-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, oEu06AxbydKAC1BrW1ng+la+QDZz3M2ITxJac5uivpu/n9Yf+KvoSZHY4j0WNqEJ S9lCY6PpR4ozF7lWjhMpgw== 0000026324-94-000024.txt : 19941116 0000026324-94-000024.hdr.sgml : 19941116 ACCESSION NUMBER: 0000026324-94-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CURTISS WRIGHT CORP CENTRAL INDEX KEY: 0000026324 STANDARD INDUSTRIAL CLASSIFICATION: 3390 IRS NUMBER: 130612970 STATE OF INCORPORATION: DE FISCAL YEAR END: 0329 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00134 FILM NUMBER: 94559305 BUSINESS ADDRESS: STREET 1: 1200 WALL ST W CITY: LYNDHURST STATE: NJ ZIP: 07071 BUSINESS PHONE: 2018968400 MAIL ADDRESS: STREET 2: 1200 WALL ST W CITY: LYNDHURST STATE: NJ ZIP: 07071 10-Q 1 FORM 10-Q - ENDING 09/30/94 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1994 Commission File Number 1-134 CURTISS-WRIGHT CORPORATION (Exact name of Registrant as specified in its charter) Delaware 13-0612970 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1200 Wall Street West Lyndhurst, New Jersey 07071 (Address of principal executive offices) (Zip Code) (201) 896-8400 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, par value $1.00 per share: 5,059,053 shares (as of October 29, 1994) Page 1 of 15 CURTISS-WRIGHT CORPORATION AND SUBSIDIARIES TABLE OF CONTENTS PAGE PART I - FINANCIAL INFORMATION Item 1 - Financial Statements: Consolidated Balance Sheets 3 Consolidated Statements of Earnings 4 Consolidated Statements of Cash Flows 5 Consolidated Statements of Stockholders' Equity 6 Notes to Consolidated Financial Statements 7 - 9 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 13 PART II - OTHER INFORMATION Item 6 - Exhibits and Reports on Form 8-K 14 Page 2 of 15 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In thousands)
September 30, December 31, 1994 1993 Assets: --------- ---------- Cash and cash equivalents $ 5,208 $ 20,349 Short-term investments 71,969 54,811 Receivables, net 32,070 27,333 Income taxes refundable 255 Deferred tax asset 9,055 8,882 Inventories 24,171 22,455 Other current assets 1,722 2,142 --------- ---------- Total current assets 144,195 136,227 Property, plant and equipment, at cost 208,987 208,791 Less, accumulated depreciation 143,178 137,361 --------- ---------- Property, plant and equipment, net 65,809 71,430 Prepaid pension costs 26,687 24,062 Other assets 5,290 5,228 --------- ---------- Total assets $241,981 $236,947 ========= ========== Liabilities: Current portion of long-term debt $ 1,391 $ 124 Accounts payable and accrued expenses 17,461 14,990 Dividends payable 1,264 Income taxes payable 1,927 Other current liabilities 18,292 28,401 --------- ---------- Total current liabilities 40,335 43,515 Long-term debt 13,047 14,426 Deferred income taxes 7,080 6,354 Accrued post retirement benefit costs 10,844 10,376 Other liabilities 15,738 18,045 --------- ---------- Total liabilities 87,044 92,716 Stockholders' equity: Common stock, $1 par value 10,000 10,000 Capital surplus 57,172 57,172 Retained earnings 271,115 261,356 Unearned portion of restricted stock (9) (87) Equity adj from foreign currency translation (993) (1,862) --------- ---------- Subtotal 337,285 326,579 Less, cost of treasury stock 182,348 182,348 --------- ---------- Total stockholders' equity 154,937 144,231 --------- ---------- Total liab & stockholders' equity $241,981 $236,947 ========= ========== See notes to consolidated financial statements.
