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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 | |
---|---|---|---|---|---|---|---|---|
2.97 | 0.89% | 338.05 | 338.73 | 335.54 | 338.58 | 129,640 | 20:45:51 |
Curtiss-Wright Corporation (NYSE: CW) reports financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Highlights:
Expansion of Company’s Share Repurchase Authorization:
Full-Year 2021 Adjusted Guidance:
“We delivered strong third quarter results, with double-digit growth in sales and operating income, despite supply chain headwinds, which produced Adjusted diluted EPS of $1.88 and generated strong free cash flow of approximately $100 million,” said Lynn M. Bamford, President and CEO of Curtiss-Wright Corporation. “Our results reflect the continued execution of our operational excellence initiatives and savings generated by our prior year restructuring actions, which drove operating margin expansion that more than offset the $4 million in incremental year-over-year research and development investments to support our long-term organic growth.”
“In addition, we continued to leverage our strong and healthy balance sheet to implement our balanced capital allocation strategy. We firmly delivered on our commitment to drive solid returns to our shareholders by completing the recently announced $200 million opportunistic share repurchase program, and we remain devoted to supporting our organic growth with high quality, strategic acquisitions to drive long-term shareholder value.”
“Looking ahead to the remainder of 2021, while global supply chain disruption continues to impact many businesses, we will continue to work aggressively to mitigate any negative effects on Curtiss-Wright, leveraging the strength and resilience of our combined portfolio, which has provided us with confidence to raise the midpoint of our Adjusted diluted EPS guidance range.”
Third Quarter 2021 Operating Results
(In millions)
Q3-2021
Q3-2020
Change
Reported sales
$
620.6
$
571.6
9
%
Adjustments (1)
(6.8
)
(21.7
)
Adjusted sales (1)
$
613.8
$
549.9
12
%
Reported operating income
$
97.7
$
84.6
15
%
Adjustments (1)
9.9
11.2
Adjusted operating income (1)
$
107.5
$
95.8
12
%
Adjusted operating margin (1)
17.5
%
17.4
%
10 bps
Amounts may not add due to rounding.
(1)
Adjusted results exclude (i) 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 impacting both periods; (ii) first year purchase accounting costs in both periods associated with acquisitions; and (iii) one-time costs associated with the relocation of our DRG business in the Naval & Power segment, and restructuring costs in all segments, which impacted the prior year period.
Free Cash Flow
(In millions)
Q3-2021
Q3-2020
Change
Net cash provided by operating activities
$
107.3
$
56.0
92
%
Capital expenditures
(10.1
)
(7.0
)
(44
%)
Free cash flow (1)
$
97.2
$
49.0
98
%
Adjustment to capital expenditures (DRG facility investment) (2)
-
0.4
-
Restructuring (2)
-
5.9
-
Adjusted free cash flow (2)
$
97.2
$
55.3
76
%
Amounts may not add due to rounding.
(1)
Free cash flow defined as net cash provided by operating activities less capital expenditures
(2)
Adjusted free cash flow excludes a capital investment related to the new state-of-the-art naval facility in the Naval & Power segment and the cash impact from restructuring in the prior year period.
New Orders and Backlog
Share Repurchase and Dividends
Other Items – Business Held for Sale
Third Quarter 2021 Segment Performance
Aerospace & Industrial
(In millions)
Q3-2021
Q3-2020
Change
Reported sales
$
196.3
$
188.8
4
%
Adjustments (1)
(0.4
)
(16.5
)
Adjusted sales (1)
$
195.9
$
172.2
14
%
Reported operating income
$
30.9
$
23.9
29
%
Adjustments (1)
(0.1
)
(1.0
)
Adjusted operating income (1)
$
30.8
$
22.9
34
%
Adjusted operating margin (1)
15.7
%
13.3
%
240 bps
Amounts may not add due to rounding.
