6% - 9%

Operating Margin

17.4% - 17.6%

17.4% - 17.6%

Up 0 - 20 bps

Diluted EPS

$10.10 - $10.40

$10.40 - $10.65

Up 11% - 14%

Free Cash Flow

$415 - $435

$425 - $445

Up 3% - 8%

(1) Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix.

**********

A more detailed breakdown of the Company’s 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted Non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright’s website.

Conference Call & Webcast Information

The Company will host a conference call to discuss its second quarter 2024 financial results and updates to 2024 guidance at 10:00 a.m. ET on Thursday, August 8, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast 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

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

($'s in thousands, except per share data)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Product sales

$

661,407

 

 

$

583,036

 

 

$

1,257,111

 

 

$

1,107,917

 

Service sales

 

123,384

 

 

 

121,360

 

 

 

240,847

 

 

 

227,339

 

Total net sales

 

784,791

 

 

 

704,396

 

 

 

1,497,958

 

 

 

1,335,256

 

 

 

 

 

 

 

 

 

Cost of product sales

 

428,926

 

 

 

369,549

 

 

 

818,403

 

 

 

713,306

 

Cost of service sales

 

71,764

 

 

 

75,274

 

 

 

141,699

 

 

 

140,969

 

Total cost of sales

 

500,690

 

 

 

444,823

 

 

 

960,102

 

 

 

854,275

 

 

 

 

 

 

 

 

 

Gross profit

 

284,101

 

 

 

259,573

 

 

 

537,856

 

 

 

480,981

 

 

 

 

 

 

 

 

 

Research and development expenses

 

22,152

 

 

 

20,210

 

 

 

45,132

 

 

 

42,234

 

Selling expenses

 

35,126

 

 

 

34,273

 

 

 

71,891

 

 

 

66,698

 

General and administrative expenses

 

95,008

 

 

 

92,315

 

 

 

189,057

 

 

 

180,659

 

Restructuring expenses

 

2,918

 

 

 

—

 

 

 

2,918

 

 

 

—

 

 

 

 

 

 

 

 

 

Operating income

 

128,897

 

 

 

112,775

 

 

 

228,858

 

 

 

191,390

 

 

 

 

 

 

 

 

 

Interest expense

 

11,216

 

 

 

14,992

 

 

 

21,786

 

 

 

27,936

 

Other income, net

 

8,560

 

 

 

7,954

 

 

 

18,168

 

 

 

15,721

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

126,241

 

 

 

105,737

 

 

 

225,240

 

 

 

179,175

 

Provision for income taxes

 

(26,770

)

 

 

(24,738

)

 

 

(49,274

)

 

 

(41,330

)

Net earnings

$

99,471

 

 

$

80,999

 

 

$

175,966

 

 

$

137,845

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

Basic earnings per share

$

2.60

 

 

$

2.11

 

 

$

4.60

 

 

$

3.60

 

Diluted earnings per share

$

2.58

 

 

$

2.10

 

 

$

4.58

 

 

$

3.58

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.21

 

 

$

0.20

 

 

$

0.41

 

 

$

0.39

 

 

 

 

 

 

 

 

 

Weighted-average shares outstanding:

 

 

 

 

 

 

 

Basic

 

38,302

 

 

 

38,329

 

 

 

38,273

 

 

 

38,309

 

Diluted

 

38,501

 

 

 

38,555

 

 

 

38,460

 

 

 

38,528

 

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($'s in thousands, except par value)

 

 

 

 

 

June 30,

 

December 31,

 

 

2024

 

 

 

2023

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

382,564

 

 

$

406,867

 

Receivables, net

 

817,135

 

 

 

732,678

 

Inventories, net

 

559,142

 

 

 

510,033

 

Other current assets

 

77,039

 

 

 

67,502

 

Total current assets

 

1,835,880

 

 

 

1,717,080

 

Property, plant, and equipment, net

 

