UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington,
D.C. 20549
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FORM
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CURRENT
REPORT
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(State or Other
Jurisdiction of
Incorporation)
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(Commission File
Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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CURTISS-WRIGHT CORPORATION
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By:
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/s/ K. Christopher Farkas
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K. Christopher Farkas
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Vice-President and
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Chief Financial Officer
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Q4 Results Reflect Strong Defense Market Sales Growth and Benefits of Restructuring Savings; Company Achieves Record Q4 and FY20 Adjusted Free Cash Flow
Introduces New Segment and End Market Structure Effective Q1 2021
DAVIDSON, N.C.--(BUSINESS WIRE)--February 24, 2021--Curtiss-Wright Corporation (NYSE: CW) reports financial results for the fourth quarter and full-year ended December 31, 2020.
Fourth Quarter 2020 Highlights:
Full-Year 2020 Highlights:
“As we reflect on Curtiss-Wright’s performance in 2020, I am proud of the team and their agility, resilience and focus to achieve exceptional results in a very challenging year,” said Lynn M. Bamford, President and CEO of Curtiss-Wright Corporation.
“We concluded 2020 by delivering solid fourth quarter results, driven by sequentially higher sales across all of our major end markets. During the quarter, we benefited from the acceleration of growth in our defense markets, the contribution from our recent PacStar acquisition and improving trends in our commercial markets. In addition, our strong financial performance reflects the savings generated by our restructuring actions and the benefit of our opportunistic share repurchase activity.
“Turning to our full-year 2020 results, we delivered strong full-year Adjusted operating margin, just shy of the prior year’s performance. We remain committed to achieving our 17% target in 2022. Further, we achieved record Adjusted free cash flow and leveraged our strong and healthy balance sheet to implement our balanced capital allocation strategy by completing our largest acquisition to date of $400 million, executing $200 million in share repurchases and maintaining a stable dividend.
“Looking ahead to 2021, we are projecting mid-to-high single digit growth in sales, Adjusted operating income and Adjusted diluted EPS. We are confident that our team can maintain its high level of performance and execution to keep us on a path to achieve our long-term targets. Additionally, today we are announcing new segment and end market structures to better align our business to our key strategies and industry drivers, while also helping to simplify our portfolio for investors. This is the first step, ahead of our planned May 2021 investor day, in communicating our new vision and strategy which will drive long-term profitable growth and deliver significant value for our shareholders.”
Fourth Quarter 2020 Operating Results
(In millions) |
Q4-2020 |
Q4-2019 |
Change |
|||||
Sales |
$ |
668.4 |
|
$ |
655.8 |
|
2 |
% |
Reported operating income |
$ |
76.5 |
|
$ |
120.7 |
|
(37 |
%) |
Adjustments (1) |
|
56.4 |
|
|
2.5 |
|
|
|
Adjusted operating income (1) |
$ |
132.8 |
|
$ |
123.2 |
|
8 |
% |
Adjusted operating margin (1) |
|
19.8 |
% |
|
18.8 |
% |
100 bps |
(1) |
Fourth quarter 2020 Adjusted results exclude $33 million related to an impairment of a German valves business within the Commercial/Industrial segment classified as held for sale, $12 million in restructuring costs and $11 million in one-time inventory step-up, backlog amortization and transaction costs for acquisitions. Amounts may not add due to rounding. |
Free Cash Flow
(In millions) |
Q4-2020 |
Q4-2019 |
Change |
|||||
Net cash provided by operating activities |
$ |
257.4 |
|
$ |
262.4 |
|
(2 |
%) |
Capital expenditures |
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(11.2 |
) |
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(19.8 |
) |
44 |
% |
Reported free cash flow |
$ |
246.2 |
|
$ |
242.6 |
|
2 |
% |
Adjustment to capital expenditures (DRG facility investment) (1) |
|
0.1 |
|
|
5.3 |
|
- |
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Restructuring (1) |
|
9.6 |
|
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- |
|
- |
|
Adjusted free cash flow (1) |
$ |
256.0 |
|
$ |
247.9 |
|
3 |
% |
(1) |
Adjusted free cash flow excludes a capital investment related to the new, state-of-the-art naval facility principally for DRG which impacted both periods, and the cash impact from restructuring in the current period. Amounts may not add due to rounding. |
New Orders and Backlog
Share Repurchase and Dividends
Other Items – Business Held for Sale
Fourth Quarter 2020 Segment Performance
Commercial/Industrial
(In millions) |
Q4-2020 |
Q4-2019 |
Change |
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Sales |
$ |
249.2 |
|
$ |
296.1 |
|
(16 |
%) |
Reported operating income |
$ |
7.4 |
|
$ |
49.4 |
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(85 |
%) |
Adjustments (1) |
|
40.0 |
|
|
- |
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Adjusted operating income (1) |
$ |
47.3 |
|
$ |
49.4 |
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(4 |
%) |
Adjusted operating margin (1) |
|
19.0 |
% |
|
16.7 |
% |
230 bps |
(1) |
Adjusted results exclude an impairment of a valves business classified as held for sale, restructuring costs and one-time backlog amortization and transaction costs for acquisitions. Amounts may not add due to rounding. |
Defense
(In millions) |
Q4-2020 |
Q4-2019 |
Change |
|||||
Sales |
$ |
217.5 |
|
$ |
173.3 |
|
26 |
% |
Reported operating income |
$ |
42.3 |
|
$ |
43.7 |
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(3 |
%) |
Adjustments (1) |
|
10.6 |
|
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0.5 |
|
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Adjusted operating income (1) |
$ |
52.9 |
|
$ |
44.2 |
|
20 |
% |
Adjusted operating margin (1) |
|
24.2 |
% |
|
25.5 |
% |
(130 bps) |
(1) |
Adjusted results exclude restructuring costs and one-time backlog amortization and transaction costs for acquisitions. |
Power
(In millions) |
Q4-2020 |
Q4-2019 |
Change |
|||||
Sales |
$ |
201.8 |
|
$ |
186.4 |
|
8 |
% |
Reported operating income |
$ |
36.8 |
|
$ |
36.0 |
|
2 |
% |
Adjustments (1) |
|
5.8 |
|
|
2.0 |
|
|
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Adjusted operating income (1) |
$ |
42.6 |
|
$ |
38.0 |
|
12 |
% |
Adjusted operating margin (1) |
|
21.1 |
% |
|
20.4 |
% |
70 bps |
(1) |
Adjusted results exclude restructuring costs and one-time transition and IT security costs associated with the relocation of our DRG business. |
Full-Year 2021 Guidance
The Company’s full-year 2021 Adjusted financial guidance is as follows:
(In millions, except EPS) |
2021 Reported |
2021 |
2021 Adjusted |
2021 Adjusted Chg |
Total Sales |
$2,490 - $2,540 |
($45) |
$2,445 - $2,495 |
Up 6% - 8% |
Operating Income |
$402 - $412 |
$2 |
$404 - $414 |
Up 7% - 10% |
Operating Margin |
16.1% - 16.2% |
40 bps |
16.5% - 16.6% |
Up 20 - 30 bps |
Diluted EPS |
$6.90 - $7.10 |
$0.10 |
$7.00 - $7.20 |
Up 6% - 9% |
Diluted Shares Outstanding |
41.4 |
- |
41.4 |
|
Free Cash Flow |
$330 - $360 |
- |
$330 - $360 |
|
(1) |
2021 Adjusted financial guidance used in comparisons to 2020 financial results excludes one-time backlog amortization and deferred revenue adjustments associated with the acquisition of PacStar, as well as our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited and our German valves business which was classified as held for sale, both in the fourth quarter of 2020. |
New Segment Structure and Realignment:
Beginning in the first quarter of 2021, the Corporation is realigning its segments, as follows:
New End Market Structure and Realignment:
A more detailed breakdown of the Company’s 2021 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts can be found in the accompanying schedules.