(1)
Adjusted results exclude our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited in the fourth quarter of 2020 impacting both periods and restructuring costs in the prior year period.
Defense Electronics
(In millions)
Q3-2021
Q3-2020
Change
Reported sales
$
181.5
$
148.3
22
%
Adjustments (1)
1.1
0.7
Adjusted sales (1)
$
182.6
$
149.1
22
%
Reported operating income
$
40.8
$
35.1
16
%
Adjustments (1)
1.6
3.5
Adjusted operating income (1)
$
42.3
$
38.7
9
%
Adjusted operating margin (1)
23.2
%
25.9
%
(270 bps)
Amounts may not add due to rounding.
(1)
Adjusted results exclude first year purchase accounting costs in both periods associated with acquisitions, and restructuring costs in the prior year period.
Naval & Power
(In millions)
Q3-2021
Q3-2020
Change
Reported sales
$
242.8
$
234.5
4
%
Adjustments (1)
(7.5
)
(5.9
)
Adjusted sales (1)
$
235.3
$
228.6
3
%
Reported operating income
$
35.5
$
33.4
6
%
Adjustments (1)
8.4
8.6
Adjusted operating income (1)
$
43.9
$
42.0
4
%
Adjusted operating margin (1)
18.6
%
18.4
%
20 bps
Amounts may not add due to rounding.
(1)
Adjusted results exclude our German valves business which was classified as held for sale in the fourth quarter of 2020 impacting both periods; and first year purchase accounting costs associated with acquisitions, one-time costs associated with the relocation of our DRG business and restructuring costs, all impacting the prior year period.
Full-Year 2021 Guidance
The Company is updating its full-year 2021 Adjusted financial guidance as follows:
(In millions, except EPS)
2021 Adjusted Non-GAAP Guidance (Prior)
2021 Adjusted Non-GAAP Guidance (Current)
2021 Adjusted Chg vs 2020 Restated
Total Sales
$2,465 - $2,515
$2,465 - $2,515
Up 7% - 9%
Operating Income
$411 - $421
$411 - $421
Up 9% - 12%
Operating Margin
16.7% - 16.8%
16.7% - 16.8%
Up 40 - 50 bps
Interest Expense
$41
$40 - $41
Diluted EPS
$7.15 - $7.35
$7.20 - $7.35
Up 9% - 12%
Diluted Shares Outstanding
41.1
41.0
Free Cash Flow
$330 - $360
$330 - $360
Avg. FCF Conversion
~116%
~116%
(1)
2021 Adjusted financial guidance used in comparisons to 2020 financial results excludes first year purchase accounting costs associated with acquisitions, as well as our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited and our German valves business which was classified as held for sale, both in the fourth quarter of 2020.
A more detailed breakdown of the Company’s 2021 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts can be found in the accompanying schedules. Historical financial results in the new segment structure for 2020 and 2019 periods are available in the Investor Relations section of Curtiss-Wright’s website.
Conference Call & Webcast Information
The Company will host a conference call to discuss third quarter 2021 financial results and updates to 2021 guidance at 10:00 a.m. ET on Thursday, November 4, 2021. A live webcast of the call and the accompanying financial presentation, as well as a replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.