326,969

 

 

 

332,796

 

Goodwill

 

1,571,004

 

 

 

1,558,826

 

Other intangible assets, net

 

545,448

 

 

 

557,612

 

Operating lease right-of-use assets, net

 

146,956

 

 

 

141,435

 

Prepaid pension asset

 

272,857

 

 

 

261,869

 

Other assets

 

49,080

 

 

 

51,351

 

Total assets

$

4,748,194

 

 

$

4,620,969

 

 

 

 

 

Liabilities

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

90,000

 

 

$

—

 

Accounts payable

 

224,778

 

 

 

243,833

 

Accrued expenses

 

158,505

 

 

 

188,039

 

Deferred revenue

 

341,601

 

 

 

303,872

 

Other current liabilities

 

81,632

 

 

 

70,800

 

Total current liabilities

 

896,516

 

 

 

806,544

 

Long-term debt

 

959,655

 

 

 

1,050,362

 

Deferred tax liabilities, net

 

128,277

 

 

 

132,319

 

Accrued pension and other postretirement benefit costs

 

67,650

 

 

 

66,875

 

Long-term operating lease liability

 

123,586

 

 

 

118,611

 

Long-term portion of environmental reserves

 

14,157

 

 

 

12,784

 

Other liabilities

 

99,933

 

 

 

105,061

 

Total liabilities

$

2,289,774

 

 

$

2,292,556

 

 

 

 

 

Stockholders' equity

 

 

 

Common stock, $1 par value

$

49,187

 

 

$

49,187

 

Additional paid in capital

 

135,574

 

 

 

140,182

 

Retained earnings

 

3,648,005

 

 

 

3,487,751

 

Accumulated other comprehensive loss

 

(233,488

)

 

 

(213,223

)

Less: cost of treasury stock

 

(1,140,858

)

 

 

(1,135,484

)

Total stockholders' equity

$

2,458,420

 

 

$

2,328,413

 

 

 

 

 

Total liabilities and stockholders' equity

$

4,748,194

 

 

$

4,620,969

 

Use and Definitions 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 Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. 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. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.

The following definitions are provided:

Adjusted Sales, Operating Income, Operating Margin, Net Earnings and Diluted EPS

These Adjusted financials are defined as Reported Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) costs associated with the Company's 2024 Restructuring Program; and (iii) the sale or divestiture of a business or product line, as applicable.

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

 

 

June 30, 2024

 

June 30, 2023

 

% Change

 

As Reported

 

Adjustments

 

Adjusted

 

As Reported

 

Adjustments

 

Adjusted

 

As Reported

 

Adjusted

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

233,232

 

 

$

—

 

$

233,232

 

 

$

226,260

 

 

$

—

 

$

226,260

 

 

3

%

 

3

%

Defense Electronics

 

228,461

 

 

 

—

 

 

 

228,461

 

 

 

197,722

 

 

 

—

 

 

 

197,722

 

 

16

%

 

16

%

Naval & Power

 

323,098

 

 

 

—

 

 

 

323,098

 

 

 

280,414

 

 

 

—

 

 

 

280,414

 

 

15

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

784,791

 

 

$

—

 

 

$

784,791

 

 

$

704,396

 

 

$

—

 

 

$

704,396

 

 

11

%

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial(2)

$

35,246

 

 

$

2,619

 

 

$

37,865

 

 

$

35,665

 

 

$

—

 

 

$

35,665

 

 

(1

)%

 

6

%

Defense Electronics(2)

 

58,244

 

 

 

523

 

 

 

58,767

 

 

 

43,180

 

 

 

—

 

 

 

43,180

 

 

35

%

 

36

%

Naval & Power(1)(2)

 

46,283

 

 

 

342

 

 

 

46,625

 

 

 

46,782

 

 

 

2,659

 

 

 

49,441

 

 

(1

)%

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segments

$

139,773

 

 

$

3,484

 

 