Conference Call & Webcast Information
The Company will host a conference call to discuss fourth quarter and full-year 2020 financial results and expectations for 2021 guidance at 10:00 a.m. ET on Thursday, February 25, 2021. A live webcast of the call and the accompanying financial presentation, as well as a replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.
(Tables to Follow)
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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) |
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($'s in thousands, except per share data) |
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Three Months Ended |
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Year Ended |
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December 31, |
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Change |
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December 31, |
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Change |
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2020 |
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2019 |
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$ |
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% |
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2020 |
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2019 |
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$ |
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% |
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Product sales |
$ |
583,314 |
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$ |
552,918 |
|
$ |
30,396 |
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5% |
$ |
2,041,086 |
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$ |
2,073,530 |
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$ |
(32,444 |
) |
(2)% |
||||||||
Service sales |
|
85,130 |
|
|
102,853 |
|
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(17,723 |
) |
(17)% |
|
350,250 |
|
|
414,431 |
|
|
(64,181 |
) |
(15)% |
||||||||
Total net sales |
|
668,444 |
|
|
655,771 |
|
|
12,673 |
|
2% |
|
2,391,336 |
|
|
2,487,961 |
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(96,625 |
) |
(4)% |
||||||||
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Cost of product sales |
|
373,676 |
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|
343,286 |
|
|
30,390 |
|
9% |
|
1,319,562 |
|
|
1,329,761 |
|
|
(10,199 |
) |
(1)% |
||||||||
Cost of service sales |
|
52,967 |
|
|
66,733 |
|
|
(13,766 |
) |
(21)% |
|
230,547 |
|
|
259,455 |
|
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(28,908 |
) |
(11)% |
||||||||
Total cost of sales |
|
426,643 |
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|
410,019 |
|
|
16,624 |
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4% |
|
1,550,109 |
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|
1,589,216 |
|
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(39,107 |
) |
(2)% |
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Gross profit |
|
241,801 |
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|
245,752 |
|
|
(3,951 |
) |
(2)% |
|
841,227 |
|
|
898,745 |
|
|
(57,518 |
) |
(6)% |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Research and development expenses |
|
20,653 |
|
|
18,017 |
|
|
2,636 |
|
15% |
|
74,816 |
|
|
72,520 |
|
|
2,296 |
|
3% |
||||||||
Selling expenses |
|
27,887 |
|
|
30,558 |
|
|
(2,671 |
) |
(9)% |
|
109,537 |
|
|
120,861 |
|
|
(11,324 |
) |
(9)% |
||||||||
General and administrative expenses |
|
72,773 |
|
|
76,523 |
|
|
(3,750 |
) |
(5)% |
|
303,288 |
|
|
301,411 |
|
|
1,877 |
|
1% |
||||||||
Impairment of assets held for sale |
|
33,043 |
|
|
— |
|
|
33,043 |
|
NM |
|
33,043 |
|
|
— |
|
|
33,043 |
|
NM |
||||||||
Restructuring expenses |
|
10,965 |
|
|
— |
|
|
10,965 |
|
NM |
|
31,695 |
|
|
— |
|
|
31,695 |
|
NM |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Operating income |
|
76,480 |
|
|
120,654 |
|
|
(44,174 |
) |
(37)% |
|
288,848 |
|
|
403,953 |
|
|
(115,105 |
) |
(28)% |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Interest expense |
|
10,486 |
|
|
8,164 |
|
|
2,322 |
|
28% |
|
35,545 |
|
|
31,347 |
|
|
4,198 |
|
13% |
||||||||
Other income, net |
|
2,904 |
|
|
6,152 |
|
|
(3,248 |
) |
(53)% |
|
9,748 |
|
|
23,856 |
|
|
(14,108 |
) |
(59)% |
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
Earnings before income taxes |
|
68,898 |
|
|
118,642 |
|
|
(49,744 |
) |
(42)% |
|
263,051 |
|
|
396,462 |
|
|
(133,411 |
) |
(34)% |
||||||||
Provision for income taxes |
|
(14,905 |
) |
|
(29,234 |
) |
|
14,329 |
|
(49)% |
|
(61,659 |
) |
|
(88,879 |
) |
|
27,220 |
|
(31)% |
||||||||
Net earnings |
$ |
53,993 |
|
$ |
89,408 |
|
$ |
(35,415 |
) |
(40)% |
$ |
201,392 |
|
$ |
307,583 |
|
$ |
(106,191 |
) |
(35)% |
||||||||
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Net earnings per share: |
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Basic earnings per share |
$ |
1.31 |
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$ |
2.09 |
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$ |
4.83 |
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$ |
7.20 |
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Diluted earnings per share |
$ |
1.30 |
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$ |
2.08 |
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$ |
4.80 |
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$ |
7.15 |
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Dividends per share |
$ |
0.17 |
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$ |
0.17 |
|
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$ |
0.68 |
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$ |
0.66 |
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Weighted average shares outstanding: |
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Basic |
|
41,209 |
|
|
42,687 |
|
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|
|
41,738 |
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|
42,739 |
|
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|
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Diluted |
|
41,460 |
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|
42,986 |
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|
|
|
41,999 |
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|
43,016 |
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NM = Not Meaningful |
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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
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($'s in thousands, except par value) |
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December 31, |
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December 31, |
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Change |
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2020 |
|
2019 |
|
% |
|||||
Assets |
|
|
|
|||||||
Current assets: |
|
|
|
|||||||
Cash and cash equivalents |
$ |
198,248 |
|
$ |
391,033 |
|
(49)% |
|||
Receivables, net |
|
588,718 |
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|
632,194 |
|
(7)% |
|||
Inventories, net |
