Exhibit 99.1
Curtiss-Wright
Reports Third Quarter 2016 Financial Results; Maintains Full-Year EPS
And Increases Operating Margin
Guidance
CHARLOTTE, N.C.--(BUSINESS WIRE)--October 26, 2016--Curtiss-Wright
Corporation (NYSE: CW) reported financial results for the third quarter
and nine months ended September 30, 2016.
Third Quarter 2016 Highlights
-
Earnings per diluted share of $1.02, exceeding expectations;
-
Free cash flow of $100 million, resulting in free cash flow conversion
of 218%, as defined herein;
-
Net sales of $507 million;
-
Operating income of $77 million;
-
Operating margin of 15.1%, up 300 basis points as compared with the
prior period;
-
Backlog of $2.0 billion increased 6% from December 31, 2015; and
-
Share repurchase of approximately $25 million.
Full-Year 2016 Business Outlook
-
Increasing operating margin guidance by 10 basis points to new range
of 14.3% to 14.5%, an increase of 100 to 120 basis points compared
with pro forma 2015, despite a slight reduction to sales forecast;
-
Maintaining expectations for diluted earnings per share (EPS) of $4.00
to $4.15; and
-
Maintaining free cash flow guidance range of $300 million to $320
million.
“Our third quarter results were ahead of our expectations, led by strong
margin improvement within the Defense and Power segments,” said David C.
Adams, Chairman and CEO of Curtiss-Wright Corporation. “This performance
was primarily driven by increased profitability on our embedded
computing products serving the defense markets, as well as higher
margins on the AP1000 program, as we continue to support new nuclear
power plant construction in the U.S. and China. Further,
Curtiss-Wright’s commitment to ongoing margin improvement initiatives is
driving increased profitability and generating significant value for our
shareholders, as we continue to mitigate challenging conditions in the
nuclear aftermarket and general industrial end markets.”
“Looking at the remainder of 2016, we are raising our full-year
operating margin guidance to 14.3% to 14.5%, a 100 to 120 basis point
improvement compared with pro forma 2015 results. As a result, we expect
to be in the top quartile of our peer group. In addition, we are
maintaining our full-year free cash flow guidance range of $300 to $320
million, which reflects strong year-to-date free cash flow and efficient
working capital management.”
Third Quarter 2016 Operating Results from Continuing Operations
|
(In thousands)
|
|
3Q-2016
|
|
|
3Q-2015
|
|
|
% Change
|
|
Sales
|
|
$ 507,092
|
|
|
$ 525,535
|
|
|
(4%)
|
|
Operating income
|
|
76,573
|
|
|
63,813
|
|
|
20%
|
|
Operating margin
|
|
15.1%
|
|
|
12.1%
|
|
|
300 bps
|
Sales
Sales of $507 million in the third quarter decreased $18 million, or 4%,
compared to the prior year, primarily reflecting a $14 million decrease
in organic sales as well as $4 million, or 1%, in unfavorable foreign
currency translation. Third quarter 2016 sales primarily reflect
continued lower demand in the energy sector within the
Commercial/Industrial segment, as well as lower aftermarket sales in the
Power segment. Those decreases were partially offset by higher AP1000
program and naval defense revenues in the Power segment.
From an end market perspective, sales to the defense markets increased
2%, while sales to the commercial markets decreased 7%, 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 $77 million, an increase of
$13 million, or 20%, compared to the prior year. These results reflect
higher profitability on our embedded computing products in the Defense
segment and on our AP1000 program in the Power segment, as well as a
prior year one-time $7 million pension settlement charge that did not
recur in 2016. This was partially offset by reduced operating income in
the Commercial/Industrial segment resulting from lower sales volumes.
Operating margin was 15.1%, an increase of 300 basis points over the
prior year, reflecting higher segment operating income and the benefits
of our ongoing margin improvement initiatives, despite lower sales.
Non-segment Expense
Non-segment expenses decreased 65% compared with the prior year,
principally due to lower pension expense resulting from the
aforementioned prior year pension charge.
Net Earnings
Third quarter net earnings increased 20% compared with the prior year,
as higher operating income was partially offset by higher interest
expense, which increased by nearly $2 million compared to the prior
year. In addition, the effective tax rate for the current quarter was
31.0%, essentially flat compared with the prior year.