(Tables to Follow)
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
($'s in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Product sales
$
528,339
$
493,398
$
1,552,706
$
1,457,772
Service sales
92,280
78,216
286,467
265,120
Total net sales
620,619
571,614
1,839,173
1,722,892
Cost of product sales
328,424
305,921
989,759
945,886
Cost of service sales
55,187
52,872
177,930
177,580
Total cost of sales
383,611
358,793
1,167,689
1,123,466
Gross profit
237,008
212,821
671,484
599,426
Research and development expenses
21,618
17,587
66,675
54,163
Selling expenses
30,067
24,869
89,227
81,650
General and administrative expenses
78,998
77,251
229,608
230,515
Impairment of assets held for sale
8,656
—
8,656
—
Restructuring expenses
—
8,541
—
20,730
Operating income
97,669
84,573
277,318
212,368
Interest expense
9,955
9,055
30,094
25,059
Other income, net
3,627
5,417
8,910
6,844
Earnings before income taxes
91,341
80,935
256,134
194,153
Provision for income taxes
(21,638
)
(16,315
)
(65,554
)
(46,754
)
Net earnings
$
69,703
$
64,620
$
190,580
$
147,399
Net earnings per share:
Basic earnings per share
$
1.71
$
1.56
$
4.66
$
3.52
Diluted earnings per share
$
1.70
$
1.55
$
4.64
$
3.49
Dividends per share
$
0.18
$
0.17
$
0.53
$
0.51
Weighted average shares outstanding:
Basic
40,769
41,545
40,865
41,926
Diluted
40,950
41,797
41,040
42,190
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($'s in thousands, except par value)
September 30,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
234,416
$
198,248
Receivables, net
670,867
588,718
Inventories, net
433,140
428,879
Assets held for sale
20,215
27,584
Other current assets
65,171
57,395
Total current assets
1,423,809
1,300,824
Property, plant, and equipment, net
360,314
378,200
Goodwill
1,461,313
1,455,137
Other intangible assets, net
552,514
609,630
Operating lease right-of-use assets, net
140,524
150,898
Prepaid pension asset
111,906
92,531
Other assets
32,921
34,114
Total assets
$
4,083,301
$
4,021,334
Liabilities
Current liabilities:
Current portion of long-term and short-term debt
100,000
100,000
Accounts payable
158,196
201,237
Accrued expenses
142,169
146,833
Deferred revenue
249,671
253,411
Liabilities held for sale
13,215
10,141
Other current liabilities
101,892
98,755
Total current liabilities
765,143
810,377
Long-term debt
957,101
958,292
Deferred tax liabilities, net
121,491
115,007
Accrued pension and other postretirement benefit costs
98,122
98,345
Long-term operating lease liability
124,362
133,069
Long-term portion of environmental reserves
15,096
15,422
Other liabilities
101,926
103,248
Total liabilities
2,183,241
2,233,760
Stockholders' equity
Common stock, $1 par value
49,187
49,187
Additional paid in capital
124,532
122,535
Retained earnings
2,839,294
2,670,328
Accumulated other comprehensive loss
(308,810
)
(310,856
)
Less: cost of treasury stock
(804,143
)
(743,620
)
Total stockholders' equity
1,900,060
1,787,574
Total liabilities and stockholders' equity
$
4,083,301
$
4,021,334
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SEGMENT INFORMATION (UNAUDITED)(1)
($'s in thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
Change
Change
2021
2020
%
2021
2020
%
Sales:
Aerospace & Industrial
$
196,296
$
188,768
4
%
$
576,340
$
592,907
(3
%)
Defense Electronics
181,504
148,324
22
%
525,067
427,518
23
%
Naval & Power
242,819
234,522
4
%
737,766
702,467
5
%
Total sales
$
620,619
$
571,614
9
%
$
1,839,173
$
1,722,892
7
%
Operating income (expense):
Aerospace & Industrial
$
30,872
$
23,880
29
%
$
81,874
$
65,635
25
%
Defense Electronics
40,762
35,103
16
%
106,656
83,902
27
%
Naval & Power
35,483
33,367
6
%
116,635
90,623
29
%
Total segments
$
107,117
$
92,350
16
%
$
305,165
$
240,160
27
%
Corporate and other
(9,448
)
(7,777
)
(21
%)
(27,847
)
(27,792
)
0
%
Total operating income
$
97,669
$
84,573
15
%
$
277,318
$
212,368
31
%
Operating margins:
Aerospace & Industrial
15.7
%
12.7
%
300 bps
14.2
%
11.1
%
310 bps
Defense Electronics
22.5
%
23.7
%
(120 bps)
20.3
%
19.6
%
70 bps
Naval & Power
14.6
%
14.2