|
428,879 |
|
|
424,835 |
|
1% |
|||
Assets held for sale |
|
27,584 |
|
|
— |
|
NM |
|||
Other current assets |
|
57,395 |
|
|
81,729 |
|
(30)% |
|||
Total current assets |
|
1,300,824 |
|
|
1,529,791 |
|
(15)% |
|||
Property, plant, and equipment, net |
|
378,200 |
|
|
385,593 |
|
(2)% |
|||
Goodwill |
|
1,455,137 |
|
|
1,166,680 |
|
25% |
|||
Other intangible assets, net |
|
609,630 |
|
|
479,907 |
|
27% |
|||
Operating lease right-of-use assets, net |
|
150,898 |
|
|
165,490 |
|
(9)% |
|||
Prepaid pension asset |
|
92,531 |
|
|
— |
|
NM |
|||
Other assets |
|
34,114 |
|
|
36,800 |
|
(7)% |
|||
Total assets |
$ |
4,021,334 |
|
$ |
3,764,261 |
|
7% |
|||
|
|
|
|
|||||||
Liabilities |
|
|
|
|||||||
Current liabilities: |
|
|
|
|||||||
Current portion of long-term and short term debt |
$ |
100,000 |
|
$ |
— |
|
NM |
|||
Accounts payable |
|
201,237 |
|
|
222,000 |
|
(9)% |
|||
Accrued expenses |
|
140,200 |
|
|
164,744 |
|
(15)% |
|||
Income taxes payable |
|
6,633 |
|
|
7,670 |
|
(14)% |
|||
Deferred revenue |
|
253,411 |
|
|
276,115 |
|
(8)% |
|||
Liabilities held for sale |
|
10,141 |
|
|
— |
|
NM |
|||
Other current liabilities |
|
98,755 |
|
|
74,202 |
|
33% |
|||
Total current liabilities |
|
810,377 |
|
|
744,731 |
|
9% |
|||
Long-term debt, net |
|
958,292 |
|
|
760,639 |
|
26% |
|||
Deferred tax liabilities |
|
115,007 |
|
|
80,159 |
|
43% |
|||
Accrued pension and other postretirement benefit costs |
|
98,345 |
|
|
138,635 |
|
(29)% |
|||
Long-term operating lease liability |
|
133,069 |
|
|
145,124 |
|
(8)% |
|||
Long-term portion of environmental reserves |
|
15,422 |
|
|
15,026 |
|
3% |
|||
Other liabilities |
|
103,248 |
|
|
105,575 |
|
(2)% |
|||
Total liabilities |
|
2,233,760 |
|
|
1,989,889 |
|
12% |
|||
|
|
|
|
|||||||
Stockholders' equity |
|
|
|
|||||||
Common stock, $1 par value |
$ |
49,187 |
|
$ |
49,187 |
|
0% |
|||
Additional paid in capital |
|
122,535 |
|
|
116,070 |
|
6% |
|||
Retained earnings |
|
2,670,328 |
|
|
2,497,111 |
|
7% |
|||
Accumulated other comprehensive loss |
|
(310,856 |
) |
|
(325,274 |
) |
(4)% |
|||
Less: cost of treasury stock |
|
(743,620 |
) |
|
(562,722 |
) |
32% |
|||
Total stockholders' equity |
|
1,787,574 |
|
|
1,774,372 |
|
1% |
|||
|
|
|
|
|||||||
Total liabilities and stockholders' equity |
$ |
4,021,334 |
|
$ |
3,764,261 |
|
7% |
|||
|
|
|
|
|||||||
NM = Not Meaningful |
|
|
|
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
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SEGMENT INFORMATION (UNAUDITED) |
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($'s in thousands) |
||||||||||||||||||||
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|
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||||||||||||||
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Three Months Ended |
|
Year Ended |
|||||||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||||||
|
|
|
|
|
Change |
|
|
|
|
|
Change |
|||||||||
|
2020 |
|
2019 |
|
% |
|
2020 |
|
2019 |
|
% |
|||||||||
Sales: |
|
|
|
|
|
|
||||||||||||||
Commercial/Industrial |
$ |
249,219 |
|
$ |
296,093 |
|
(16)% |
$ |
949,762 |
|
$ |
1,137,818 |
|
(17)% |
||||||
Defense |
|
217,469 |
|
|
173,252 |
|
26% |
|
733,856 |
|
|
625,940 |
|
17% |
||||||
Power |
|
201,756 |
|
|
186,426 |
|
8% |
|
707,718 |
|
|
724,203 |
|
(2)% |
||||||
|
|
|
|
|
|
|
||||||||||||||
Total sales |
$ |
668,444 |
|
$ |
655,771 |
|
2% |
$ |
2,391,336 |
|
$ |
2,487,961 |
|
(4)% |
||||||
|
|
|
|
|
|
|
||||||||||||||
Operating income (expense): |
|
|
|
|
|
|||||||||||||||
Commercial/Industrial |
$ |
7,390 |
|
$ |
49,415 |
|
(85)% |
$ |
81,581 |
|
$ |
179,637 |
|
(55)% |
||||||
Defense |
|
42,280 |
|
|
43,706 |
|
(3)% |
|
140,406 |
|
|
137,286 |
|
2% |
||||||
Power |
|
36,783 |
|
|
35,999 |
|
2% |
|
104,626 |
|
|
122,139 |
|
(14)% |
||||||
|
|
|
|
|
|
|
||||||||||||||
Total segments |
$ |
86,453 |
|
$ |
129,120 |
|
(33)% |
$ |
326,613 |
|
$ |
439,062 |
|
(26)% |
||||||
Corporate and other |
|
(9,973 |
) |
|
(8,466 |
) |
(18)% |
|
(37,765 |
) |
|
(35,109 |
) |
(8)% |
||||||
|
|
|
|
|
|
|
||||||||||||||
Total operating income |
$ |
76,480 |
|
$ |
120,654 |
|
(37)% |
$ |
288,848 |
|
$ |
403,953 |
|
(28)% |
||||||
|
|
|
|
|
|
|
||||||||||||||
Operating margins: |
|
|
|
|
|
|
||||||||||||||
Commercial/Industrial |
|
3.0 |
% |
|
16.7 |
% |
(1,370 bps) |
|
8.6 |
% |
|
15.8 |
% |
(720 bps) |
||||||
Defense |
|
19.4 |
% |
|
25.2 |
% |
(580 bps) |
|
19.1 |
% |
|
21.9 |
% |
(280 bps) |
||||||
Power |
|
18.2 |
% |
|
19.3 |
% |
(110 bps) |
|
14.8 |
% |
|
16.9 |
% |
(210 bps) |
||||||
Total Curtiss-Wright |
|
11.4 |
% |
|
4.9 |
% |
650 bps |
|
12.1 |
% |
|
16.2 |
% |
(410 bps) |
||||||
|
|
|
|
|
|
|
||||||||||||||
Segment margins |
|
12.9 |
% |
|
19.7 |
% |
(680 bps) |
|
13.7 |
% |
|
17.6 |
% |
(390 bps) |
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
||||||||||||||||
SALES BY END MARKET (UNAUDITED) |
||||||||||||||||
($'s in thousands) |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Year Ended |
|||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
|
|
|
|
Change |
|
|
|
|
|
Change |
|||||
|
2020 |
|
2019 |
|
% |
|
2020 |
|
2019 |
|
% |
|||||
Defense markets: |
|
|
|
|
|
|
||||||||||
Aerospace |
$ |
130,715 |
|
$ |
122,886 |
|
6% |
|
$ |
463,835 |
|
$ |
416,841 |
|
11% |
|
Ground |
|
44,082 |
|
|
24,049 |
|
83% |
|
|
107,287 |
|
|
93,432 |
|
15% |
|
Naval |
|
196,011 |
|
|
144,405 |
|
36% |
|
|
692,168 |
|
|
568,776 |
|
22% |
|
Total Defense |
$ |
370,808 |
|
$ |
291,340 |
|
27% |
|
$ |
1,263,290 |
|
$ |
1,079,049 |
|
17% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Commercial markets: |
|
|
|
|
|
|
|
|
|
|
|
|||||
Aerospace |
$ |
82,810 |
|
$ |
112,801 |
|
(27)% |
|
$ |
325,518 |
|
$ |
433,038 |
|
(25)% |
|
Power Generation |
|
90,924 |
|
|
113,979 |
|
(20)% |
|
|
331,983 |
|
|
392,173 |
|
(15)% |
|
General Industrial |
|
123,902 |
|
|
137,651 |
|
(10)% |
|
|
470,545 |
|
|
583,701 |
|
(19)% |
|
Total Commercial |
$ |
297,636 |
|
$ |
364,431 |
|
(18)% |
|
$ |
1,128,046 |
|
$ |
1,408,912 |
|
(20)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total Curtiss-Wright |
$ |
668,444 |
|
$ |
655,771 |
|
2% |
|
$ |
2,391,336 |
|
$ |
2,487,961 |
|
(4)% |
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 Company’s presentation of its financials and guidance includes an Adjusted (non-GAAP) view that excludes an impairment of a German valves business classified as held for sale, significant restructuring costs in 2020 associated with its operations, including one-time actions taken in response to COVID-19, a non-cash impairment of capitalized development costs related to a commercial aerospace program, first year purchase accounting costs associated with its acquisitions, as well as one-time transition and IT security costs, and capital investments, specifically associated with the relocation of the DRG business in the Power segment. Transition costs include relocation of employees and equipment as well as overlapping facility and labor costs associated with the relocation. We believe this Adjusted view will provide 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. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.