Page 3 of 15 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS of EARNINGS (UNAUDITED) (In thousands except per share data)
Nine Months Ended Three Months Ended September 30, September 30, 1994 1993 1994 1993 Revenues: --------- --------- -------- -------- Sales $114,819 $117,932 $38,792 $36,296 Rentals & gains on sales of real estate & equipment 6,411 6,207 2,273 2,041 Interest, dividends and gains (losses) on sales of short- term investments, net 2,509 1,975 819 413 Other income, net 249 281 17 54 --------- --------- -------- -------- Total revenues 123,988 126,395 41,901 38,804 Cost and Expenses: Product and engineering 79,387 83,659 27,142 26,382 Selling and service 4,108 4,584 1,462 1,478 Administrative and general 19,464 20,907 6,477 6,669 Interest 274 430 93 108 --------- --------- -------- -------- Total costs and expenses 103,233 109,580 35,174 34,637 Earnings before taxes and cumu- lative effect of changes in accounting principles 20,755 16,815 6,727 4,167 Provision for income taxes 6,958 6,003 2,560 1,495 --------- --------- -------- -------- Earnings before cumulative effect of changes in account'g principles 13,797 10,812 4,167 2,672 Cumulative effect of changes in accounting principles (net of applicable taxes) (244) (2,671) --------- --------- -------- -------- Net earnings $ 13,553 $ 8,141 $ 4,167 $ 2,672 ========= ========= ======== ======== Weighted average number of common shares outstanding 5,061 5,061 5,061 5,061 Net earnings per common share: Earnings before cumulative effect of changes in accounting principles $2.73 $2.14 $ .82 $ .53 Cumulative effect of changes in accounting principles (.05) (.53) --------- --------- -------- -------- Net earnings per common share $2.68 $1.61 $ .82 $ .53 ========= ========= ======== ======== Dividends per common share $ .75 $ .75 $ .25 $ .25 ========= ========= ======== ======== See notes to consolidated financial statements.
Page 4 of 15 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS of CASH FLOWS (UNAUDITED) (In thousands)
Nine Months Ended September 30, --------------------- 1994 1993 Cash flows from operating activities: --------- --------- Net earnings $ 13,553 $ 8,141 Adjustments to reconcile net earnings to net cash provided by (used for) operating activities: Cumulative eff of changes in acctg principles 244 2,671 Depreciation and amortization 8,109 8,971 Net gains on sales of short-term investments (1,246) (171) Increase (decrease) in deferred taxes 684 (1,526) Changes in operating assets and liabilities: Proceeds from sales of trading securities 103,699 Purchases of trading securities (116,691) (Increase) decrease in receivables (7,155) 382 Increase in retainages (440) (Increase) decrease in inventory (2,847) 297 Increase (decrease) in progress payments 3,549 (2,351) Inc (dec) in accts payable & accrued expenses 922 (133) Increase (decrease) in income taxes payable 2,182 (2,323) Increase in other assets (2,267) (2,516) Increase (decrease) in other liabilities (4,814) 1,400 Litigation settlement (8,880) Other, net 1,003 289 Total adjustments (23,508) 4,550 --------- --------- Net cash provided by (used for) operat'g activities (9,955) 12,691 --------- --------- Cash flows from investing activities: Proceeds on sales of real estate and equipment 759 291 Additions to property, plant and equipment (3,303) (4,312) Proceeds from sales of short-term investments 364,970 Purchases of short-term investments (385,591) --------- --------- Net cash used by investing activities (2,544) (24,642) --------- --------- Cash flows from financing activities: Principal payments on long-term debt (112) (3,862) Dividends paid (2,530) (2,530) --------- --------- Net cash used by financing activities (2,642) (6,392) --------- --------- Net decrease in cash and cash equivalents (15,141) (18,343) Cash and cash equivalents at beginning of period 20,349 28,134 --------- --------- Cash and cash equivalents at end of period $ 5,208 $ 9,791 ========= ========= See notes to consolidated financial statements.
Page 5 of 15 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS of STOCKHOLDERS' EQUITY (UNAUDITED) (In thousands of dollars)
Equity Unearned Adjustments Common Stock Portion of from Foreign Shares Capital Retained Restricted Currency Treasury Stock Issued Amount Surplus Earnings Stock Translation Shares Amount ---------- ------- ------- -------- ------ -------- --------- --------- December 31, 1992 10,000,000 $10,000 $57,062 $272,038 $(317) $(1,231) 4,939,257 $182,348 Net earnings (loss) (5,623) Common dividends (5,059) Amortization of unearned portion of restricted stock 110 230 Translation ad- justments, net (631) ---------- ------- ------- -------- ------ -------- --------- --------- December 31, 1993 10,000,000 10,000 57,172 261,356 (87) (1,862) 4,939,257 182,348 Net earnings 13,553 Common dividends (3,794) Amortization of unearned portion of restricted stock 78 Translation ad- justment, net 869 ---------- ------- ------- -------- ------ -------- --------- --------- Sept. 30, 1994 10,000,000 $10,000 $57,172 $271,115 $ (9) $ (993) 4,939,257 $182,348 ========== ======= ======= ======== ====== ======== ========= ========= See notes to consolidated financial statements.
