Curtiss-Wright Corporation (NYSE: CW) reports financial results
for the third quarter ended September 30, 2023.
Third Quarter 2023 Highlights:
- Reported sales of $724 million, up 15%;
- Reported operating income of $133 million, operating margin of
18.3%, and diluted earnings per share (EPS) of $2.51;
- Adjusted operating income of $134 million, up 17%;
- Adjusted operating margin of 18.5%, up 30 basis points;
- Adjusted diluted EPS of $2.54, up 23%;
- New orders of $846 million, up 3%, reflecting solid Aerospace
& Defense (A&D) and Commercial market demand, and
book-to-bill of 1.2;
- Backlog of $2.9 billion, up 12% year-to-date; and
- Free cash flow (FCF) of $137 million, generating 140% Adjusted
FCF conversion.
Raised Full-Year 2023 Adjusted Financial
Guidance:
- Sales increased to new range of 8% to 10% growth (previously 7%
to 9%), reflecting growth in all A&D and Commercial end
markets;
- Maintained operating income range of 8% to 11% growth, and
operating margin range of 17.4% to 17.6%, up 10 to 30 basis points
compared with the prior year;
- Diluted EPS increased to new range of $9.00 to $9.20, up 11% to
13% (previously $8.90 to $9.15); and
- Free cash flow increased to new range of $380 to $400 million
(previously $370 to $400 million) and continues to reflect greater
than 110% FCF conversion.
"Curtiss-Wright delivered strong third quarter results, as
Adjusted diluted EPS of $2.54 exceeded our expectations driven by
sales growth in all of our A&D and Commercial end markets and a
better-than-expected operational performance in our Defense
Electronics segment," said Lynn M. Bamford, Chair and CEO of
Curtiss-Wright Corporation. "We also demonstrated solid order
activity and grew our already strong backlog, yielding a
book-to-bill of 1.2x in the quarter, highlighted by record
quarterly orders within our Defense Electronics segment and
continued solid demand for commercial nuclear products."
"Based on the strong year-to-date performance, we have increased
our full-year sales, operating income, diluted EPS and free cash
flow guidance as we continue to successfully execute on our Pivot
to Growth strategy and maintain strong alignment with the near- and
long-term favorable secular growth trends driving our
business."
Third Quarter 2023 Operating
Results
(In millions)
Q3-2023
Q3-2022
Change
Reported
Sales
$
724
$
631
15
%
Operating income
$
133
$
108
23
%
Operating margin
18.3
%
17.1
%
120 bps
Adjusted (1)
Sales
$
724
$
631
15
%
Operating income
$
134
$
114
17
%
Operating margin
18.5
%
18.2
%
30 bps
(1) Reconciliations of Reported to Adjusted operating results
are available in the Appendix.
- Sales of $724 million increased 15% compared with the prior
year;
- Total A&D market sales increased 18%, while total
Commercial market sales increased 8%;
- In our A&D markets, we experienced higher sales in the
defense markets driven by continued strong demand for our defense
electronics products and higher sales of arresting systems
equipment, as well as strong growth in OEM sales in the commercial
aerospace market, and
- In our Commercial markets, we experienced strong growth in the
power & process markets, despite the wind down on the China
Direct AP1000 program, and higher sales in the general industrial
market; and
- Adjusted operating income of $134 million increased 17%, while
Adjusted operating margin increased 30 basis points to 18.5%,
principally driven by favorable overhead absorption on higher
revenues in the Defense Electronics segment.
Third Quarter 2023 Segment
Performance
Aerospace & Industrial
(In millions)
Q3-2023
Q3-2022
Change
Reported
Sales
$
220
$
213
3
%
Operating income
$
39
$
39
0
%
Operating margin
17.7
%
18.3
%
(60 bps)
Adjusted (1)
Sales
$
220
$
213
3
%
Operating income
$
39
$
39
0
%
Operating margin
17.7
%
18.3
%
(60 bps)
(1) Reconciliations of Reported to Adjusted operating results
are available in the Appendix.