The following definitions are provided:
Adjusted Operating Income, Operating Margin, Net Earnings and Diluted EPS
These Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share (EPS) under GAAP excluding: (i) the impact of first year purchase accounting costs associated
with acquisitions for current and prior year periods, specifically one-time inventory step-up, backlog amortization and transaction costs; (ii) one-time transition and IT security costs associated with the relocation of a business in the
current year period; (iii) the non-cash impairment of capitalized development costs related to a commercial aerospace program; and (iv) significant restructuring costs in 2020 associated with its operations, and (v) an impairment of a
German valves business classified as held for sale.
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 the impact of restructuring costs, impairment of assets held for sale, foreign currency fluctuations and contributions from acquisitions made during the last twelve months.
|
Three Months Ended |
|||||||||||||||
|
December 31, |
|||||||||||||||
|
2020 vs. 2019 |
|||||||||||||||
|
Commercial/Industrial |
|
Defense |
|
Power |
|
Total Curtiss-Wright |
|||||||||
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Organic |
(18)% |
|
(4)% |
|
5% |
|
6% |
|
8% |
|
18% |
|
(5)% |
|
5% |
|
Acquisitions |
1% |
|
(1)% |
|
20% |
|
(8)% |
|
0% |
|
0% |
|
6% |
|
(3)% |
|
Impairment of assets held for sale |
0% |
|
(67)% |
|
0% |
|
0% |
|
0% |
|
0% |
|
0% |
|
(28)% |
|
Restructuring |
0% |
|
(13)% |
|
0% |
|
0% |
|
0% |
|
(16)% |
|
0% |
|
(11)% |
|
Foreign Currency |
1% |
|
0% |
|
1% |
|
(1)% |
|
0% |
|
0% |
|
1% |
|
0% |
|
Total |
(16)% |
|
(85)% |
|
26% |
|
(3)% |
|
8% |
|
2% |
|
2% |
|
(37)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended |
|||||||||||||||
|
December 31, |
|||||||||||||||
|
2020 vs. 2019 |
|||||||||||||||
|
Commercial/Industrial |
|
Defense |
|
Power |
|
Total Curtiss-Wright |
|||||||||
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Sales |
|
Operating |
|
Organic |
(18)% |
|
(25)% |
|
5% |
|
6% |
|
(2)% |
|
0% |
|
(8)% |
|
(10)% |
|
Acquisitions |
1% |
|
(1)% |
|
12% |
|
(2)% |
|
0% |
|
0% |
|
4% |
|
(1)% |
|
Impairment of assets held for sale |
0% |
|
(18)% |
|
0% |
|
0% |
|
0% |
|
0% |
|
0% |
|
(8)% |
|
Restructuring |
0% |
|
(11)% |
|
0% |
|
(3)% |
|
0% |
|
(14)% |
|
0% |
|
(9)% |
|
Foreign Currency |
0% |
|
0% |
|
0% |
|
1% |
|
0% |
|
0% |
|
0% |
|
0% |
|
Total |
(17)% |
|
(55)% |
|
17% |
|
2% |
|
(2)% |
|
(14)% |
|
(4)% |
|
(28)% |
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. Adjusted free cash flow excludes: (i) a capital investment
in the Power segment related to the new, state-of-the-art naval facility principally for DRG; (ii) a voluntary contribution to the Company’s corporate defined benefit pension plan made in the first quarter of 2020; and (iii) the cash impact
from restructuring in 2020. 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. Adjusted free cash flow conversion 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 |
|
Year Ended |
|||||||||||||
|
December 31, |
|
December 31, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Net cash provided by operating activities |
$ |
257,396 |
|
$ |
262,389 |
|
$ |
261,180 |
|
$ |
421,404 |
|
||||
Capital expenditures |
|
(11,158 |
) |
|
(19,833 |
) |
|
(47,499 |
) |
|
(69,752 |
) |
||||
Free cash flow |
$ |
246,238 |
|
$ |
242,556 |
|
$ |
213,681 |
|
$ |
351,652 |
|
||||
Voluntary pension contribution |
|
— |
|
|
— |
|
|
150,000 |
|
|
— |
|
||||
Adjustment to capital expenditures (DRG facility investment) |
|
139 |
|
|
5,298 |
|
|
10,251 |
|
|
19,284 |
|
||||
Restructuring |
|
9,582 |
|
|
— |
|
|
20,258 |
|
|
— |
|
||||
Adjusted free cash flow |
$ |
255,959 |
|
$ |
247,854 |
|
$ |
394,190 |
|
$ |
370,936 |
|
||||
Adjusted free cash flow conversion |
|
259 |
% |
|
277 |
% |
|
137 |
% |
|
121 |
% |
CURTISS-WRIGHT CORPORATION |
||||||||||||||||||||||||||||||
2020 Reconciliation Reported (GAAP) to Adjusted (Non-GAAP) |
||||||||||||||||||||||||||||||
(Old Segment Structure) |
||||||||||||||||||||||||||||||
As of February 24, 2021 |
||||||||||||||||||||||||||||||
($'s in millions, except per share data) |
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
2019 |
|
2019 |
|
2019 |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2020 Chg vs |
||||||||||||||
Sales: |
|
|||||||||||||||||||||||||||||
Commercial/Industrial |
$ |
1,138 |
|
$ |
- |
|
$ |
1,138 |
|
$ |
950 |
|
$ |
- |
|
$ |
- |
|
$ |
950 |
|
|
||||||||
Defense |
|
626 |
|
|
2 |
|
|
628 |
|
734 |
|
|
- |
|
|
2 |
|
|
736 |
|
|
|||||||||
Power |
|
724 |
|
|
- |
|
|
724 |
|
708 |
|
|
- |
|
|
- |
|
|
708 |
|
|
|||||||||
Total sales |
$ |
2,488 |
|
$ |
2 |
|
$ |
2,490 |
|
$ |
2,391 |
|
$ |
- |
|
$ |
2 |
|
$ |
2,393 |
|
(4%) |
||||||||
|
||||||||||||||||||||||||||||||
Operating income: |
|
|||||||||||||||||||||||||||||
Commercial/Industrial |
$ |
180 |
|
$ |
- |
|
$ |
180 |
|
$ |
82 |
|
$ |
20 |
|
$ |
36 |
|
$ |
138 |
|
|
||||||||
Defense |
|
137 |
|
|
2 |
|
|
140 |
|
140 |
|
|
3 |
|
|
23 |
|
|
166 |
|
|
|||||||||
Power |
|
122 |
|
|
4 |
|
|
126 |
|
105 |
|
|
17 |
|
|
3 |
|
|
125 |
|
|
|||||||||
Total segments |
|
439 |
|
|
7 |
|
|
446 |
|
327 |
|
|
41 |
|
|
61 |
|
|
429 |
|
|
|||||||||
Corporate and other |
|
(35 |
) |
|
- |
|
|
(35 |
) |
(38 |
) |
|
- |
|
|
- |
|
|
(38 |
) |
|
|||||||||
Total operating income |
$ |
404 |
|