Page 6 of 15 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION The information furnished in this report reflects all adjustments, consisting primarily of normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Corporation's 1993 Annual Report to Stockholders. The results of operations for these interim periods are not necessarily indicative of the operating results for a full year. 2. CHANGES IN ACCOUNTING PRINCIPLES Effective January 1, 1994, Curtiss-Wright adopted Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits" (SFAS No. 112). This statement requires that provision be made for benefits for former or inactive employees, after employment but before retirement, such as salary continuation, severance benefits and disability-related items. Under the new accounting rules, the Corporation recorded a projected obligation for these benefits of $375,000. This obligation resulted in an after-tax charge to earnings for the first quarter of 1994 of $244,000 or $.05 per share. 3. SHORT-TERM INVESTMENTS Effective January 1, 1994, the Corporation began accounting for its short-term investments in accordance with Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (SFAS No. 115). This statement requires that the Corporation's investments in equity securities be classified as "trading securities" or "available for sale securities." The Corporation's short-term investments are comprised of marketable equity and non-equity securities, all classified as trading securities at September 30, 1994, under SFAS No. 115. Short term investments have an aggregate cost of $73,523,000 and an aggregate market value of $71,969,000 at September 30, 1994, compared to an aggregate cost of $54,811,000 and an aggregate market value of $54,869,000 at December 31, 1993. Included in the determination of net earnings were net realized gains on the sales of short-term investments, determined on the specific identification cost basis, totaling $2,800,000 and $206,000 for the first nine months of 1994 and 1993, respectively. Also included in the determination of net earnings were net unrealized holding losses on trading securities totaling $1,544,000 and $35,000 for the first nine months of 1994 and 1993, respectively. Page 7 of 15 4. RECEIVABLES Receivables, at September 30, 1994 and December 31, 1993, include amounts billed to customers and unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed at the dates presented. Substantially all amounts of unbilled receivables are expected to be billed and collected within a year. The composition of receivables for those periods is as follows:
(In thousands) ---------------------------- September 30, December 31, 1994 1993 -------- -------- Accounts receivable, billed $26,319 $25,004 Less: progress payments applied 2,460 4,108 -------- -------- 23,859 20,896 Unbilled charges on long-term contracts 26,282 20,265 Less: progress payments applied 17,001 12,935 -------- -------- 9,281 7,330 Allowance for doubtful accounts (1,070) (893) -------- -------- Receivables, net $32,070 $27,333 -------- --------
5. INVENTORIES Inventories are valued at the lower of cost (principally average cost) or market. The composition of inventories at September 30, 1994 and December 31, 1993 is as follows:
In thousands ---------------------------- September 30, December 31, 1994 1993 -------- -------- Raw material $ 4,740 $ 5,626 Work-in-process 11,490 7,905 Finished goods 1,666 2,385 Inventoried costs related to U.S. Gov't and other long-term contracts 10,091 9,224 -------- -------- Total inventories 27,987 25,140 Less: progress payments applied, principally related to long-term contracts 3,816 2,685 -------- -------- Net inventories $24,171 $22,455 ======== ========
Page 8 of 15 6. CONSOLIDATED STATEMENTS OF CASH FLOWS Interest payments totaling $305,000 and $440,000 were made primarily in association with long-term debt in the first nine months of 1994 and 1993, respectively. The Corporation made estimated federal income tax payments totaling $3,400,000 and $7,295,000 in the first nine months of 1994 and 1993, respectively. Cash flows from purchases and sales of trading securities have been classified as cash flows from operating activities for the first nine months of 1994, in accordance with SFAS No. 115. Cash flows from purchases and sales of short-term investments for the first nine months of 1993 are classified as investing activities. 7. EARNINGS PER SHARE Earnings per share were computed by dividing the applicable amount of earnings by the weighted average number of common shares outstanding during each period shown in the accompanying Consolidated Statements of Earnings. Page 9 of 15 PART I - ITEM 2 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS RESULTS OF OPERATIONS: Curtiss-Wright Corporation reported consolidated net earnings for the third quarter of 1994 totaling $4.2 million or $.82 per share, a 56% increase compared with net earnings of $2.7 million or $.53 per share reported in the third quarter of 1993. Excluding the effects of accounting changes in both years, net earnings for the first nine months of 1994 totaled $13.8 million or $2.73 per share, showing a 28% improvement over comparable period 1993 earnings of $10.8 million or $2.14 per share. Net earnings of both nine month periods were reduced by charges for required accounting