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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Curtiss Wright Corp | NYSE:CW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 268.98 | 18 | 09:01:11 |
Curtiss-Wright Corporation (NYSE: CW) reports financial results for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights:
Raised Full-Year 2024 Financial Guidance:
“Curtiss-Wright delivered strong first quarter 2024 results, exceeding our overall expectations, highlighted by significant growth in sales and operating income, continued operating margin expansion, and diluted EPS of $1.99, which increased 30% year-over-year,” said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. “Our results included a very strong performance in the Defense Electronics segment, which was partially offset by reduced profitability in the Naval & Power segment, principally related to a naval contract adjustment that impacted both the first quarter and full-year outlook for this segment.”
“Based upon our strong overall start to the year and the continued strength in our order book, we have increased our full-year 2024 sales, operating income and diluted EPS guidance as we continue to successfully execute on our Pivot to Growth strategy. We now expect to deliver total sales growth of 5% to 7%, including the contribution from our recent commercial nuclear acquisition of WSC, Inc., continued operating margin expansion while increasing R&D investments, and diluted EPS growth of 8% to 11%, while we maintain our outlook for strong free cash flow conversion well in excess of 100%. We look forward to discussing our alignment with the favorable secular growth trends driving our end markets and our new long-term financial targets at our upcoming investor day on May 21st.”
First Quarter 2024 Operating Results
(In millions)
Q1-2024
Q1-2023
Change
Reported
Sales
$
713
$
631
13
%
Operating income
$
100
$
79
27
%
Operating margin
14.0
%
12.5
%
150 bps
Adjusted (1)
Sales
$
713
$
631
13
%
Operating income
$
100
$
81
23
%
Operating margin
14.0
%
12.9
%
110 bps
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.
First Quarter 2024 Segment Performance
Aerospace & Industrial
(In millions)
Q1-2024
Q1-2023
Change
Reported
Sales
$
219
$
202
8
%
Operating income
$
27
$
27
3
%
Operating margin
12.5
%
13.1
%
(60 bps)
Adjusted (1)
Sales
$
219
$
202
8
%
Operating income
$
27
$
27
3
%
Operating margin
12.5
%
13.1
%
(60 bps)
(1) Note: There were no adjustments to segment operating results.
Defense Electronics
(In millions)
Q1-2024
Q1-2023
Change
Reported
Sales
$
212
$
162
31
%
Operating income
$
48
$
23
106
%
Operating margin
22.7
%
14.4
%
830 bps
Adjusted (1)
Sales
$
212
$
162
31
%
Operating income
$
48
$
23
106
%
Operating margin
22.7
%
14.4
%
830 bps
(1) Note: There were no adjustments to segment operating results.
Naval & Power
(In millions)
Q1-2024
Q1-2023
Change
Reported
Sales
$
282
$
266
6
%
Operating income
$
35
$
38
(7
%)
Operating margin
12.5
%
14.3
%
(180 bps)
Adjusted (1)
Sales
$
282
$
266
6
%
Operating income
$
35
$
41
(13
%)
Operating margin
12.5
%
15.3
%
(280 bps)
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.
Free Cash Flow
(In millions)
Q1-2024
Q1-2023
Change
Net cash used for operating activities
$
(46
)
$
(92
)
50
%
Capital expenditures
(12
)
(11
)
(13
%)
Reported free cash flow
$
(58
)
$
(102
)
44
%
Adjusted free cash flow (1)
$
(58
)
$
(92
)
37
%
(1) A reconciliation of Reported to Adjusted free cash flow is available in the Appendix.
New Orders and Backlog
Share Repurchase and Dividends
Full-Year 2024 Guidance
The Company is increasing its full-year 2024 Adjusted financial guidance (1) as follows:
($ In millions, except EPS)
2024 Adjusted Non-GAAP Guidance (Prior)
2024 Adjusted Non-GAAP Guidance (Current)
Change vs 2023 Adjusted (Current)
Total Sales
$2,960 - $3,010
$2,985 - $3,035
Up 5% - 7%
Operating Income
$514 - $528
$518 - $533
Up 5% - 8%
Operating Margin
17.4% - 17.6%
17.4% - 17.6%
Up 0 - 20 bps
Diluted EPS
$10.00 - $10.30
$10.10 - $10.40
Up 8% - 11%
Free Cash Flow
$415 - $435
$415 - $435
Up 0% - 5%
(1) Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix.
**********
A more detailed breakdown of the Company’s 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright’s website.