$

143,257

 

 

$

125,627

 

 

$

2,659

 

 

$

128,286

 

 

11

%

 

12

%

Corporate and other(2)

 

(10,876

)

 

 

964

 

 

 

(9,912

)

 

 

(12,852

)

 

 

—

 

 

 

(12,852

)

 

15

%

 

23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating income

$

128,897

 

 

$

4,448

 

 

$

133,345

 

 

$

112,775

 

 

$

2,659

 

 

$

115,434

 

 

14

%

 

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

As Reported

 

 

 

Adjusted

 

As Reported

 

 

 

Adjusted

 

As Reported

 

Adjusted

Aerospace & Industrial

 

15.1

%

 

 

 

 

16.2

%

 

 

15.8

%

 

 

 

 

15.8

%

 

(70 bps)

 

40 bps

Defense Electronics

 

25.5

%

 

 

 

 

25.7

%

 

 

21.8

%

 

 

 

 

21.8

%

 

370 bps

 

390 bps

Naval & Power

 

14.3

%

 

 

 

 

14.4

%

 

 

16.7

%

 

 

 

 

17.6

%

 

(240 bps)

 

(320 bps)

Total Curtiss-Wright

 

16.4

%

 

 

 

 

17.0

%

 

 

16.0

%

 

 

 

 

16.4

%

 

40 bps

 

60 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment margins

 

17.8

%

 

 

 

 

18.3

%

 

 

17.8

%

 

 

 

 

18.2

%

 

— bps

 

10 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes first year purchase accounting adjustments in both the current and prior year periods.

(2) Excludes costs associated with the Company's 2024 Restructuring Program in the current period.

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

Six Months Ended

 

 

 

 

 

June 30, 2024

 

June 30, 2023

 

% Change

 

As Reported

 

Adjustments

 

Adjusted

 

As Reported

 

Adjustments

 

Adjusted

 

As Reported

 

Adjusted

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

452,557

 

 

$

—

 

$

452,557

 

 

$

428,707

 

 

$

—

 

$

428,707

 

 

6

%

 

6

%

Defense Electronics

 

440,202

 

 

 

—

 

 

 

440,202

 

 

 

359,876

 

 

 

—

 

 

 

359,876

 

 

22

%

 

22

%

Naval & Power

 

605,199

 

 

 

—

 

 

 

605,199

 

 

 

546,673

 

 

 

—

 

 

 

546,673

 

 

11

%

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

1,497,958

 

 

$

—

 

 

$

1,497,958

 

 

$

1,335,256

 

 

$

—

 

 

$

1,335,256

 

 

12

%

 

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial(2)

$

62,712

 

 

$

2,619

 

 

$

65,331

 

 

$

62,210

 

 

$

—

 

 

$

62,210

 

 

1

%

 

5

%

Defense Electronics(2)

 

106,325

 

 

 

523

 

 

 

106,848

 

 

 

66,548

 

 

 

—

 

 

 

66,548

 

 

60

%

 

61

%

Naval & Power (1)(2)

 

81,474

 

 

 

342

 

 

 

81,816

 

 

 

84,719

 

 

 

5,335

 

 

 

90,054

 

 

(4

)%

 

(9

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segments

$

250,511

 

 

$

3,484

 

 

$

253,995

 

 

$

213,477

 

 

$

5,335

 

 

$

218,812

 

 

17

%

 

16

%

Corporate and other(2)

 

(21,653

)

 

 

964

 

 

 

(20,689

)

 

 

(22,087

)

 

 

—

 

 

 

(22,087

)

 

2

%

 

6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating income

$

228,858

 

 

$

4,448

 

 

$

233,306

 

 

$

191,390

 

 

$

5,335

 

 

$

196,725

 

 

20

%

 

19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

As Reported

 

 

 

Adjusted

 

As Reported

 

 

 

Adjusted

 

As Reported

 