Free Cash Flow
|
(In thousands)
|
|
3Q-2016
|
|
|
3Q-2015
|
|
Net cash provided by operating activities
|
|
$ 110,581
|
|
|
|
$ 106,579
|
|
|
Capital expenditures
|
|
(10,394
|
)
|
|
|
(8,159
|
)
|
|
Free cash flow
|
|
$ 100,187
|
|
|
|
$ 98,420
|
|
Free cash flow, defined as cash flow from operations less capital
expenditures, was $100 million for the third quarter of 2016, an
increase of $2 million compared with the prior year. Net cash provided
by operating activities increased $4 million to $111 million, primarily
due to higher cash earnings and advanced payments in the current year,
partially offset by a large income tax refund in the prior year. Capital
expenditures increased by $2 million to $10 million, due to increased
investment in a facility expansion in the Commercial/Industrial segment.
New Orders and Backlog
New orders of $500 million in the third quarter increased 1% compared to
the prior year, as higher orders within the Defense segment were mainly
offset by lower orders within the Power segment. Backlog of $2.0 billion
increased 6% from December 31, 2015, primarily due to growth in our
naval defense businesses.
Other Items – Share Repurchase
During the third quarter, the Company repurchased 287,900 shares of its
common stock for approximately $25 million.
Full-Year 2016 Guidance
The Company is updating its full-year 2016 financial guidance as follows:
|
|
Prior Guidance
|
|
|
Current Guidance
|
|
|
Chg vs. 2015
|
|
Total sales
|
$2.12 - $2.17 billion
|
|
|
$2.11 - $2.16 billion
|
|
|
Down 1 - 3%
|
|
Operating income
|
$301 - $313 million
|
|
|
No change
|
|
|
Up 4 - 8%
|
|
Operating margin
|
14.2% - 14.4%
|
|
|
14.3% - 14.5%
|
|
|
Up 100 - 120 bps
|
|
Interest expense
|
$40 - $41 million
|
|
|
No change
|
|
|
|
|
Diluted earnings per share
|
$4.00 - $4.15
|
|
|
No change
|
|
|
Up 7 - 11%
|
|
Diluted shares outstanding
|
45.2 million
|
|
|
No change
|
|
|
|
|
Free cash flow
|
$300 - $320 million
|
|
|
No change
|
|
|
Up 10 - 18%
|
Notes:
Full-year 2016 growth rates reflect comparisons to 2015 Pro
Forma results, which exclude the one-time China AP1000 fee of $20
million recognized in the fourth quarter of 2015.
Additionally, 2016 growth in free cash flow is comparable to adjusted
free cash flow for 2015, which excludes the contribution to the
Company’s corporate defined benefit pension plan of $145 million in 2015.
A more detailed breakdown of the Company’s 2016 guidance by segment and
by market can be found in the accompanying schedules.
Third Quarter 2016 Segment Performance
Commercial/Industrial
|
(In thousands)
|
|
3Q-2016
|
|
|
3Q-2015
|
|
|
% Change
|
|
Sales
|
|
$ 275,649
|
|
|
$ 292,557
|
|
|
(6%)
|
|
Operating income
|
|
39,067
|
|
|
40,259
|
|
|
(3%)
|
|
Operating margin
|
|
14.2%
|
|
|
13.8%
|
|
|
40 bps
|
Sales for the third quarter were $276 million, a decrease of $17
million, or 6%, over the prior year. Organic sales decreased 5%,
excluding $3 million in unfavorable foreign currency translation. In the
general industrial market, we experienced a continued reduction in sales
of severe-service valves, primarily serving the oil and gas markets, as
well as lower sales for industrial vehicle products. Within the
commercial aerospace market, sales were up slightly, primarily due to
higher actuation systems sales to Boeing, partially offset by lower
sales of surface treatment services.
Operating income in the third quarter was $39 million, down 3% from the
prior year, while operating margin improved 40 basis points to 14.2%.
The decrease in operating income primarily reflects lower sales volumes
for industrial valves and surface treatment services. However, improved
operating margin was primarily driven by higher profitability for
industrial vehicle products, despite lower sales volumes, due to ongoing
margin improvement initiatives. In addition, favorable foreign currency
translation added $1 million to current quarter operating income.
Defense
|
(In thousands)
|
|
3Q-2016
|
|
|
|
3Q-2015
|
|
|
|
% Change
|
|
Sales
|
|
$ 113,949
|
|
|
|
$ 117,444
|
|
|
|
(3%)
|
|
Operating income
|
|
28,822
|
|
|
|
25,477
|
|
|
|
13%
|
|
Operating margin
|
|
25.3%
|
|
|
|
21.7%
|
|
|
|
360 bps
|
Sales for the third quarter were $114 million, a decrease of $3 million,
or 3%, from the prior year. Organic sales decreased 2% from the prior
year, excluding approximately $1 million in unfavorable foreign currency
translation. In the aerospace defense market, we experienced lower sales
of embedded computing products on various fighter jet and Intelligence,
Surveillance and Reconnaissance (ISR) programs. In the ground defense
market, we experienced higher sales of our ammunition handling systems.