changes which were recorded in the first quarter of each year. Net earnings for 1994 were reduced by $.2 million or $.05 per share for a change in accounting for postemployment benefits, while 1993 net earnings were reduced by $2.7 million or $.53 per share for the net effect of changes in accounting for postretirement benefits and income taxes. Overall, earnings before taxes and accounting changes increased for the third quarter and first nine months of 1994, as compared with the prior year's results, largely due to improvements in sales of shot peening, aerospace overhaul services and spare parts. Cost containment measures, reduced administrative expenses and the absence of environmental charges recorded in the nine month 1993 period were key factors in producing better 1994 results. Sales for the third quarter of 1994 totaled $38.8 million, a 7% improvement compared with sales of $36.3 million recorded in the third quarter of 1993. Sales for the first nine months of 1994 were slightly below sales totals of the same prior year period, totaling $114.8 million in the 1994 period compared with $117.9 million in the 1993 period. New orders declined for both the third quarter and nine month periods of 1994, totaling $29.0 million and $87.6 million, respectively, as compared with new orders of $40.0 million and $105.7 million received in the same respective periods of 1993. The decline in orders is largely attributable to a high level of engineering and manufacturing development orders received in 1993, as well as a general decline in new aerospace production programs. The backlog of unshipped orders for the Corporation totaled $122.0 million at September 30, 1994, compared to $139.8 million at September 30, 1993. Page 10 of 15 Segment Performance: Aggregate pre-tax operating income generated by the Corporation's three business segments improved in the third quarter of 1994, totaling $6.6 million, compared with operating income of $4.6 million for the third quarter of 1993. For the first nine months of 1994, segment operating income also surpassed the same period 1993 levels, totaling $20.0 million in 1994, compared with $18.2 million in 1993. The Corporation's Aerospace segment posted sales declines of 15% for the third quarter and 12% for the first nine months of 1994, respectively, when compared with those same period results of 1993. Sales totaled $19.3 million for the third quarter of 1994, compared with $22.6 million in the same quarter of 1993 and were $63.2 million for the first nine months of 1994, compared with $71.7 million in the same nine month period of 1993. The sales declines in both periods in comparison with the prior year primarily reflect lower volume and reduced pricing on actuation products for the F-16 military program, as well as lower production of actuation products for Boeing commercial transport aircraft. Sales of aerospace spare parts and overhaul services increased significantly for the nine month 1994 period over the nine month 1993 period, but did not offset the declines in sales on major aerospace production programs over the same periods. Pre-tax operating income for the Aerospace segment improved significantly in the third quarter of 1994 totaling $4.2 million, a 20% increase from the same period of 1993. The current improvements are largely due to cost containment efforts and increased sales of actuation spare parts and overhaul services. Operating income for this segment totaled $12.5 million in the first nine months of 1994, slightly below operating income of $12.7 million for the same nine month period of 1993. New orders recorded in both periods of 1994, however, are substantially below the order levels of the same respective periods of 1993. The decline in orders reflects a non-recurrence of the high level of engineering and manufacturing development orders for the F-22 program received in 1993 and a lack of new aerospace production programs to replace orders received in the prior year for the matured F-16 program. Sales for the Industrial segment totaled $12.8 million and $32.1 million for the third quarter and first nine months of 1994, respectively. Sales and operating income for both 1994 periods increased when compared with the results reported in the same respective periods of 1993. Improvements in the Industrial segment's performance were largely due to higher sales of shot peening and heat treating services to automotive industry customers and improved sales of industrial valves for other commercial customers. New orders received in the third quarter of 1994 were $12.9 million compared to orders of $8.2 million received in the third quarter of 1993. For the first nine months of 1994, new orders totaled $35.5 million compared to $27.9 million for the first nine months of 1993. The increases in sales and new orders for the 1994 periods are largely due to improved worldwide economic conditions which had hindered sales and orders for our shot peening and heat treating services in 1993. Page 11 of 15 Sales for the Flow Control and Marine segment totaled $6.7 million and $19.5 million for the third quarter and first nine month periods of 1994, respectively; both periods showing increases from sales of $4.9 million and $18.2 million recorded in the third quarter and first nine month periods of 1993. The improvements