$ |
7 |
|
$ |
411 |
|
$ |
289 |
|
$ |
41 |
|
$ |
61 |
|
$ |
391 |
|
(5%) |
||||||||
|
||||||||||||||||||||||||||||||
Interest expense |
$ |
(31 |
) |
$ |
- |
|
$ |
(31 |
) |
$ |
(36 |
) |
$ |
- |
|
$ |
- |
|
$ |
(36 |
) |
|
||||||||
Other income, net |
|
24 |
|
|
- |
|
|
24 |
|
10 |
|
|
2 |
|
|
10 |
|
|
21 |
|
|
|||||||||
Earnings before income taxes |
|
397 |
|
|
7 |
|
|
403 |
|
263 |
|
|
43 |
|
|
71 |
|
|
377 |
|
|
|||||||||
Provision for income taxes |
|
(89 |
) |
|
(2 |
) |
|
(90 |
) |
(62 |
) |
|
(10 |
) |
|
(17 |
) |
|
(88 |
) |
|
|||||||||
Net earnings |
$ |
308 |
|
$ |
5 |
|
$ |
313 |
|
$ |
201 |
|
$ |
33 |
|
$ |
54 |
|
$ |
289 |
|
|
||||||||
|
||||||||||||||||||||||||||||||
Diluted earnings per share |
$ |
7.15 |
|
$ |
0.12 |
|
$ |
7.27 |
|
$ |
4.80 |
|
$ |
0.78 |
|
$ |
1.30 |
|
$ |
6.87 |
|
(5%) |
||||||||
Diluted shares outstanding |
|
43.0 |
|
|
43.0 |
|
42.0 |
|
|
42.0 |
|
|
||||||||||||||||||
Effective tax rate |
|
22.4 |
% |
|
22.4 |
% |
23.4 |
% |
|
23.4 |
% |
|
||||||||||||||||||
|
||||||||||||||||||||||||||||||
Operating margins: |
|
|||||||||||||||||||||||||||||
Commercial/Industrial |
|
15.8 |
% |
|
- |
|
|
15.8 |
% |
8.6 |
% |
+220 bps | +380 bps |
|
14.5 |
% |
(130 bps) |
|||||||||||||
Defense |
|
21.9 |
% |
+40 bps |
|
22.3 |
% |
19.1 |
% |
+40 bps | +310 bps |
|
22.6 |
% |
30 bps |
|||||||||||||||
Power |
|
16.9 |
% |
+50 bps |
|
17.4 |
% |
14.8 |
% |
+240 bps | +40 bps |
|
17.6 |
% |
20 bps |
|||||||||||||||
Total operating margin |
|
16.2 |
% |
+30 bps |
|
16.5 |
% |
12.1 |
% |
+170 bps | +260 bps |
|
16.3 |
% |
(20 bps) |
|||||||||||||||
|
||||||||||||||||||||||||||||||
Free cash flow (3) |
$ |
352 |
|
$ |
19 |
|
$ |
371 |
|
$ |
214 |
|
$ |
20 |
|
$ |
160 |
|
$ |
394 |
|
|
||||||||
|
||||||||||||||||||||||||||||||
Notes: Full year amounts may not add due to rounding. |
||||||||||||||||||||||||||||||
(1) 2019 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding the impact of first year purchase accounting costs associated with acquisitions (Defense segment), specifically one-time backlog amortization and transaction costs, as well as one-time transition and IT security costs related to the relocation of the DRG business (Power Segment). |
||||||||||||||||||||||||||||||
(2) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 Adjusted financial results also exclude an impairment loss of $33 million for our industrial valve business in Germany, which was classified as held for sale during the fourth quarter of 2020. |
||||||||||||||||||||||||||||||
(3) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2019 Adjusted Free Cash Flow excludes a $19 million capital investment in the Power segment related to construction of a new, state-of-the-art naval facility for the DRG business. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG. |
CURTISS-WRIGHT CORPORATION |
||||||||||||||||||||||||||||
2021 Segment Reorganization |
||||||||||||||||||||||||||||
As of February 24, 2021 |
||||||||||||||||||||||||||||
($'s in millions, except per share data) |
||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||
2020 Adjusted |
|
Division |
|
Exiting |
|
2020 Adjusted (2,3) |
|
|
2021 |
|
|
|||||||||||||||||
(Prior Structure) |
|
|
|
|
|
(New Segment |
|
(New Segment Structure) |
|
|
2021 Chg vs |
|||||||||||||||||
|
|
|
|
|
|
Low |
|
High |
|
|||||||||||||||||||
Sales: | Sales: |
|
||||||||||||||||||||||||||
Commercial/Industrial |
$ |
950 |
|
$ |
(144 |
) |
$ |
(67 |
) |
$ |
738 |
|
Aerospace & Industrial |
$ |
745 |
|
$ |
760 |
|
1 - 3% |
||||||||
Defense |
|
736 |
|
|
(125 |
) |
|
- |
|
|
611 |
|
Defense Electronics |
|
740 |
|
|
755 |
|
21 - 24% |
||||||||
Power |
|
708 |
|
|
269 |
|
|
(26 |
) |
|
951 |
|
Naval & Power |
|
960 |
|
|
980 |
|
1 - 3% |
||||||||
Total sales |
$ |
2,393 |
|
$ |
- |
|
$ |
(93 |
) |
$ |
2,300 |
|
Total sales |
$ |
2,445 |
|
$ |
2,495 |
|
6 to 8% |
||||||||
|
||||||||||||||||||||||||||||
Operating income: | Operating income: |
|
||||||||||||||||||||||||||
Commercial/Industrial |
$ |
138 |
|
$ |
(24 |
) |
$ |
(16 |
) |
$ |
98 |
|
Aerospace & Industrial |
$ |
112 |
|
$ |
115 |
|
14 - 18% |
||||||||
Defense |
|
166 |
|
|
(22 |
) |
|
- |
|
|
144 |
|
Defense Electronics |
|
157 |
|
|
162 |
|
9 - 12% |
||||||||
Power |
|
125 |
|
|
46 |
|
|
- |
|
|
171 |
|
Naval & Power |
|
172 |
|
|
177 |
|
1 - 4% |
||||||||
Total segments |
|
429 |
|
|
- |
|
|
(16 |
) |
|
413 |
|
Total segments |
|
441 |
|
|
454 |
|
|
||||||||
Corporate and other |
|
(38 |
) |
|
- |
|
|
- |
|
|
(38 |
) |
Corporate and other |
|
(38 |
) |
|
(39 |
) |
|
||||||||
Total operating income |
$ |
391 |
|
$ |
- |
|
$ |
(16 |
) |
$ |
375 |
|
Total operating income |
$ |
404 |
|
$ |
414 |
|
7 to 10% |
||||||||
|
||||||||||||||||||||||||||||
Interest expense |
$ |
(36 |
) |
$ |
- |
|
$ |
- |
|
$ |
(36 |
) |
Interest expense |
$ |
(41 |
) |
$ |
(42 |
) |
|
||||||||
Other income, net |
|
21 |
|
|
- |
|
|
- |
|
|
21 |
|
Other income, net |
|
15 |
|
|
17 |
|
|
||||||||
Earnings before income taxes |
|
377 |
|
|
- |
|
|
(16 |
) |
|
361 |
|
Earnings before income taxes |
|
378 |
|
|
389 |
|
|
||||||||
Provision for income taxes |
|
(88 |
) |
|
- |
|
|
4 |
|
|
(85 |
) |
Provision for income taxes |
|
(89 |
) |
|
(92 |
) |
|
||||||||
Net earnings |
$ |
289 |
|
$ |
- |
|
$ |
(12 |
) |
$ |
277 |
|
Net earnings |
$ |
290 |
|
$ |
298 |
|
|
||||||||
|
||||||||||||||||||||||||||||
Diluted earnings per share |
$ |
6.87 |
|
$ |
- |