%
40 bps
15.8
%
12.9
%
290 bps
Total Curtiss-Wright
15.7
%
14.8
%
90 bps
15.1
%
12.3
%
280 bps
Segment margins
17.3
%
16.2
%
110 bps
16.6
%
13.9
%
270 bps
(1) Amounts reported under realigned segment reporting structure.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF REPORTED SALES TO ADJUSTED SALES BY END MARKET (UNAUDITED)
($'s in thousands)
Three Months Ended
Three Months Ended
September 30, 2021
September 30, 2020
2021 vs. 2020
Reported Sales
Adjustments
Adjusted Sales
Reported Sales
Adjustments
Adjusted Sales
Change in Adjusted Sales
Aerospace & Defense markets:
Aerospace Defense (1)
$
116,853
$
—
$
116,853
$
121,987
$
748
$
122,735
(5
%)
Ground Defense (1)
55,124
1,080
56,204
20,519
—
20,519
174
%
Naval Defense
175,800
—
175,800
165,524
—
165,524
6
%
Commercial Aerospace (2)
67,461
(381
)
67,080
70,943
(16,524
)
54,419
23
%
Total Aerospace & Defense
$
415,238
$
699
$
415,937
$
378,973
$
(15,776
)
$
363,197
15
%
Commercial markets:
Power & Process (3)
112,736
(7,472
)
105,264
113,919
(5,896
)
108,023
(3
%)
General Industrial
92,645
—
92,645
78,722
—
78,722
18
%
Total Commercial
205,381
(7,472
)
197,909
192,641
(5,896
)
186,745
6
%
Total Curtiss-Wright
$
620,619
$
(6,773
)
$
613,846
$
571,614
$
(21,672
)
$
549,942
12
%
Nine Months Ended
Nine Months Ended
September 30, 2021
September 30, 2020
2021 vs. 2020
Reported Sales
Adjustments
Adjusted Sales
Reported Sales
Adjustments
Adjusted Sales
Change in Adjusted Sales
Aerospace & Defense markets:
Aerospace Defense (1)
$
327,847
$
—
$
327,847
$
333,120
$
949
$
334,069
(2
%)
Ground Defense (1)
159,090
3,240
162,330
63,205
—
63,205
157
%
Naval Defense
531,429
—
531,429
496,157
—
496,157
7
%
Commercial Aerospace (2)
196,285
(8,764
)
187,521
242,708
(46,929
)
195,779
(4
%)
Total Aerospace & Defense
$
1,214,651
$
(5,524
)
$
1,209,127
$
1,135,190
$
(45,980
)
$
1,089,210
11
%
Commercial markets:
Power & Process (3)
343,573
(20,468
)
323,105
350,632
(18,604
)
332,028
(3
%)
General Industrial
280,949
—
280,949
237,070
—
237,070
19
%
Total Commercial
$
624,522
$
(20,468
)
$
604,054
$
587,702
$
(18,604
)
$
569,098
6
%
Total Curtiss-Wright
$
1,839,173
$
(25,992
)
$
1,813,181
$
1,722,892
$
(64,584
)
$
1,658,308
9
%
(1) Excludes first year purchase accounting adjustments.
(2) Excludes our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited in the fourth quarter of 2020.
(3) Excludes our German valves business which was classified as held for sale in the fourth quarter of 2020.
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 (i) the results of a build-to-print actuation product line supporting the Boeing 737 MAX program which we exited and a German valves business classified as held for sale, both in the fourth quarter of 2020; (ii) significant restructuring costs in 2020 associated with its operations; (iii) a non-cash impairment of capitalized development costs related to a commercial aerospace program in the prior period; (iv) first year purchase accounting costs in both periods associated with its acquisitions, including one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; and (v) one-time transition and IT security costs, and capital investments, specifically associated with the relocation of the DRG business in the Naval & Power segment in the prior period. 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 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 (EPS) under GAAP excluding: (i) the impact of first year purchase accounting costs in both periods associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) one-time transition and IT security costs associated with the relocation of a business in the prior year period; (iii) the non-cash impairment of capitalized development costs related to a commercial aerospace program in the prior year period; (iv) significant restructuring costs in 2020 associated with its operations, (v) a build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, and (vi) the results of a German valves business classified as held for sale in the fourth quarter of 2020.