Adjusted

Aerospace & Industrial

 

13.9

%

 

 

 

 

14.4

%

 

 

14.5

%

 

 

 

 

14.5

%

 

(60 bps)

 

(10 bps)

Defense Electronics

 

24.2

%

 

 

 

 

24.3

%

 

 

18.5

%

 

 

 

 

18.5

%

 

570 bps

 

580 bps

Naval & Power

 

13.5

%

 

 

 

 

13.5

%

 

 

15.5

%

 

 

 

 

16.5

%

 

(200 bps)

 

(300 bps)

Total Curtiss-Wright

 

15.3

%

 

 

 

 

15.6

%

 

 

14.3

%

 

 

 

 

14.7

%

 

100 bps

 

90 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment margins

 

16.7

%

 

 

 

 

17.0

%

 

 

16.0

%

 

 

 

 

16.4

%

 

70 bps

 

60 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes first year purchase accounting adjustments in both the current and prior year periods.

(2) Excludes costs associated with the Company's 2024 Restructuring Program in the current period.

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED SALES TO ADJUSTED SALES BY END MARKET (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

 

 

June 30, 2024

 

June 30, 2023

 

% Change

 

 

As Reported

 

Adjustments

 

Adjusted Sales

 

As Reported

 

Adjustments

 

Adjusted Sales

 

Change in As Reported Sales

Change in Adjusted Sales

Aerospace & Defense markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace Defense

 

$

154,104

 

$

—

 

$

154,104

 

$

132,192

 

$

—

 

$

132,192

 

17

%

17

%

Ground Defense

 

 

84,939

 

 

 

—

 

 

 

84,939

 

 

 

70,875

 

 

 

—

 

 

 

70,875

 

 

20

%

20

%

Naval Defense

 

 

209,847

 

 

 

—

 

 

 

209,847

 

 

 

180,956

 

 

 

—

 

 

 

180,956

 

 

16

%

16

%

Commercial Aerospace

 

 

93,316

 

 

 

—

 

 

 

93,316

 

 

 

82,033

 

 

 

—

 

 

 

82,033

 

 

14

%

14

%

Total Aerospace & Defense

 

$

542,206

 

 

$

—

 

 

$

542,206

 

 

$

466,056

 

 

$

—

 

 

$

466,056

 

 

16

%

16

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power & Process

 

$

138,601

 

 

$

—

 

 

$

138,601

 

 

$

131,000

 

 

$

—

 

 

$

131,000

 

 

6

%

6

%

General Industrial

 

 

103,984

 

 

 

—

 

 

 

103,984

 

 

 

107,340

 

 

 

—

 

 

 

107,340

 

 

(3

%)

(3

%)

Total Commercial

 

$

242,585

 

 

$

—

 

 

$

242,585

 

 

$

238,340

 

 

$

—

 

 

$

238,340

 

 

2

%

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Curtiss-Wright

 

$

784,791

 

 

$

—

 

 

$

784,791

 

 

$

704,396

 

 

$

—

 

 

$

704,396

 

 

11

%

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

Six Months Ended

 

 

 

 

 

June 30, 2024

 

June 30, 2023

 

% Change

 

 

As Reported

 

Adjustments

 

Adjusted Sales

 

As Reported

 

Adjustments

 

Adjusted Sales

 

Change in As Reported Sales

Change in Adjusted Sales

Aerospace & Defense markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace Defense

 

$

286,178

 

 

$

—

 

 

$

286,178

 

 

$

232,071

 

 

$

—

 

 

$

232,071

 

 

23

%

23

%

Ground Defense

 

 

175,700

 

 

 

—

 

 

 

175,700

 

 

 

137,132

 

 

 

—

 

 

 

137,132

 

 

28

%

28

%

Naval Defense

 

 

387,494

 

 

 

—

 

 

 

387,494

 

 

 

352,912

 

 

 

—

 

 

 

352,912

 