Within the commercial aerospace market, we experienced lower revenues
for avionics and electronics equipment, primarily due to reduced
helicopter demand.
Operating income in the third quarter was $29 million, an increase of $3
million, or 13%, compared to the prior year, while operating margin
increased 360 basis points to 25.3%. These improvements in operating
income and margin were driven primarily by favorable mix for our defense
electronics products, despite flat sales volumes, as well as the
benefits of our ongoing margin improvement initiatives. In addition,
there were several non-recurring items that favorably impacted margins
in the current quarter. These results were partially offset by lower
profitability in our commercial avionics and electronics business.
Favorable foreign currency translation added approximately $1 million to
current quarter operating income.
Power
|
(In thousands)
|
|
3Q-2016
|
|
|
3Q-2015
|
|
|
% Change
|
|
Sales
|
|
$ 117,494
|
|
|
$ 115,534
|
|
|
2%
|
|
Operating income
|
|
14,130
|
|
|
13,545
|
|
|
4%
|
|
Operating margin
|
|
12.0%
|
|
|
11.7%
|
|
|
30 bps
|
Sales for the third quarter were $117 million, an increase of $2
million, or 2%, from the prior year. In the naval defense market, our
results reflect higher development revenues supporting the ramp-up on
the new Ohio-class replacement submarine program, as well as higher
sales on the Electromagnetic Aircraft Launching System (EMALS) program.
Those gains were partially offset by lower revenues on the CVN-79
aircraft carrier program as production is nearing completion. Within the
power generation market, higher revenues on the AP1000 program were more
than offset by lower aftermarket sales supporting currently operating
nuclear reactors.
Operating income in the third quarter was $14 million, an increase of
less than $1 million, or 4%, compared to the prior year, while operating
margin increased 30 basis points to 12.0%. These results primarily
reflect higher profitability on the AP1000 program, partially offset by
reduced profitability in the aftermarket power generation business due
to lower sales volumes.
Conference Call Information
The Company will host a conference call to discuss third quarter 2016
financial results at 9:00 a.m. EDT on Thursday, October 27, 2016. A live
webcast of the call and the accompanying financial presentation will be
made available on the internet by visiting the Investor Relations
section of the Company’s website at www.curtisswright.com.
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
|
|
($'s in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
Change
|
|
September 30,
|
|
Change
|
|
|
|
2016
|
|
2015
|
|
$
|
%
|
|
2016
|
|
2015
|
|
$
|
%
|
|
Product sales
|
|
$
|
413,905
|
|
|
$
|
427,732
|
|
|
$
|
(13,827
|
)
|
(3
|
%)
|
|
$
|
1,244,148
|
|
|
$
|
1,313,290
|
|
|
$
|
(69,142
|
)
|
(5
|
%)
|
|
Service sales
|
|
93,187
|
|
|
97,803
|
|
|
(4,616
|
)
|
(5
|
%)
|
|
299,218
|
|
|
303,638
|
|
|
(4,420
|
)
|
(1
|
%)
|
|
Total net sales
|
|
507,092
|
|
|
525,535
|
|
|
(18,443
|
)
|
(4
|
%)
|
|
1,543,366
|
|
|
1,616,928
|
|
|
(73,562
|
)
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales
|
|
261,488
|
|
|
284,007
|
|
|
(22,519
|
)
|
(8
|
%)
|
|
806,092