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
September 30,
2021 vs. 2020
Aerospace & Industrial
Defense Electronics
Naval & Power
Total Curtiss-Wright
Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income
Organic
3%
19%
(3%)
(2%)
3%
11%
1%
7%
Acquisitions
0%
0%
25%
21%
0%
0%
7%
9%
Impairment of assets held for sale
0%
0%
0%
0%
0%
(26%)
0%
(10%)
Restructuring
0%
13%
0%
1%
0%
22%
0%
13%
Foreign Currency
1%
(3%)
0%
(4%)
1%
(1%)
1%
(4%)
Total
4%
29%
22%
16%
4%
6%
9%
15%
Nine Months Ended
September 30,
2021 vs. 2020
Aerospace & Industrial
Defense Electronics
Naval & Power
Total Curtiss-Wright
Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income
Organic
(5%)
12%
(2%)
14%
4%
22%
0%
19%
Acquisitions
0%
0%
25%
16%
0%
0%
6%
6%
Impairment of assets held for sale
0%
0%
0%
0%
0%
(10%)
0%
(4%)
Restructuring
0%
14%
0%
4%
0%
18%
0%
13%
Foreign Currency
2%
(1%)
0%
(7%)
1%
(1%)
1%
(3%)
Total
(3%)
25%
23%
27%
5%
29%
7%
31%
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 for 2020 excludes: (i) a capital investment in the Naval & 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 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
Nine Months Ended
September 30,
September 30,
2021
2020
2021
2020
Net cash provided by operating activities
$
107,285
$
55,993
$
155,761
$
3,784
Capital expenditures
(10,087
)
(7,017
)
(27,858
)
(36,341
)
Free cash flow
$
97,198
$
48,976
$
127,903
$
(32,557
)
Voluntary pension contribution
—
—
—
150,000
Adjustment to capital expenditures (DRG facility investment)
—
437
—
10,112
Restructuring
—
5,935
—
10,676
Adjusted free cash flow
$
97,198
$
55,348
$
127,903
$
138,231
Adjusted free cash flow conversion
127
%
75
%
63
%
76
%
CURTISS-WRIGHT CORPORATION 2021 Guidance (New Segment Structure) As of November 3, 2021 ($'s in millions, except per share data)2020 Adjusted (Non-GAAP)(1)
Exiting Non-Core Operations
2020 Adjusted (2,4) (Non-GAAP)
2021 Reported Guidance (GAAP)
Exiting Non-Core Operations
2021 Adjustments (3) (Non-GAAP)
2021 Adjusted Guidance (3) (Non-GAAP)
Low
High
Low
High
2021 Chg vs 2020 Adjusted
Sales: Aerospace & Industrial$
805
$
(67
)
$
738
$
774
$
789
$
(14
)
$
-
$
760
$
775
3 - 5%
Defense Electronics
611
-
611
742
756
-
4
745
760
22 - 24%
Naval & Power
977
(26
)
951
991
1,011
(31
)
-
960
980
1 - 3%
Total sales$
2,393
$
(93
)
$
2,300
$
2,507
$
2,556
$
(45
)
$
4
$
2,465
$
2,515
7 to 9%
Operating income:
Aerospace & Industrial
$
114
$
(16
)
$
98
$
117
$
120
$
(2
)
$
-
$
115
$
118
17 - 21%
Defense Electronics
144
-
144
153
158
-
6
159
164
10 - 13%
Naval & Power
171
-
171
166
171
8
-
174
179
2 - 5%
Total segments
429
(16
)
413
436
449
6
6
448
461
Corporate and other
(38
)
-
(38
)
(37
)
(39
)
-
-
(37
)
(39
)
Total operating income
$
391
$
(16
)
$
375
$
398
$
409
$
6
$
6
$
411
$
421
9 to 12%
Interest expense
$
(36
)
$
-
$
(36
)
$
(40
)
$
(41
)
$
-
$
-
$
(40
)
$
(41
)
Other income, net
21
-
21
13
13
-
3
16
17
Earnings before income taxes
377
(16
)
361
372
381
6
9
387
397
Provision for income taxes
(88
)
4
(85
)
(89
)
(92
)
(1
)
(2
)
(93
)
(95
)
Net earnings
$
289