 

10

%

10

%

Commercial Aerospace

 

 

183,091

 

 

 

—

 

 

 

183,091

 

 

 

152,523

 

 

 

—

 

 

 

152,523

 

 

20

%

20

%

Total Aerospace & Defense

 

$

1,032,463

 

 

$

—

 

 

$

1,032,463

 

 

$

874,638

 

 

$

—

 

 

$

874,638

 

 

18

%

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power & Process

 

$

262,639

 

 

$

—

 

 

$

262,639

 

 

$

251,338

 

 

$

—

 

 

$

251,338

 

 

4

%

4

%

General Industrial

 

 

202,856

 

 

 

—

 

 

 

202,856

 

 

 

209,280

 

 

 

—

 

 

 

209,280

 

 

(3

%)

(3

%)

Total Commercial

 

$

465,495

 

 

$

—

 

 

$

465,495

 

 

$

460,618

 

 

$

—

 

 

$

460,618

 

 

1

%

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Curtiss-Wright

 

$

1,497,958

 

 

$

—

 

 

$

1,497,958

 

 

$

1,335,256

 

 

$

—

 

 

$

1,335,256

 

 

12

%

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Diluted earnings per share - As Reported

$

2.58

 

$

2.10

 

$

4.58

 

$

3.58

First year purchase accounting adjustments

 

—

 

 

 

0.05

 

 

 

—

 

 

 

0.10

 

Restructuring costs

 

0.09

 

 

 

—

 

 

 

0.09

 

 

 

—

 

Diluted earnings per share - Adjusted (1)

$

2.67

 

 

$

2.15

 

 

$

4.67

 

 

$

3.68

 

 

 

 

 

 

 

 

 

(1) All adjustments are presented net of income taxes.

Organic Sales and Organic Operating Income

The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income, excluding contributions from acquisitions and results of operations from divested businesses or product lines during the last twelve months, costs associated with the Company's 2024 Restructuring Program, and foreign currency fluctuations.

 

Three Months Ended

 

June 30,

 

2024 vs. 2023

 

Aerospace & Industrial

 

Defense Electronics

 

Naval & Power

 

Total Curtiss-Wright

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

As Reported

3%

 

(1%)

 

16%

 

35%

 

15%

 

(1%)

 

11%

 

14%

Less: Acquisitions

0%

 

0%

 

0%

 

0%

 

(1%)

 

1%

 

0%

 

1%

Restructuring

0%

 

7%

 

0%

 

1%

 

0%

 

0%

 

0%

 

4%

Foreign Currency

0%

 

0%

 

0%

 

0%

 

0%

 

0%

 

0%

 

(1%)

Organic

3%

 

6%

 

16%

 

36%

 

14%

 

0%

 

11%

 

18%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

June 30,

 

2024 vs. 2023

 

Aerospace & Industrial

 

Defense Electronics

 

Naval & Power

 

Total Curtiss-Wright

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

As Reported

6%

 

1%

 

22%

 

60%

 

11%

 

(4%)

 

12%

 

20%

Less: Acquisitions

0%

 

0%

 

0%

 

0%

 

(1%)

 

1%

 

0%

 

0%

Restructuring

0%

 

4%

 

0%

 

0%

 

0%

 

0%

 

0%

 

2%

Foreign Currency

(1%)

 

1%

 

0%

 

0%

 

0%

 

0%

 

0%

 

0%

Organic

5%

 

6%

 

22%

 

60%

 

10%

 

(3%)

 

12%

 

22%

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 net cash provided by operating activities less capital expenditures. Adjusted free cash flow excludes payments associated with the Westinghouse legal settlement in the prior year period. The Corporation discloses adjusted free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as adjusted free cash flow divided by adjusted net earnings.