|
$ |
(0.29 |
) |
$ |
6.59 |
|
Diluted earnings per share |
$ |
7.00 |
|
$ |
7.20 |
|
6 to 9% |
||||||||
Diluted shares outstanding |
|
42.0 |
|
|
42.0 |
|
Diluted shares outstanding |
|
41.4 |
|
|
41.4 |
|
|
||||||||||||||
Effective tax rate |
|
23.4 |
% |
|
23.4 |
% |
Effective tax rate |
|
23.5 |
% |
|
23.5 |
% |
|
||||||||||||||
|
||||||||||||||||||||||||||||
Operating margins: | Operating margins: |
|
||||||||||||||||||||||||||
Commercial/Industrial |
|
14.5 |
% |
|
NM |
|
|
NM |
|
|
13.3 |
% |
Aerospace & Industrial |
|
15.0 |
% |
|
15.2 |
% |
170 to 190 bps |
||||||||
Defense |
|
22.6 |
% |
|
NM |
|
|
NM |
|
|
23.6 |
% |
Defense Electronics |
|
21.2 |
% |
|
21.4 |
% |
(220 to 240 bps) |
||||||||
Power |
|
17.6 |
% |
|
NM |
|
|
NM |
|
|
18.0 |
% |
Naval & Power |
|
18.0 |
% |
|
18.1 |
% |
0 to 10 bps |
||||||||
Total operating margin |
|
16.3 |
% |
|
NM |
|
|
NM |
|
|
16.3 |
% |
Total operating margin |
|
16.5 |
% |
|
16.6 |
% |
20 to 30 bps |
||||||||
|
||||||||||||||||||||||||||||
Free cash flow (5) |
$ |
394 |
|
$ |
- |
|
$ |
- |
|
$ |
394 |
|
Free cash flow |
$ |
330 |
|
$ |
360 |
|
|
||||||||
|
||||||||||||||||||||||||||||
Notes: |
|
|||||||||||||||||||||||||||
(1) Full year amounts may not add due to rounding |
||||||||||||||||||||||||||||
(2) The above supplemental financial information by reportable segment for the 2020 and 2021 reporting periods reflects the Corporation’s first quarter 2021 segment reorganization. |
||||||||||||||||||||||||||||
(3) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, and one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 financial results excludes our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020. |
||||||||||||||||||||||||||||
(4) 2021 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding the first quarter 2021 segment reorganization, our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, and a one-time, $3 million pension settlement charge related to the retirement of two former executives (within non-operating income). |
||||||||||||||||||||||||||||
(5) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG. |
CURTISS-WRIGHT CORPORATION | ||||||||||||||||||||||||||||||
2021 Guidance (New Segment Structure) | ||||||||||||||||||||||||||||||
As of February 24, 2021 | ||||||||||||||||||||||||||||||
($'s in millions, except per share data) | ||||||||||||||||||||||||||||||
2020 Adjusted (1,3) (Non-GAAP) |
2021 Reported Guidance (GAAP) |
Exiting Non- Core Operations |
2021 Adjustments (2) (Non-GAAP) |
2021 Adjusted Guidance (2) (Non-GAAP) |
||||||||||||||||||||||||||
Low | High | Low | High | 2021 Chg vs 2020 Adjusted |
||||||||||||||||||||||||||
Sales: | ||||||||||||||||||||||||||||||
Aerospace & Industrial |
$ |
738 |
|
$ |
759 |
|
$ |
774 |
|
$ |
(14 |
) |
$ |
- |
|
$ |
745 |
|
$ |
760 |
|
1 - 3% |
||||||||
Defense Electronics |
|
611 |
|
|
740 |
|
|
755 |
|
|
- |
|
|
- |
|
|
740 |
|
|
755 |
|
21 - 24% |
||||||||
Naval & Power |
|
951 |
|
|
991 |
|
|
1,011 |
|
|
(31 |
) |
|
- |
|
|
960 |
|
|
980 |
|
1 - 3% |
||||||||
Total sales |
$ |
2,300 |
|
$ |
2,490 |
|
$ |
2,540 |
|
$ |
(45 |
) |
$ |
- |
|
$ |
2,445 |
|
$ |
2,495 |
|
6 to 8% |
||||||||
|
||||||||||||||||||||||||||||||
Operating income: |
|
|||||||||||||||||||||||||||||
Aerospace & Industrial |
$ |
98 |
|
$ |
114 |
|
$ |
117 |
|
$ |
(2 |
) |
$ |
- |
|
$ |
112 |
|
$ |
115 |
|
14 - 18% |
||||||||
Defense Electronics |
|
144 |
|
|
151 |
|
|
156 |
|
|
- |
|
|
6 |
|
|
157 |
|
|
162 |
|
9 - 12% |
||||||||
Naval & Power |
|
171 |
|
|
174 |
|
|
179 |
|
|
(2 |
) |
|
- |
|
|
172 |
|
|
177 |
|
1 - 4% |
||||||||
Total segments |
|
413 |
|
|
439 |
|
|
452 |
|
|
(4 |
) |
|
6 |
|
|
441 |
|
|
454 |
|
|
||||||||
Corporate and other |
|
(38 |
) |
|
(38 |
) |
|
(39 |
) |
|
- |
|
|
- |
|
|
(38 |
) |
|
(39 |
) |
|
||||||||
Total operating income |
$ |
375 |
|
$ |
402 |
|
$ |
412 |
|
$ |
(4 |
) |
$ |
6 |
|
$ |
404 |
|
$ |
414 |
|
7 to 10% |
||||||||
|
||||||||||||||||||||||||||||||
Interest expense |
$ |
(36 |
) |
$ |
(41 |
) |
$ |
(42 |
) |
$ |
- |
|
$ |
- |
|
$ |
(41 |
) |
$ |
(42 |
) |
|
||||||||
Other income, net |
|
21 |
|
|
12 |
|
|
13 |
|
|
- |
|
|
3 |
|
|
15 |
|
|
17 |
|
|
||||||||
Earnings before income taxes |
|
361 |
|
|
373 |
|
|
384 |
|
|
(4 |
) |
|
9 |
|
|
378 |
|
|
389 |
|
|
||||||||
Provision for income taxes |
|
(85 |
) |
|
(87 |
) |
|
(90 |
) |
|
1 |
|
|
(2 |
) |
|
(89 |
) |
|
(92 |
) |
|
||||||||
Net earnings |
$ |
277 |
|
$ |
286 |
|
$ |
294 |
|
$ |
(3 |
) |
$ |
7 |
|
$ |
290 |
|
$ |
298 |
|
|
||||||||
|
||||||||||||||||||||||||||||||
Diluted earnings per share |
$ |
6.59 |
|
$ |
6.90 |
|
$ |
7.10 |
|
$ |
(0.07 |
) |
$ |
0.17 |
|
$ |
7.00 |
|
$ |
7.20 |
|
6 to 9% |
||||||||
Diluted shares outstanding |
|
42.0 |
|
|
41.4 |
|
|
41.4 |
|
|
41.4 |
|
|
41.4 |
|
|
||||||||||||||
Effective tax rate |
|
23.4 |
% |
|
23.5 |
% |
|
23.5 |
% |
|
23.5 |
% |
|
23.5 |
% |
|
||||||||||||||
|
||||||||||||||||||||||||||||||
Operating margins: |
|
|||||||||||||||||||||||||||||
Aerospace & Industrial |
|
13.3 |
% |
|
15.0 |
% |
|
15.1 |
% |
+10 bps |
|
- |
|
|
15.0 |
% |
|
15.2 |
% |
170 to 190 bps |
||||||||||
Defense Electronics |
|
23.6 |
% |
|
20.4 |
% |
|
20.6 |
% |
|
- |
|
+80 bps |
|
21.2 |
% |
|
21.4 |
% |
(220 to 240 bps) |
||||||||||
Naval & Power |
|
18.0 |
% |
|
17.6 |
% |
|
17.7 |
% |
+40 bps |
|
- |
|
|
18.0 |
% |
|
18.1 |
% |
0 to 10 bps |
||||||||||
Total operating margin |
|
16.3 |
% |
|
16.1 |