$
(12
)
$
277
$
283
$
290
$
5
$
7
$
295
$
302
Diluted earnings per share
$
6.87
$
(0.29
)
$
6.59
$
6.91
$
7.06
$
0.11
$
0.17
$
7.20
$
7.35
9 to 12%
Diluted shares outstanding
42.0
42.0
41.0
41.0
41.0
41.0
Effective tax rate
23.4
%
23.4
%
24.0
%
24.0
%
24.0
%
24.0
%
Operating margins:
Aerospace & Industrial
14.2
%
NM
13.3
%
15.1
%
15.2
%
+10 bps
-
15.1
%
15.3
%
180 to 200 bps
Defense Electronics
23.6
%
NM
23.6
%
20.6
%
20.8
%
-
+70 bps
21.3
%
21.5
%
(210 to 230 bps)
Naval & Power
17.5
%
NM
18.0
%
16.8
%
16.9
%
+140 bps
-
18.2
%
18.3
%
20 to 30 bps
Total operating margin
16.3
%
NM
16.3
%
15.9
%
16.0
%
+60 bps +20 bps
16.7
%
16.8
%
40 to 50 bps
Free cash flow
$
394
$
-
$
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) A reconciliation of our 2020 GAAP to our 2020 Non-GAAP Adjusted figures are provided in our February 24, 2021 press release. (2) 2020 Adjusted financials are defined as Reported Sales 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; and 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, and the results of our German valves business which was classified as held for sale in the fourth quarter of 2020 and resulted in an impairment loss of $33 million. (3) 2021 Adjusted financials are defined as Reported Sales, 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; the results of our German valves business which was classified as held for sale in the fourth quarter of 2020 and resulted in an additional impairment loss of $9 million; the impact of 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). (4) 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 November 3, 2021
2021 % Change vs 2020
Aerospace & Defense Markets
Current
% Total Sales
Aerospace Defense2 - 4%
19%
Ground Defense100 - 105%
9%
Naval Defense0 - 2%
28%
Commercial AerospaceFlat
10%
Total Aerospace & Defense7 - 9%
66%
Commercial Markets
Power & Process
1 - 3%
18%
General Industrial15 - 17%
15%
Total Commercial6 - 8%
34%
Total Curtiss-Wright Sales
7 - 9%
100%
Note: Amounts may not add due to rounding. (1) This table reflects the Company's first quarter 2021 End Market Structure and Realignment, where all Commercial Aerospace market revenues shifted into a newly defined Total Aerospace & Defense market. (2) The Power & Process end market is comprised of a) Nuclear and b) Process, while the General Industrial end market is comprised of a) Industrial Vehicles and b) Industrial Automation and Services. (3) Based on these changes, all of our general industrial businesses operate within the Aerospace & Industrial segment, and the majority of the Company’s nuclear and process revenues operate within the Naval & Power segment.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 Aerospace and Defense markets, and to the Commercial markets including Power, Process and General Industrial. 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, 2020 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/20211103006172/en/
Jim Ryan (704) 869-4621 Jim.Ryan@curtisswright.com
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