Conference Call & Webcast Information
The Company will host a conference call to discuss its first quarter 2024 financial results and business outlook at 10:00 a.m. ET on Thursday, May 2, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.
(Tables to Follow)
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
($'s in thousands, except per share data)
Three Months Ended
March 31,
2024
2023
Product sales
$
595,704
$
524,881
Service sales
117,463
105,979
Total net sales
713,167
630,860
Cost of product sales
389,477
343,757
Cost of service sales
69,935
65,695
Total cost of sales
459,412
409,452
Gross profit
253,755
221,408
Research and development expenses
22,980
22,024
Selling expenses
36,765
32,425
General and administrative expenses
94,049
88,344
Operating income
99,961
78,615
Interest expense
10,570
12,944
Other income, net
9,608
7,767
Earnings before income taxes
98,999
73,438
Provision for income taxes
(22,504
)
(16,592
)
Net earnings
$
76,495
$
56,846
Net earnings per share:
Basic earnings per share
$
2.00
$
1.48
Diluted earnings per share
$
1.99
$
1.48
Dividends per share
$
0.20
$
0.19
Weighted average shares outstanding:
Basic
38,254
38,303
Diluted
38,431
38,516
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($'s in thousands, except par value)
March 31,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
338,034
$
406,867
Receivables, net
776,662
732,678
Inventories, net
553,037
510,033
Other current assets
69,483
67,502
Total current assets
1,737,216
1,717,080
Property, plant, and equipment, net
329,347
332,796
Goodwill
1,552,343
1,558,826
Other intangible assets, net
542,335
557,612
Operating lease right-of-use assets, net
133,846
141,435
Prepaid pension asset
267,334
261,869
Other assets
49,661
51,351
Total assets
$
4,612,082
$
4,620,969
Liabilities
Current liabilities:
Current portion of long-term debt
$
90,000
$
—
Accounts payable
233,818
243,833
Accrued expenses
158,089
188,039
Deferred revenue
297,545
303,872
Other current liabilities
78,823
70,800
Total current liabilities
858,275
806,544
Long-term debt, net
960,009
1,050,362
Deferred tax liabilities
128,000
132,319
Accrued pension and other postretirement benefit costs
67,446
66,875
Long-term operating lease liability
111,981
118,611
Long-term portion of environmental reserves
13,439
12,784
Other liabilities
92,753
105,061
Total liabilities
$
2,231,903
$
2,292,556
Stockholders' equity
Common stock, $1 par value
$
49,187
$
49,187
Additional paid in capital
133,166
140,182
Retained earnings
3,556,572
3,487,751
Accumulated other comprehensive loss
(228,255
)
(213,223
)
Less: cost of treasury stock
(1,130,491
)
(1,135,484
)
Total stockholders' equity
2,380,179
2,328,413
Total liabilities and stockholders' equity
$
4,612,082
$
4,620,969
Use and Definitions of Non-GAAP Financial Information (Unaudited)
The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.
The following definitions are provided:
Adjusted Sales, Operating Income, Operating Margin, Net Earnings and Diluted EPS
These Adjusted financials are defined as Reported Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; and (ii) the sale or divestiture of a business or product line, as applicable.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)
($'s in thousands)
Three Months Ended
Three Months Ended
March 31, 2024
March 31, 2023
% Change
As Reported
Adjustments
Adjusted
As Reported
Adjustments
Adjusted
Reported
Adjusted
Sales:
Aerospace & Industrial
$
219,325
$
—
$
219,325
$
202,447
$
—
$
202,447
8
%
8
%
Defense Electronics
211,741
—
211,741
162,154
—
162,154
31
%
31
%
Naval & Power
282,101
—
282,101
266,259
—
266,259
6
%
6
%
Total sales
$
713,167
$
—
$
713,167
$
630,860
$
—
$
630,860
13
%
13
%
Operating income (expense):
Aerospace & Industrial
$
27,466
$
—
$
27,466
$
26,545
$
—
$
26,545
3
%
3
%