|
|
|
864,701
|
|
|
(58,609
|
)
|
(7
|
%)
|
|
Cost of service sales
|
|
61,128
|
|
|
56,034
|
|
|
5,094
|
|
9
|
%
|
|
195,515
|
|
|
193,286
|
|
|
2,229
|
|
1
|
%
|
|
Total cost of sales
|
|
322,616
|
|
|
340,041
|
|
|
(17,425
|
)
|
(5
|
%)
|
|
1,001,607
|
|
|
1,057,987
|
|
|
(56,380
|
)
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
184,476
|
|
|
185,494
|
|
|
(1,018
|
)
|
(1
|
%)
|
|
541,759
|
|
|
558,941
|
|
|
(17,182
|
)
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses
|
|
14,071
|
|
|
15,050
|
|
|
(979
|
)
|
(7
|
%)
|
|
44,467
|
|
|
45,633
|
|
|
(1,166
|
)
|
(3
|
%)
|
|
Selling expenses
|
|
26,273
|
|
|
30,247
|
|
|
(3,974
|
)
|
(13
|
%)
|
|
85,025
|
|
|
90,440
|
|
|
(5,415
|
)
|
(6
|
%)
|
|
General and administrative expenses
|
|
67,559
|
|
|
76,384
|
|
|
(8,825
|
)
|
(12
|
%)
|
|
210,342
|
|
|
220,778
|
|
|
(10,436
|
)
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
76,573
|
|
|
63,813
|
|
|
12,760
|
|
20
|
%
|
|
201,925
|
|
|
202,090
|
|
|
(165
|
)
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
10,488
|
|
|
8,972
|
|
|
1,516
|
|
17
|
%
|
|
30,694
|
|
|
26,953
|
|
|
3,741
|
|
14
|
%
|
|
Other income, net
|
|
483
|
|
|
161
|
|
|
322
|
|
NM
|
|
818
|
|
|
605
|
|
|
213
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income taxes
|
|
66,568
|
|
|
55,002
|
|
|
11,566
|
|
21
|
%
|
|
172,049
|
|
|
175,742
|
|
|
(3,693
|
)
|
(2
|
%)
|
|
Provision for income taxes
|
|
(20,636
|
)
|
|
(16,860
|
)
|
|
(3,776
|
)
|
22
|
%
|
|
(53,335
|
)
|
|
(54,256
|
)
|
|
921
|
|
(2
|
%)
|
|
Earnings from continuing operations
|
|
$
|
45,932
|
|
|
|
$
|
38,142
|
|
|
$
|
7,790
|
|
20
|
%
|
|
$
|
118,714
|
|
|
$
|
121,486
|
|
|
$
|
(2,772
|
)
|
(2
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net of tax
|
|
—
|
|
|
(4,258
|
)
|
|
4,258
|
|
NM
|
|
—
|
|
|
(45,874
|
)
|
|
45,874
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
$
|
45,932
|
|
|
$
|
33,884
|
|
|
$
|
12,048
|
|
36
|
%
|
|
$
|
118,714
|
|
|
$
|
75,612
|
|
|
$
|
43,102
|
|
57
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
1.04
|
|
|
$
|
0.82
|
|
|
|
|
|
$
|
2.67
|
|
|
$
|
2.58
|
|
|
|
|
|
Earnings from discontinued operations
|
|
—
|
|
|
(0.09
|
)
|
|
|
|
|
—
|
|
|
(0.97
|
)
|
|
|
|
|
Total
|
|
$
|
1.04
|
|
|
$
|
0.73
|
|
|
|
|
|
$
|
2.67
|
|
|
$
|
1.61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations
|
|
$
|
1.02
|
|
|
$
|
0.80
|
|
|
|
|
|
$
|
2.63
|
|
|
$
|
2.53
|
|
|
|
|
|
Earnings from discontinued operations
|
|
—
|
|
|
(0.09
|
)
|
|
|
|
|
—
|
|
|
(0.96
|
)
|
|
|
|
|
Total
|
|
$
|
1.02
|
|
|
$
|
0.71
|
|
|
|
|
|
$
|
2.63
|
|
|
$
|
1.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per share
|
|
$
|
0.13
|
|
|
$
|
0.13
|
|
|
|
|
|
$
|
0.39
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
44,323
|
|
|
46,366
|
|
|
|
|
|
44,457
|
|
|
47,082
|
|
|
|
|
|
Diluted
|
|
44,997
|
|
|
47,395
|
|
|
|
|
|
45,128
|
|
|
48,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM- not meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
|
|
($'s in thousands, except par value)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
|
December 31,
|
|
Change
|
|
|
|
|
2016
|
|
2015
|
|
%
|
|
Assets
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
452,053
|
|
|
$
|
288,697
|
|
|