% |
|
16.2 |
% |
+20 bps | +20 bps |
|
16.5 |
% |
|
16.6 |
% |
20 to 30 bps |
||||||||||||
Free cash flow |
$ |
394 |
|
$ |
330 |
|
$ |
360 |
|
|
- |
|
|
- |
|
$ |
330 |
|
$ |
360 |
|
|||||||||
Notes: Full year amounts may not add due to rounding. All financial information by reportable segment for the 2020 and 2021 reporting periods reflects the Corporation’s first quarter 2021 segment reorganization. | ||||||||||||||||||||||||||||||
(1) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, and one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 financial results excludes our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020. | ||||||||||||||||||||||||||||||
(2) 2021 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, and a one-time, $3 million pension settlement charge related to the retirement of two former executives (within non-operating income). | ||||||||||||||||||||||||||||||
(3) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG. |
CURTISS-WRIGHT CORPORATION | ||
2021 Sales Growth Guidance by End Market | ||
As of February 24, 2021 | ||
Aerospace & Defense Markets |
2021 % Change vs 2020 |
|
Aerospace Defense |
2 - 4% |
|
Ground Defense |
100 - 105% |
|
Naval Defense |
Flat |
|
Commercial Aerospace |
Flat |
|
Total Aerospace & Defense |
6 - 8% |
|
|
||
Commercial Markets |
|
|
Power & Process |
3 - 5% |
|
General Industrial |
9 - 11% |
|
Total Commercial |
6 - 8% |
|
|
||
Total Curtiss-Wright Sales |
6 - 8% |
|
Notes: | ||
(1) This table reflects the Company's new End Market Structure and Realignment effective Q1 2021, with all Commercial Aerospace market revenues shifting into a newly defined Total Aerospace & Defense market. | ||
(2) The new Power & Process end market will be comprised of a) Nuclear and b) Process, while the new General Industrial end market will now be comprised of a) Industrial Vehicles and b) Industrial Automation and Services. | ||
(3) Based on these changes, our new Power & Process revenues will be concentrated within the new Naval & Power segment, and the new General Industrial sales will be concentrated within the new Aerospace & Industrial segment. |
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES | ||||||||||||||||||||
ADJUSTED HISTORICAL SEGMENT INFORMATION (UNAUDITED) | ||||||||||||||||||||
($'s in thousands) | ||||||||||||||||||||
The Corporation is issuing the below supplemental financial information by reportable segment for the 2020 and 2019 prior quarterly reporting periods to reflect the Corporation's first quarter 2021 segment reorganization. | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | FY 2020 | ||||||||||||||||
Sales: | ||||||||||||||||||||
Aerospace & Industrial |
$ |
208,033 |
|
$ |
165,701 |
|
$ |
172,243 |
|
$ |
192,214 |
|
$ |
738,191 |
|
|||||
Defense Electronics |
|
139,582 |
|
|
139,813 |
|
|
149,073 |
|
|
182,173 |
|
|
610,641 |
|
|||||
Naval & Power |
|
228,048 |
|
|
227,189 |
|
|
228,626 |
|
|
267,079 |
|
|
950,943 |
|
|||||
Total sales |
$ |
575,663 |
|
$ |
532,703 |
|
$ |
549,942 |
|
$ |
641,466 |
|
$ |
2,299,774 |
|
|||||
Operating income (expense): | ||||||||||||||||||||
Aerospace & Industrial |
$ |
28,420 |
|
$ |
12,798 |
|
$ |
22,898 |
|
$ |
33,718 |
|
$ |
97,835 |
|
|||||
Defense Electronics |
|
26,840 |
|
|
33,545 |
|
|
38,649 |
|
|
45,337 |
|
|
144,372 |
|
|||||
Naval & Power |
|
33,499 |
|
|
38,324 |
|
|
42,002 |
|
|
57,041 |
|
|
170,866 |
|
|||||
Total segments |
$ |
88,760 |
|
$ |
84,668 |
|
$ |
103,549 |
|
$ |
136,096 |
|
$ |
413,073 |
|
|||||
Corporate and other |
|
(11,816 |
) |
|
(8,114 |
) |
|
(7,740 |
) |
|
(9,908 |
) |
|
(37,579 |
) |
|||||
Total operating income |
$ |
76,943 |
|
$ |
76,554 |
|
$ |
95,809 |
|
$ |
126,188 |
|
$ |
375,494 |
|
|||||
Operating margins: | ||||||||||||||||||||
Aerospace & Industrial |
|
13.7 |
% |
|
7.7 |
% |
|
13.3 |
% |
|
17.5 |
% |
|
13.3 |
% |
|||||
Defense Electronics |
|
19.2 |
% |
|
24.0 |
% |
|
25.9 |
% |
|
24.9 |
% |
|
23.6 |
% |
|||||
Naval & Power |
|
14.7 |
% |
|
16.9 |
% |
|
18.4 |
% |
|
21.4 |
% |
|
18.0 |
% |
|||||
Total Curtiss-Wright |
|
13.4 |
% |
|
14.4 |
% |
|
17.4 |
% |
|
19.7 |
% |
|
16.3 |
% |
|||||
Segment margins |
|
15.4 |
% |
|
15.9 |
% |
|
18.8 |
% |
|
21.2 |
% |
|
18.0 |
% |
|||||
Three Months Ended | ||||||||||||||||||||
3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | FY 2019 | ||||||||||||||||
Sales: | ||||||||||||||||||||
Aerospace & Industrial |
$ |
215,219 |
|
$ |
230,304 |
|
$ |
218,066 |
|
$ |
228,887 |
|
$ |
892,477 |
|
|||||
Defense Electronics |
|
110,301 |
|
|
133,709 |
|
|
134,965 |
|
|
146,468 |
|
|
525,442 |
|
|||||
Naval & Power |
|
229,406 |
|
|
247,971 |
|
|
233,412 |
|
|
250,100 |
|
|
960,888 |
|
|||||
Total sales |
$ |
554,926 |
|
$ |
611,983 |
|
$ |
586,443 |
|
$ |
625,455 |
|
$ |
2,378,807 |
|
|||||
Operating income (expense): | ||||||||||||||||||||
Aerospace & Industrial |
$ |
26,628 |
|
$ |
38,736 |
|
$ |
30,109 |
|
$ |
33,510 |
|
$ |
128,984 |
|
|||||
Defense Electronics |
|
16,864 |
|
|
28,511 |
|
|
36,407 |
|
|
39,353 |
|
|
121,136 |
|
|||||
Naval & Power |
|
34,989 |
|
|
45,598 |
|
|
41,643 |
|
|
51,826 |
|
|
174,057 |
|
|||||
Total segments |
$ |
78,482 |
|
$ |
112,845 |
|
$ |
108,160 |
|
$ |
124,689 |
|
$ |
424,176 |
|
|||||
Corporate and other |
|
(9,115 |
) |
|
(10,314 |
) |
|
(6,917 |
) |
|
(8,441 |
) |
|
(34,787 |
) |
|||||
Total operating income |
$ |
69,367 |
|
$ |
102,530 |
|
$ |
101,243 |
|
$ |
116,248 |