- Sales of $220 million, up $7 million, or 3%;
- Commercial aerospace market revenue increases reflected higher
OEM sales of actuation and sensors products, as well as surface
treatment services, on narrowbody and widebody platforms;
- Higher general industrial market revenue was principally driven
by increased sales of industrial automation products and surface
treatment services;
- Lower revenue in the aerospace and ground defense markets
reflected the timing of sales for our actuation equipment
supporting various programs; and
- Adjusted operating income was $39 million, flat compared with
the prior year, while Adjusted operating margin decreased 60 basis
points to 17.7%, as favorable absorption on higher sales was offset
by unfavorable mix in actuation products.
Defense Electronics
(In millions)
Q3-2023
Q3-2022
Change
Reported
Sales
$
216
$
161
34
%
Operating income
$
56
$
37
54
%
Operating margin
26.0
%
22.7
%
330 bps
Adjusted (1)
Sales
$
216
$
161
34
%
Operating income
$
56
$
37
54
%
Operating margin
26.0
%
22.7
%
330 bps
(1) Reconciliations of Reported to Adjusted operating results
are available in the Appendix.
- Sales of $216 million, up $55 million, or 34%;
- Higher revenue in the aerospace defense market was primarily
driven by increased sales of our embedded computing and flight test
instrumentation equipment on various domestic and international
platforms;
- Strong revenue growth in the ground defense market principally
reflected the robust demand and timing of sales of tactical
battlefield communications equipment;
- Higher commercial aerospace market revenue reflected increased
OEM sales of avionics and flight test instrumentation equipment on
various domestic and international platforms; and
- Adjusted operating income was $56 million, up 54% from the
prior year, while adjusted operating margin increased 330 basis
points to 26.0%, primarily due to favorable absorption on higher
A&D revenues.
Naval & Power
(In millions)
Q3-2023
Q3-2022
Change
Reported
Sales
$
288
$
256
12
%
Operating income
$
48
$
42
15
%
Operating margin
16.6
%
16.2
%
40 bps
Adjusted (1)
Sales
$
288
$
256
12
%
Operating income
$
49
$
48
1
%
Operating margin
17.0
%
18.9
%
(190 bps)
(1) Reconciliations of Reported to Adjusted operating results
are available in the Appendix.
- Sales of $288 million, up $31 million, or 12%;
- Higher revenue in the aerospace defense market was primarily
driven by increased sales of our arresting systems equipment
supporting various domestic and international customers;
- Naval defense market revenue increases principally reflected
higher revenues on Columbia-class and Virginia-class submarines,
partially offset by the timing of revenues on the CVN-81 aircraft
carrier program;
- Higher power & process market revenues reflected strong
growth in industrial valve sales in the process market, and solid
growth in the commercial nuclear market supporting both increased
maintenance of existing operating reactors as well as increased
development on advanced small modular reactors; Those increases
were partially offset by lower China Direct AP1000 program
revenues; and
- Adjusted operating income was $49 million, up 1% from the prior
year, while adjusted operating margin decreased 190 basis points to
17.0%, as favorable absorption on higher revenues was offset by
unfavorable naval contract adjustments as well as unfavorable mix
of products.
Free Cash Flow
(In millions)
Q3-2023
Q3-2022
Change
Net cash provided by operating
activities
$
146
$
96
53
%
Capital expenditures
(9
)
(9
)
1
%
Reported free cash flow
$
137
$
86
59
%
Adjusted free cash flow (1)
$
137
$
86
59
%
(1) A reconciliation of Reported to Adjusted free cash flow is
available in the Appendix.
- Reported free cash flow of $137 million increased $51 million
year over year, primarily driven by higher cash earnings due to the
timing of defense revenues;
- Adjusted free cash flow of $137 million; and
- Capital expenditures were nearly flat compared with the prior
year.
New Orders and Backlog
- New orders of $846 million increased 3% compared with the prior
year and generated an overall book-to-bill of approximately 1.2x,
principally driven by strong demand for defense electronics
products within our A&D markets, and for nuclear products
within our Commercial markets; and
- Backlog of $2.9 billion, up 12% from December 31, 2022,
reflects higher demand in both our A&D and Commercial
markets.
Share Repurchase and Dividends
- During the third quarter, the Company repurchased 63,614 shares
of its common stock for approximately $13 million; and
- The Company also declared a quarterly dividend of $0.20 a
share.