are primarily due to the progress achieved on long- term military valve contracts. Segment operating income for the third quarter continued at a level consistent with that of the first two quarters of 1994 and compared favorably to a small loss which was reported in the third quarter of 1993. New orders received by the Flow Control and Marine segment were $2.0 million for the third quarter of 1994 and total $7.0 million for the first nine month period. New order levels for both 1994 periods are well below the levels recorded in the same 1993 periods primarily due to valve production orders received in the prior year for use in the U.S. Navy's next aircraft carrier currently being built. The Flow Control and Marine segment has, however, received a $4.5 million contract in October 1994 to develop a series of new valves for the Navy's next generation of attack submarines. Other Revenues and Costs: Other revenue recorded by the Corporation improved over the prior year in both the third quarter and first nine month periods of 1994, totaling $3.1 million and $9.2 million, respectively, as compared with $2.5 million and $8.5 million recorded in the same respective periods of 1993. The increases in both periods primarily reflects higher overall investment income for 1994 as compared with 1993. Operating costs for the Corporation as a whole increased slightly for the third quarter primarily due to higher sales, but were 6% lower for the nine month period when comparing costs incurred in the 1994 periods with those of the same respective periods of 1993. Lower costs for the nine month 1994 period is generally reflective of cost containment measures and lower Corporate administrative costs primarily associated with reduced personnel costs. Administrative and general expenses had also been increased in the nine month 1993 period by a $.8 million charge for estimated future environmental costs. Administrative expenses for the first nine months of both years were reduced by $2.6 million for accrued income recognized due to the Corporation's overfunded pension plan. Page 12 of 15 CHANGES IN FINANCIAL CONDITION: Liquidity and Capital Resources: The Corporation's working capital was $103.9 million at September 30, 1994, a 12% increase from working capital of $92.7 million at December 31, 1993. The ratio of current assets to current liabilities at September 30, 1994 also increased to 3.6 to 1 from 3.1 to 1 at December 31, 1993. The increase in working capital reflects an increase in cash and short-term investment balances which total $77.2 million at September 30, 1994, a 3% increase from December 31, 1993. Net receivables and inventories at September 30, 1994 were higher when compared with balances at December 31, 1993 due to an increase in unbilled charges associated with long-term contracts and current work in process inventory. Working capital for the first nine months of 1994 was partially reduced by higher accrued expenses generally caused by the timing of expected payments for insurance, interest and accrued wages, and by the reclassification of $1.3 million of long-term debt to a current item, caused by the exercise of a call option by a bond holder for payment in early 1995. Current liabilities overall were reduced $8.9 million for a previously reported payment made to the U.S. Government in early 1994 in connection with the settlement of a litigation. In addition, the Corporation's estimated federal tax payments were significantly reduced when comparing payments made in the first nine month period of 1994 to those made in the same prior year period. The aforementioned litigation settlement resulted in a $1.2 million refund received in the 1994 nine month period. The Corporation currently maintains a revolving credit lending facility with a group of banks which provide additional sources of capital totaling $45.0 million to the Corporation, of which $26.5 million remains unused at September 30, 1994. This facility encompasses various letters of credit issued primarily in connection with outstanding industrial revenue bonds. During the first nine of 1994, internally generated funds were more than adequate to meet capital requirements. Projected funds from operating sources are expected to be more than adequate to cover future cash requirements, including anticipated capital expenditures of approximately $3.1 million for the balance of the year and anticipated expenditures connected with environmental remediation programs. Page 13 of 15 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 27 - Financial Data Schedules (Page 15) (b) Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the quarter ended September 30, 1994. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized. CURTISS-WRIGHT CORPORATION (Registrant) By: Robert A. Bosi Robert A. Bosi, Vice-President Finance By: Kenneth P. Slezak Kenneth P. Slezak, Controller Dated: November 14, 1994 Page 14 of 15 EX-27 2 FINANCIAL DATA SCHEDULES WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 0000026324 CURTISS-WRIGHT CORPORATION 1,000 9-MOS DEC-31-1994 SEP-30-1994 5,208 71,969 33,140 (1,070) 24,171 144,195 208,987 (143,178) 241,981 40,335 13,047 10,000 0 0 144,937 241,981 114,819 123,988 80,927 28,223 0 177 274 20,755 6,958 13,797 0 0 (244) 13,553 2.68 2.68 Page 15 of 15
-----END PRIVACY-ENHANCED MESSAGE-----