Defense Electronics
48,081
—
48,081
23,368
—
23,368
106
%
106
%
Naval & Power (1)
35,191
—
35,191
37,937
2,676
40,613
(7
)%
(13
)%
Total segments
$
110,738
$
—
$
110,738
$
87,850
$
2,676
$
90,526
26
%
22
%
Corporate and other
(10,777
)
—
(10,777
)
(9,235
)
—
(9,235
)
(17
)%
(17
)%
Total operating income
$
99,961
$
—
$
99,961
$
78,615
$
2,676
$
81,291
27
%
23
%
Operating margins:
As Reported
Adjusted
As Reported
Adjusted
Reported
Adjusted
Aerospace & Industrial
12.5
%
12.5
%
13.1
%
13.1
%
(60 bps)
(60 bps)
Defense Electronics
22.7
%
22.7
%
14.4
%
14.4
%
830 bps
830 bps
Naval & Power
12.5
%
12.5
%
14.3
%
15.3
%
(180 bps)
(280 bps)
Total Curtiss-Wright
14.0
%
14.0
%
12.5
%
12.9
%
150 bps
110 bps
Segment margins
15.5
%
15.5
%
13.9
%
14.3
%
160 bps
120 bps
(1) Excludes first year purchase accounting adjustments.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED SALES TO ADJUSTED SALES BY END MARKET (UNAUDITED)
($'s in thousands)
Three Months Ended
Three Months Ended
March 31, 2024
March 31, 2023
2024 vs. 2023
Reported Sales
Adjustments
Adjusted Sales
Reported Sales
Adjustments
Adjusted Sales
Change in Reported Sales
Change in Adjusted Sales
Aerospace & Defense markets:
Aerospace Defense
$
132,074
$
—
$
132,074
$
99,879
$
—
$
99,879
32
%
32
%
Ground Defense
90,760
—
90,760
66,256
—
66,256
37
%
37
%
Naval Defense
177,647
—
177,647
171,956
—
171,956
3
%
3
%
Commercial Aerospace
89,775
—
89,775
70,490
—
70,490
27
%
27
%
Total Aerospace & Defense
$
490,256
$
—
$
490,256
$
408,581
$
—
$
408,581
20
%
20
%
Commercial markets:
Power & Process
124,039
—
124,039
120,339
—
120,339
3
%
3
%
General Industrial
98,872
—
98,872
101,940
—
101,940
(3
%)
(3
%)
Total Commercial
$
222,911
$
—
$
222,911
$
222,279
$
—
$
222,279
0
%
0
%
Total Curtiss-Wright
$
713,167
$
—
$
713,167
$
630,860
$
—
$
630,860
13
%
13
%
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED)
Three Months Ended
March 31,
2024
2023
Diluted earnings per share - As Reported
$
1.99
$
1.48
First year purchase accounting adjustments
—
0.05
Diluted earnings per share - Adjusted (1)
$
1.99
$
1.53
(1) All adjustments are presented net of income taxes.
Organic Sales and Organic Operating Income
The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income, excluding contributions from acquisitions and results of operations from divested businesses or product lines during the last twelve months, and foreign currency fluctuations.
Three Months Ended
March 31,
2024 vs. 2023
Aerospace & Industrial
Defense Electronics
Naval & Power
Total Curtiss-Wright
Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income
As Reported
8%
3%
31%
106%
6%
(7%)
13%
27%
Less: Acquisitions
0%
0%
0%
0%
0%
0%
0%
0%
Foreign Currency
0%
2%
(1%)
0%
0%
0%
0%
1%
Organic
8%
5%
30%
106%
6%
(7%)
13%
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 net cash provided by operating activities less capital expenditures. Adjusted free cash flow excludes: (i) payments associated with the Westinghouse legal settlement in the prior year period. The Corporation discloses adjusted free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as adjusted free cash flow divided by adjusted net earnings.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NON-GAAP FINANCIAL DATA (UNAUDITED)
($'s in thousands)
Three Months Ended
March 31,
2024
2023
Net cash used for operating activities
$
(45,633
)
$
(91,599
)
Capital expenditures
(12,055
)
(10,661
)
Free cash flow
$
(57,688
)
$
(102,260
)
Westinghouse legal settlement
—
10,000
Adjusted free cash flow
$
(57,688
)
$
(92,260
)
Adjusted free cash flow conversion
(75
%)
(157
%)
CURTISS-WRIGHT CORPORATION
2024 Guidance
As of May 1, 2024
($'s in millions, except per share data)
2023 Reported (GAAP)
2023 Adjustments (Non-GAAP)(1,2)
2023 Adjusted (Non-GAAP)(1)
2024 Reported Guidance (GAAP)