57
|
%
|
|
|
Receivables, net
|
|
462,004
|
|
|
566,289
|
|
|
(18
|
%)
|
|
|
Inventories
|
|
399,638
|
|
|
379,591
|
|
|
5
|
%
|
|
|
Other current assets
|
|
49,438
|
|
|
40,306
|
|
|
23
|
%
|
|
|
Total current assets
|
|
1,363,133
|
|
|
1,274,883
|
|
|
7
|
%
|
|
Property, plant, and equipment, net
|
|
387,458
|
|
|
413,644
|
|
|
(6
|
%)
|
|
Goodwill
|
|
964,446
|
|
|
972,606
|
|
|
(1
|
%)
|
|
Other intangible assets, net
|
|
283,670
|
|
|
310,763
|
|
|
(9
|
%)
|
|
Other assets
|
|
15,277
|
|
|
17,715
|
|
|
(14
|
%)
|
|
|
Total assets
|
|
$
|
3,013,984
|
|
|
$
|
2,989,611
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Current portion of long-term and short term debt
|
|
$
|
802
|
|
|
$
|
1,259
|
|
|
(36
|
%)
|
|
|
Accounts payable
|
|
133,101
|
|
|
163,286
|
|
|
(18
|
%)
|
|
|
Accrued expenses
|
|
116,778
|
|
|
131,863
|
|
|
(11
|
%)
|
|
|
Income taxes payable
|
|
6,461
|
|
|
7,956
|
|
|
(19
|
%)
|
|
|
Deferred revenue
|
|
196,609
|
|
|
181,671
|
|
|
8
|
%
|
|
|
Other current liabilities
|
|
34,264
|
|
|
37,190
|
|
|
(8
|
%)
|
|
|
Total current liabilities
|
|
488,015
|
|
|
523,225
|
|
|
(7
|
%)
|
|
Long-term debt, net
|
|
966,040
|
|
|
951,946
|
|
|
1
|
%
|
|
Deferred tax liabilities, net
|
|
73,650
|
|
|
54,447
|
|
|
35
|
%
|
|
Accrued pension and other postretirement benefit costs
|
|
100,999
|
|
|
103,723
|
|
|
(3
|
%)
|
|
Long-term portion of environmental reserves
|
|
14,534
|
|
|
14,017
|
|
|
4
|
%
|
|
Other liabilities
|
|
83,731
|
|
|
86,830
|
|
|
(4
|
%)
|
|
|
Total liabilities
|
|
1,726,969
|
|
|
1,734,188
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
Common stock, $1 par value
|
|
$
|
49,187
|
|
|
$
|
49,190
|
|
|
0
|
%
|
|
Additional paid in capital
|
|
134,597
|
|
|
144,923
|
|
|
(7
|
%)
|
|
Retained earnings
|
|
1,692,026
|
|
|
1,590,645
|
|
|
6
|
%
|
|
Accumulated other comprehensive loss
|
|
(248,069
|
)
|
|
(225,928
|
)
|
|
10
|
%
|
|
Less: cost of treasury stock
|
|
(340,726
|
)
|
|
(303,407
|
)
|
|
12
|
%
|
|
|
Total stockholders' equity
|
|
1,287,015
|
|
|
1,255,423
|
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
3,013,984
|
|
|
$
|
2,989,611
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
|
SEGMENT INFORMATION (UNAUDITED)
|
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
|
|
Change
|
|
|
|
|
|
Change
|
|
|
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
$
|
275,649
|
|
|
$
|
292,557
|
|
|
(6
|
%)
|
|
$
|
840,422
|
|
|
$
|
894,909
|
|
|
(6
|
%)
|
|
Defense
|
|
113,949
|
|
|
117,444
|
|
|
(3
|
%)
|
|
333,301
|
|
|
350,595
|
|
|
(5
|
%)
|
|
Power
|
|
117,494
|
|
|
115,534
|
|
|
2
|
%
|
|
369,643
|
|
|
371,424
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total sales
|
|
$
|
507,092
|
|
|
$
|
525,535
|
|
|
(4
|
%)
|
|
$
|
1,543,366
|
|
|
$
|
1,616,928
|
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
$
|
39,067
|
|
|
$
|
40,259
|
|
|
(3
|
%)
|
|
$
|
108,076
|
|
|
$
|
128,801
|
|
|
(16
|
%)
|
|
Defense
|
|
28,822
|
|
|
25,477
|
|
|
13
|
%
|
|
64,276
|
|
|
67,895
|
|
|
(5
|
%)
|
|
Power
|
|
14,130
|
|
|
13,545
|
|
|
4
|
%
|
|
44,872
|
|
|
34,511
|
|
|
30
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments
|
|
$
|
82,019
|
|
|
$
|
79,281
|
|
|
3
|
%
|
|
$
|
217,224
|
|
|
$
|
231,207
|
|
|
(6
|
%)
|
|