|
$ |
389,389 |
|
|||||
Operating margins: | ||||||||||||||||||||
Aerospace & Industrial |
|
12.4 |
% |
|
16.8 |
% |
|
13.8 |
% |
|
14.6 |
% |
|
14.5 |
% |
|||||
Defense Electronics |
|
15.3 |
% |
|
21.3 |
% |
|
27.0 |
% |
|
26.9 |
% |
|
23.1 |
% |
|||||
Naval & Power |
|
15.3 |
% |
|
18.4 |
% |
|
17.8 |
% |
|
20.7 |
% |
|
18.1 |
% |
|||||
Total Curtiss-Wright |
|
12.5 |
% |
|
16.8 |
% |
|
17.3 |
% |
|
18.6 |
% |
|
16.4 |
% |
|||||
Segment margins |
|
14.1 |
% |
|
18.4 |
% |
|
18.4 |
% |
|
19.9 |
% |
|
17.8 |
% |
|||||
Notes: Full year amounts may not add due to rounding. |
About Curtiss-Wright Corporation
Curtiss-Wright Corporation (NYSE: CW) is a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing reliable solutions through trusted customer relationships. The company employs approximately 8,200 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, future cash flow from operations, and potential impacts of the COVID-19 pandemic are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act") and 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; the impact of a global pandemic or national epidemic, 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, 2019, and subsequent reports filed with the Securities and Exchange Commission.
This press release and additional information are available at www.curtisswright.com.
Jim Ryan
(704) 869-4621
Jim.Ryan@curtisswright.com
DAVIDSON, N.C.--(BUSINESS WIRE)--February 24, 2021--Curtiss-Wright Corporation (NYSE: CW) today announced that Kevin M. Rayment, currently President of the Commercial / Industrial Segment, will be named Chief Operating Officer following Thomas (Tom) P. Quinly’s planned retirement as Vice President and COO on April 1, 2021.
"I am pleased to announce the promotion of Kevin Rayment as Curtiss-Wright's next Chief Operating Officer,” said Lynn M. Bamford, President and CEO of Curtiss-Wright Corporation. “He continues to play a key role in executing our strategic growth initiatives, delivering significant financial performance and integrating acquisitions. Most recently, he led the Commercial / Industrial Segment in an exemplary fashion in extremely challenging circumstances in 2020. I look forward to continuing to work closely with Kevin and remain confident that his agility and consistent track record will allow him to carry out the Company’s profitable growth strategy and drive further success for Curtiss-Wright.”
Bamford continued, “We are deeply grateful for Tom’s leadership and his many contributions to Curtiss-Wright over the past 16 years. He has been an instrumental part of the Corporation’s success, including driving significant operating margin expansion to enable Curtiss-Wright to reach the top quartile of its peer group, overseeing the successful acquisition and integration of more than 20 businesses, establishing and developing several low cost economy manufacturing Centers of Excellence (COEs), and leading the Human Resources transformation to a world class benchmark. We will miss his energy and passion for Curtiss-Wright.”
Quinly said, “I am honored to have been a part of some great accomplishments in Curtiss-Wright’s storied history, particularly our evolution and drive for operational excellence and discipline to achieve top quartile financial performance. I would like to thank the team for their hard work and dedication, and I look forward to the Company’s continued growth and successes.”
Executive Chairman David C. Adams commented, “On behalf of the Board of Directors, I would like to thank Tom for his knowledge, resourcefulness and steadfast dedication to drive Curtiss-Wright to new levels of distinction in margin expansion and operational excellence. During his successful tenure as COO, the Company achieved top quartile financial performance compared with our peer group. It has been a pleasure to work with such a great friend and colleague, and I wish him a happy retirement.”
Mr. Rayment will report directly to President and Chief Executive Officer Lynn M. Bamford. Reporting to Mr. Rayment will be the Vice President / General Managers of the Company’s operating divisions.
Mr. Rayment, 52, has more than 30 years of experience across the commercial, general industrial, aerospace, nuclear and defense industries. He joined Curtiss-Wright’s UK-based Penny & Giles business in 2004, which Curtiss-Wright had acquired in 2002, and held the role of Managing Director, Integrating Sensing, within the Company’s former Controls segment. He later ascended to Vice President and General Manager of the Company’s Avionics & Industrial business, before he was named to lead the Industrial division in 2013. In this position, he had overall responsibility for the division’s strategic goals, new product development, global operations and financial performance, and enhanced the global product portfolio with the integration of 6 acquisitions. Previously, he held engineering, marketing and sales positions with various aerospace and industrial companies.
Mr. Rayment holds a BEng (Hons) Electrical & Electronics Engineering Degree from Portsmouth University and a Master of Business Administration Degree from Bournemouth University.
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 8,200 people worldwide. For more information, visit www.curtisswright.com.
Jim Ryan
(704) 869-4621
jim.ryan@curtisswright.com
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