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NON-GAAP FINANCIAL DATA (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

 

2024

 

 

 

2023

 

 

 

2024

 

 

 

2023

 

Net cash provided by operating activities

$

111,335

 

 

$

110,952

 

 

$

65,702

 

 

$

19,353

 

Capital expenditures

 

(11,064

)

 

 

(12,003

)

 

 

(23,119

)

 

 

(22,664

)

Free cash flow

$

100,271

 

 

$

98,949

 

 

$

42,583

 

 

$

(3,311

)

Westinghouse legal settlement

 

—

 

 

 

—

 

 

 

—

 

 

 

10,000

 

Adjusted free cash flow

$

100,271

 

 

$

98,949

 

 

$

42,583

 

 

$

6,689

 

Adjusted free cash flow conversion

 

97

%

 

 

119

%

 

 

24

%

 

 

5

%

 

CURTISS-WRIGHT CORPORATION

2024 Guidance

As of August 7, 2024

($'s in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2023

 

2023

 

 

 

2024

 

 

2023

 

Adjustments

 

Adjusted

 

2024

 

Adjustments

 

2024

Reported

 

(Non-

 

(Non-

 

Reported Guidance

 

(Non-

 

Adjusted Guidance

(GAAP)

 

GAAP)(1,2)

 

GAAP)(1,2)

 

(GAAP)

 

GAAP)(3)

 

(Non-GAAP)(3)

 

 

 

 

 

 

 

Low

 

High

 

 

 

Low

 

High

 

2024 Chg

vs 2023

Adjusted

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

887

 

 

$

—

 

 

$

887

 

 

$

925

 

$

940

 

 

$

—

 

 

$

925

 

$

940

 

 

4 - 6%

Defense Electronics

 

816

 

 

 

—

 

 

 

816

 

 

 

882

 

 

897

 

 

 

—

 

 

 

882

 

 

897

 

 

8 -10%

Naval & Power

 

1,142

 

 

 

—

 

 

 

1,142

 

 

 

1,203

 

 

1,223

 

 

 

—

 

 

 

1,203

 

 

1,223

 

 

5 -7%

Total sales

$

2,845

 

 

$

—

 

 

$

2,845

 

 

$

3,010

 

$

3,060

 

 

$

—

 

 

$

3,010

 

$

3,060

 

 

6 - 8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

145

 

 

$

—

 

 

$

145

 

 

$

147

 

$

151

 

 

$

10

 

 

$

157

 

$

161

 

 

8 - 11%

Defense Electronics

 

192

 

 

 

—

 

 

 

192

 

 

 

209

 

 

215

 

 

 

3

 

 

 

212

 

 

218

 

 

11 - 13%

Naval & Power

 

189

 

 

 

9

 

 

 

198

 

 

 

194

 

 

199

 

 

 

—

 

 

 

194

 

 

199

 

 

(2) - 0%

Total segments

 

526

 

 

 

9

 

 

 

535

 

 

 

550

 

 

565

 

 

 

13

 

 

 

562

 

 

578

 

 

 

Corporate and other

 

(42

)

 

 

—

 

 

 

(42

)

 

 

(40

)

 

(41

)

 

 

2

 

 

 

(38

)

 

(39

)

 

 

Total operating income

$

485

 

 

$

9

 

 

$

494

 

 

$

510

 

$

524

 

 

$

15

 

 

$

525

 

$

539

 

 

6 - 9%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

$

(51

)

 

$

—

 

 

$

(51

)

 

$

(44

)

$

(45

)

 

$

—

 

 

$

(44

)

$

(45

)

 

 

Other income, net

 

30

 

 

 

—

 

 

 

30

 

 

 

35

 

 

35

 

 

 

—

 

 

 

35

 

 

35

 

 

 

Earnings before income taxes

 

463

 

 

 

9

 

 

 

472

 

 

 

501

 

 

514

 

 

 

15

 

 

 

516

 

 

529

 

 

 

Provision for income taxes

 

(109

)

 

 

(2

)

 

 

(111

)

 

 

(113

)

 