Corporate and other
|
|
(5,446
|
)
|
|
(15,468
|
)
|
|
65
|
%
|
|
(15,299
|
)
|
|
(29,117
|
)
|
|
47
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating income
|
|
$
|
76,573
|
|
|
$
|
63,813
|
|
|
20
|
%
|
|
$
|
201,925
|
|
|
$
|
202,090
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
|
14.2
|
%
|
|
13.8
|
%
|
|
|
|
12.9
|
%
|
|
14.4
|
%
|
|
|
|
Defense
|
|
25.3
|
%
|
|
21.7
|
%
|
|
|
|
19.3
|
%
|
|
19.4
|
%
|
|
|
|
Power
|
|
12.0
|
%
|
|
11.7
|
%
|
|
|
|
12.1
|
%
|
|
9.3
|
%
|
|
|
|
Total Curtiss-Wright
|
|
15.1
|
%
|
|
12.1
|
%
|
|
|
|
13.1
|
%
|
|
12.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment margins
|
|
16.2
|
%
|
|
15.1
|
%
|
|
|
|
14.1
|
%
|
|
14.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
2016
|
|
2015
|
|
%
|
|
2016
|
|
2015
|
|
%
|
|
Defense markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
|
$
|
77,990
|
|
|
$
|
81,758
|
|
|
(5
|
%)
|
|
$
|
215,586
|
|
|
$
|
228,865
|
|
|
(6
|
%)
|
|
Ground
|
|
|
19,599
|
|
|
18,522
|
|
|
6
|
%
|
|
58,654
|
|
|
61,415
|
|
|
(4
|
%)
|
|
Naval
|
|
|
100,054
|
|
|
96,229
|
|
|
4
|
%
|
|
297,512
|
|
|
286,113
|
|
|
4
|
%
|
|
Other
|
|
|
4,391
|
|
|
1,410
|
|
|
211
|
%
|
|
8,185
|
|
|
4,960
|
|
|
65
|
%
|
|
Total Defense
|
|
|
$
|
202,034
|
|
|
$
|
197,919
|
|
|
2
|
%
|
|
$
|
579,937
|
|
|
$
|
581,353
|
|
|
0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial markets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace
|
|
|
$
|
94,241
|
|
|
$
|
94,476
|
|
|
0
|
%
|
|
$
|
299,052
|
|
|
$
|
294,554
|
|
|
2
|
%
|
|
Power Generation
|
|
|
89,600
|
|
|
87,371
|
|
|
3
|
%
|
|
285,030
|
|
|
294,848
|
|
|
(3
|
%)
|
|
General Industrial
|
|
|
121,217
|
|
|
145,769
|
|
|
(17
|
%)
|
|
379,347
|
|
|
446,173
|
|
|
(15
|
%)
|
|
Total Commercial
|
|
|
$
|
305,058
|
|
|
$
|
327,616
|
|
|
(7
|
%)
|
|
$
|
963,429
|
|
|
$
|
1,035,575
|
|
|
(7
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Curtiss-Wright
|
|
|
$
|
507,092
|
|
|
$
|
525,535
|
|
|
(4
|
%)
|
|
$
|
1,543,366
|
|
|
$
|
1,616,928
|
|
|
(5
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Financial Information (Unaudited)
The Corporation supplements its financial information determined under
U.S. generally accepted accounting principles (GAAP) with certain
non-GAAP financial information. Curtiss-Wright believes that these
non-GAAP measures provide investors with additional insight into the
Company’s ongoing business performance. These non-GAAP measures should
not be considered in isolation or as a substitute for the related GAAP
measures, and other companies may define such measures differently.
Curtiss-Wright encourages investors to review its financial statements
and publicly-filed reports in their entirety and not to rely on any
single financial measure. The following definitions are provided:
Organic Revenue and Organic Operating Income
The Corporation discloses organic revenue and organic operating income
because the Corporation believes it provides investors with insight as
to the Company’s ongoing business performance. Organic revenue and
organic operating income are defined as revenue and operating income
excluding the impact of foreign currency fluctuations and contributions
from acquisitions made during the last twelve months.