2024 Adjustments (Non-GAAP)
2024 Adjusted Guidance (Non-GAAP)
Low
High
Low
High
Chg vs 2023 Adjusted
Sales:
Aerospace & Industrial
$
887
$
—
$
887
$
915
$
930
$
—
$
915
$
930
3 - 5%
Defense Electronics
816
—
816
882
897
—
882
897
8 - 10%
Naval & Power
1,142
—
1,142
1,188
1,208
—
1,188
1,208
4 - 6%
Total sales
$
2,845
$
—
$
2,845
$
2,985
$
3,035
$
—
$
2,985
$
3,035
5 to 7%
Operating income:
Aerospace & Industrial
$
145
$
—
$
145
$
152
$
156
$
—
$
152
$
156
5 - 8%
Defense Electronics
192
—
192
212
218
—
212
218
11 - 13%
Naval & Power
189
9
198
192
197
—
192
197
(3) - (1)%
Total segments
526
9
535
556
571
—
556
571
Corporate and other
(42
)
—
(42
)
(38
)
(39
)
—
(38
)
(39
)
Total operating income
$
485
$
9
$
494
$
518
$
533
$
—
$
518
$
533
5 to 8%
Interest expense
$
(51
)
$
—
$
(51
)
$
(44
)
$
(45
)
$
—
$
(44
)
$
(45
)
Other income, net
30
—
30
34
35
—
34
35
Earnings before income taxes
463
9
472
508
524
—
508
524
Provision for income taxes
(109
)
(2
)
(111
)
(119
)
(123
)
—
(119
)
(123
)
Net earnings
$
355
$
6
$
361
$
389
$
400
$
—
$
389
$
400
Diluted earnings per share
$
9.20
$
0.18
$
9.38
$
10.10
$
10.40
$
—
$
10.10
$
10.40
8 to 11%
Diluted shares outstanding
38.5
38.5
38.5
38.5
38.5
38.5
Effective tax rate
23.4
%
23.4
%
23.5
%
23.5
%
23.5
%
23.5
%
Operating margins:
Aerospace & Industrial
16.4
%
16.4
%
16.6
%
16.8
%
16.6
%
16.8
%
20 to 40 bps
Defense Electronics
23.5
%
23.5
%
24.0
%
24.2
%
24.0
%
24.2
%
50 to 70 bps
Naval & Power
16.6
%
17.4
%
16.1
%
16.3
%
16.1
%
16.3
%
(110 to 130 bps)
Total operating margin
17.0
%
17.4
%
17.4
%
17.6
%
17.4
%
17.6
%
0 to 20 bps
Free cash flow
$
403
$
10
$
413
$
415
$
435
$
—
$
415
$
435
0 to 5%
Notes: Full year amounts may not add due to rounding.
(1) 2023 Adjusted financials exclude the impact of first year purchase accounting adjustments.
(2) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2023 Adjusted Free Cash Flow excluded a legal settlement payment of $10 million.
CURTISS-WRIGHT CORPORATION
2024 Sales Growth Guidance by End Market
As of May 1, 2024
2024 % Change vs. 2023 Adjusted
Prior
Current
% Total Sales
Aerospace & Defense Markets
Aerospace Defense
5 - 7%
6 - 8%
20%
Ground Defense
4 - 6%
10 - 12%
11%
Naval Defense
3 - 5%
3 - 5%
25%
Commercial Aerospace
10 - 12%
10 - 12%
12%
Total Aerospace & Defense
5 - 7%
6 - 8%
68%
Commercial Markets
Power & Process
3 - 5%
4 - 6%
18%
General Industrial
1 - 3%
1 - 3%
15%
Total Commercial
2 - 4%
2 - 4%
32%
Total Curtiss-Wright Sales
4 - 6%
5 - 7%
100%
Note: Sales percentages may not add due to rounding.
About Curtiss-Wright Corporation
Curtiss-Wright Corporation (NYSE:CW) is a global integrated business that provides highly engineered products, solutions and services mainly to Aerospace & Defense markets, as well as critical technologies in demanding Commercial Power, Process and Industrial markets. We leverage a workforce of approximately 8,600 highly skilled employees who develop, design and build what we believe are the best engineered solutions to the markets we serve. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing innovative solutions through trusted customer relationships. For more information, visit www.curtisswright.com.
Certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the Company’s acquisitions, and future cash flow from operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements present management's expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments, and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and subsequent reports filed with the Securities and Exchange Commission.
This press release and additional information are available at www.curtisswright.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501724028/en/
Jim Ryan (704) 869-4621 Jim.Ryan@curtisswright.com
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