(116

)

 

 

(3

)

 

 

(116

)

 

(119

)

 

 

Net earnings

$

355

 

 

$

6

 

 

$

361

 

 

$

388

 

$

398

 

 

$

12

 

 

$

400

 

$

410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

9.20

 

 

$

0.18

 

 

$

9.38

 

 

$

10.09

 

$

10.34

 

 

$

0.31

 

 

$

10.40

 

$

10.65

 

 

11 - 14%

Diluted shares outstanding

 

38.5

 

 

 

 

 

38.5

 

 

 

38.5

 

 

38.5

 

 

 

 

 

38.5

 

 

38.5

 

 

 

Effective tax rate

 

23.4

%

 

 

 

 

23.4

%

 

 

22.5

%

 

22.5

%

 

 

 

 

22.5

%

 

22.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

 

16.4

%

 

 

 

 

16.4

%

 

 

15.9

%

 

16.1

%

 

 

 

 

16.9

%

 

17.1

%

 

50 to 70 bps

Defense Electronics

 

23.5

%

 

 

 

 

23.5

%

 

 

23.7

%

 

24.0

%

 

 

 

 

24.0

%

 

24.2

%

 

50 to 70 bps

Naval & Power

 

16.6

%

 

 

 

 

17.4

%

 

 

16.1

%

 

16.3

%

 

 

 

 

16.1

%

 

16.3

%

 

(110 to 130 bps)

Total operating margin

 

17.0

%

 

 

 

 

17.4

%

 

 

16.9

%

 

17.1

%

 

 

 

 

17.4

%

 

17.6

%

 

0 to 20 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow

$

403

 

 

$

10

 

 

$

413

 

 

$

425

 

$

445

 

 

$

—

 

 

$

425

 

$

445

 

 

3 - 8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes: Full year amounts may not add due to rounding.

(1) 2023 Adjusted financials exclude the impact of first year purchase accounting adjustments.

(2) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2023 Adjusted Free Cash Flow excluded a legal settlement payment of $10 million.

(3) 2024 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding costs associated with the Company's 2024 Restructuring Program and the impact of first year purchase accounting adjustments.

 

CURTISS-WRIGHT CORPORATION

2024 Sales Growth Guidance by End Market

As of August 7, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024 % Change vs. 2023 Adjusted

 

 

 

 

 

 

 

 

 

Prior

 

Current

 

% Total Sales

Aerospace & Defense Markets

 

 

 

 

 

Aerospace Defense

6 - 8%

 

7 - 9%

 

20%

Ground Defense

10 - 12%

 

10 - 12%

 

11%

Naval Defense

3 - 5%

 

5 - 7%

 

25%

Commercial Aerospace

10 - 12%

 

13 - 15%

 

12%

Total Aerospace & Defense

6 - 8%

 

8 - 10%

 

68%

 

 

 

 

 

 

Commercial Markets

 

 

 

 

 

Power & Process

4 - 6%

 

4 - 6%

 

18%

General Industrial

1 - 3%

 

Flat

 

14%

Total Commercial

2 - 4%

 

1 - 3%

 

32%

 

 

 

 

 

 

Total Curtiss-Wright Sales

5 - 7%

 

6 - 8%

 

100%

 

 

 

 

 

 

Note: Sales percentages may not add due to rounding.

 

 

 

 

 

About Curtiss-Wright Corporation

Curtiss-Wright Corporation (NYSE:CW) is a global integrated business that provides highly engineered products, solutions and services mainly to Aerospace & Defense markets, as well as critical technologies in demanding Commercial Power, Process and Industrial markets. We leverage a workforce of approximately 8,600 highly skilled employees who develop, design and build what we believe are the best engineered solutions to the markets we serve. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing innovative solutions through trusted customer relationships. 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, 2023, 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/20240807390005/en/

Jim Ryan (704) 869-4621 Jim.Ryan@curtisswright.com