|
|
|
Three Months Ended
|
|
|
|
September 30,
|
|
|
|
2016 vs. 2015
|
|
|
|
Commercial/Industrial
|
|
Defense
|
|
Power
|
|
Total Curtiss-Wright
|
|
|
|
Sales
|
|
Operating
income
|
|
Sales
|
|
Operating
income
|
|
Sales
|
|
Operating
income
|
|
|
Sales
|
|
Operating
income
|
|
Organic
|
|
(5
|
%)
|
|
(6
|
%)
|
|
(2
|
%)
|
|
10
|
%
|
|
2
|
%
|
|
4%
|
|
|
(3
|
%)
|
|
17
|
%
|
|
Acquisitions
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0%
|
|
|
0
|
%
|
|
0
|
%
|
|
Foreign Currency
|
|
(1
|
%)
|
|
3
|
%
|
|
(1
|
%)
|
|
3
|
%
|
|
0
|
%
|
|
0%
|
|
|
(1
|
%)
|
|
3
|
%
|
|
Total
|
|
(6
|
%)
|
|
(3
|
%)
|
|
(3
|
%)
|
|
13
|
%
|
|
2
|
%
|
|
4%
|
|
|
(4
|
%)
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
2016 vs. 2015
|
|
|
|
Commercial/Industrial
|
|
Defense
|
|
Power
|
|
Total Curtiss-Wright
|
|
|
|
Sales
|
|
Operating
income
|
|
Sales
|
|
Operating
income
|
|
Sales
|
|
Operating
income
|
|
|
Sales
|
|
Operating
income
|
|
Organic
|
|
(5
|
%)
|
|
(19
|
%)
|
|
(4
|
%)
|
|
(12
|
%)
|
|
0
|
%
|
|
30%
|
|
|
(4
|
%)
|
|
(4
|
%)
|
|
Acquisitions
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0
|
%
|
|
0%
|
|
|
0
|
%
|
|
0
|
%
|
|
Foreign Currency
|
|
(1
|
%)
|
|
3
|
%
|
|
(1
|
%)
|
|
7
|
%
|
|
0
|
%
|
|
0%
|
|
|
(1
|
%)
|
|
4
|
%
|
|
Total
|
|
(6
|
%)
|
|
(16
|
%)
|
|
(5
|
%)
|
|
(5
|
%)
|
|
0
|
%
|
|
30%
|
|
|
(5
|
%)
|
|
0
|
%
|
Free Cash Flow and Free Cash Flow Conversion
The Corporation discloses free cash flow because it measures cash flow
available for investing and financing activities. Free cash flow
represents cash available to repay outstanding debt, invest in the
business, acquire businesses, return capital to shareholders and make
other strategic investments. Free cash flow is defined as cash flow
provided by operating activities less capital expenditures. The
Corporation discloses free cash flow conversion because it measures the
proportion of net earnings converted into free cash flow and is defined
as free cash flow divided by net earnings from continuing operations.
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
|
|
NON-GAAP FINANCIAL DATA (UNAUDITED)
|
|
($'s in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used by) operating activities
|
|
|
$
|
110,581
|
|
|
$
|
106,579
|
|
|
$
|
267,212
|
|
|
$
|
(4,691
|
)
|
|
Capital expenditures
|
|
|
|
(10,394
|
)
|
|
(8,159
|
)
|
|
(26,127
|
)
|
|
(23,848
|
)
|
|
Free cash flow
|
|
|
|
$
|
100,187
|
|
|
$
|
98,420
|
|
|
$
|
241,085
|
|
|
$
|
(28,539
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Payment
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
145,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted free cash flow
|
|
|
|
$
|
100,187
|
|
|
$
|
98,420
|
|
|
$
|
241,085
|
|
|
$
|
116,461
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow Conversion
|
|
|
|
218
|
%
|
|
258
|
%
|
|
203
|
%
|
|
96
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURTISS-WRIGHT CORPORATION
|
|
2016 Guidance (from Continuing Operations)
|
|
As of October 26, 2016
|
|
($'s in millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
Reported
|
|
2015 Pro
Forma*
|
|
2016 Guidance (Current)
|
|
|
|
|
Low
|
|
High
|
|
Sales:
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
$
|
1,185
|
|
|
$
|
1,185
|
|
|
$
|
1,120
|
|
|
$
|
1,145
|
|
|
Defense
|
477
|
|
|
477
|
|
|
475
|
|
|
485
|
|
|
Power
|
543
|
|
|
523
|
|
|
515
|
|
|
530
|
|
|
Total sales
|
$
|
2,206
|
|
|
$
|
2,186
|
|
|
$
|
2,110
|
|
|
$
|
2,160
|
|
|
|
|
|
|
|
|
|
|
|
Operating income:
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
$
|
172
|
|
|
$
|
172
|
|
|
$
|
158
|
|
|
$
|
163
|
|
|
Defense
|
99
|
|
|
99
|
|
|
96
|
|
|
100
|
|
|
Power
|
75
|
|
|
55
|
|
|
70
|
|
|
73
|
|
|
Total segments
|
346
|
|
|
326
|
|
|
324
|
|
|
336
|
|
|
Corporate and other
|
(35
|
)
|
|
(35
|
)
|
|
(23
|
)
|
|
(24
|
)
|
|
Total operating income
|
$
|
311
|
|
|
$
|
291
|
|
|
$
|
301
|
|
|
$
|
313
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
$
|
(36
|
)
|
|
$
|
(36
|
)
|
|
$
|
(40
|
)
|
|
$
|
(41
|
)
|
|
Earnings before income taxes
|
275
|
|
|
255
|
|
|
262
|
|
|
272
|
|
|
Provision for income taxes
|
(83
|
)
|
|
(77
|
)
|
|
(81
|
)
|
|
(84
|
)
|
|
Net earnings
|
$
|
192
|
|
|
$
|
178
|
|
|
$
|
181
|
|
|
$
|
188
|
|
|
|
|
|
|
|
|
|
|
|
Reported diluted earnings per share
|
$
|
4.04
|
|
|
$
|
3.74
|
|
|
$
|
4.00
|
|
|
$
|
4.15
|
|
|
Diluted shares outstanding
|
47.6
|
|
|
47.6
|
|
|
45.2
|
|
|
45.2
|
|
|
Effective tax rate
|
30.1
|
%
|
|
30.1
|
%
|
|
31.0
|
%
|
|
31.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margins:
|
|
|
|
|
|
|
|
|
Commercial/Industrial
|
14.5
|
%
|
|
14.5
|
%
|
|
14.1
|
%
|
|
14.3
|
%
|
|
Defense
|
20.7
|
%
|
|
20.7
|
%
|
|
20.3
|
%
|
|
20.5
|
%
|
|
Power
|
13.8
|
%
|
|
10.5
|
%
|
|
13.6
|
%
|
|
13.8
|
%
|
|
Total operating margin
|
14.1
|
%
|
|
13.3
|
%
|
|
14.3
|
%
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
Note: Full year amounts may not add due to rounding
|
* Excludes the one-time China AP1000 fee of $20 million recognized as
revenue and operating income in the fourth quarter of 2015. This affects
the Power segment and Total Curtiss-Wright.
|
CURTISS-WRIGHT CORPORATION
|
|
2016 Sales Growth Guidance by End Market (from Continuing
Operations)
|
|
As of October 26, 2016
|
|
|
|
|
|
|
|
|
(Prior)
|
|
|
(Current)
|
|
|
2016 % Change vs 2015
|
|
|
2016 % Change vs 2015
|
|
|
|
|
|
|
|
Defense Markets
|
|
|
|
|
|
Aerospace
|
Flat
|
|
|
Flat
|
|
Ground
|
(2 - 4%)
|
|
|
(2 - 4%)
|
|
Navy
|
0 - 2%
|
|
|
6 - 8%
|
|
Total Defense (Including Other Defense)
|
Flat
|
|
|
Up 1% to 3%
|
|
|
|
|
|
|
|
Commercial Markets
|
|
|
|
|
|
Commercial Aerospace
|
Flat
|
|
|
Flat
|
|
Power Generation
|
0 - 2%
|
|
|
(1 - 3%)
|
|
General Industrial
|
(5 - 9%)
|
|
|
(10 - 12%)
|
|
Total Commercial
|
(2 - 4%)
|
|
|
(4 - 6%)
|
|
|
|
|
|
|
|
Total Curtiss-Wright Sales
|
Down 1% to 3%
|
|
|
Down 1% to 3%
|
|
|
|
|
|
|
|
Note: Full year amounts may not add due to rounding
|
|
|
* The Company’s full-year 2016 guidance reflects sales growth rates
compared to 2015 Pro Forma results, which exclude the one-time China
AP1000 fee of $20 million recognized as revenue in the fourth quarter of
2015. This affects 2016 growth rates for Power Generation, Total
Commercial and Total Curtiss-Wright sales.
About Curtiss-Wright Corporation
Curtiss-Wright Corporation (NYSE: CW) is a global innovative company
that delivers highly engineered, critical function products and services
to the commercial, industrial, defense and energy markets. Building on
the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright
has a long tradition of providing reliable solutions through trusted
customer relationships. The company employs approximately 8,400 people
worldwide. For more information, visit www.curtisswright.com.
Certain statements made in this press release, including statements
about future revenue, financial performance guidance, quarterly and
annual revenue, net income, operating income growth, future business
opportunities, cost saving initiatives, the successful integration of
the Company’s acquisitions, and future cash flow from operations, are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements present management's
expectations, beliefs, plans and objectives regarding future financial
performance, and assumptions or judgments concerning such performance.
Any discussions contained in this press release, except to the extent
that they contain historical facts, are forward-looking and accordingly
involve estimates, assumptions, judgments and uncertainties. Such
forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
those expressed or implied. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date hereof. Such risks and uncertainties include, but are not limited
to: a reduction in anticipated orders; an economic downturn; changes in
the competitive marketplace and/or customer requirements; a change in
government spending; an inability to perform customer contracts at
anticipated cost levels; and other factors that generally affect the
business of aerospace, defense contracting, electronics, marine, and
industrial companies. Such factors are detailed in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2015, and
subsequent reports filed with the Securities and Exchange Commission.
This press release and additional information are available at www.curtisswright.com.
CONTACT:
Curtiss-Wright Corporation
Jim Ryan, 704-869-4621
Jim.Ryan@curtisswright.com