Full-Year 2023 Guidance
The Company is updating its full-year 2023 Adjusted financial
guidance(1) as follows:
($ in millions, except EPS)
2023 Adjusted Non-GAAP
Guidance (Prior)
2023 Adjusted Non-GAAP
Guidance (Current)
Change vs 2022 Adjusted
(Current)
Total Sales
$2,730 - $2,790
$2,765 - $2,815
Up 8% - 10%
Operating Income
$476 - $490
$480 - $494
Up 8% - 11%
Operating Margin
17.4% - 17.6%
17.4% - 17.6%
Up 10 - 30 bps
Diluted EPS
$8.90 - $9.15
$9.00 - $9.20
Up 11% - 13%
Free Cash Flow
$370 - $400
$380 - $400
Up 29% - 36%
(1) Reconciliations of Reported to Adjusted 2022 operating
results and 2023 financial guidance are available in the Appendix,
and exclude first year purchase accounting costs in both periods
associated with acquisitions.
**********
A more detailed breakdown of the Company’s 2023 financial
guidance by segment and by market, as well as all reconciliations
of Reported GAAP amounts to Adjusted Non-GAAP amounts, can be found
in the accompanying schedules. Historical financial results are
available in the Investor Relations section of Curtiss-Wright’s
website.
Conference Call & Webcast
Information
The Company will host a conference call to discuss its third
quarter 2023 financial results and updates to 2023 guidance at
10:00 a.m. ET on Thursday, November 2, 2023. A live webcast of the
call and the accompanying financial presentation, as well as a
webcast replay of the call, will be made available on the internet
by visiting the Investor Relations section of the Company’s website
at www.curtisswright.com.
(Tables to Follow)
CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS (UNAUDITED)
($'s in thousands, except per
share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Product sales
$
613,915
$
530,782
$
1,721,832
$
1,489,619
Service sales
110,411
99,760
337,750
309,741
Total net sales
724,326
630,542
2,059,582
1,799,360
Cost of product sales
380,163
338,264
1,093,469
949,180
Cost of service sales
62,695
60,069
203,664
188,055
Total cost of sales
442,858
398,333
1,297,133
1,137,235
Gross profit
281,468
232,209
762,449
662,125
Research and development expenses
23,464
17,387
65,698
61,804
Selling expenses
34,084
31,888
100,782
90,387
General and administrative expenses
91,401
75,351
272,060
239,085
Loss on divestiture
—
—
—
4,651
Operating income
132,519
107,583
323,909
266,198
Interest expense
12,496
13,997
40,432
33,315
Other income, net
7,023
3,746
22,744
11,298
Earnings before income taxes
127,046
97,332
306,221
244,181
Provision for income taxes
(30,268
)
(23,564
)
(71,598
)
(58,856
)
Net earnings
$
96,778
$
73,768
$
234,623
$
185,325
Net earnings per share:
Basic earnings per share
$
2.53
$
1.92
$
6.13
$
4.82
Diluted earnings per share
$
2.51
$
1.91
$
6.09
$
4.79
Dividends per share
$
0.20
$
0.19
$
0.59
$
0.56
Weighted-average shares outstanding:
Basic
38,285
38,368
38,301
38,416
Diluted
38,558
38,647
38,538
38,655
CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
($'s in thousands, except par
value)
September 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
148,809
$
256,974
Receivables, net
790,334
723,304
Inventories, net
540,180
483,113
Other current assets
65,794
52,623
Total current assets
1,545,117
1,516,014
Property, plant, and equipment, net
334,864
342,708
Goodwill
1,546,669
1,544,635
Other intangible assets, net
572,348
620,897
Operating lease right-of-use assets,
net
138,809
153,855
Prepaid pension asset
236,089
222,627
Other assets
40,059
47,567
Total assets
$
4,413,955
$
4,448,303
Liabilities
Current liabilities:
Current portion of long-term debt
$
—
$
202,500
Accounts payable
213,662
266,525
Accrued expenses
188,504
174,440
Deferred revenue
292,514
254,801
Other current liabilities
80,699
82,779
Total current liabilities
775,379
981,045
Long-term debt
1,050,713
1,051,900
Deferred tax liabilities, net
117,113
123,001
Accrued pension and other postretirement
benefit costs
57,808
58,348
Long-term operating lease liability
117,320
132,275
Long-term portion of environmental
reserves
14,031
12,547
Other liabilities
96,436
107,973
Total liabilities
$
2,228,800
$
2,467,089
Stockholders' equity
Common stock, $1 par value
$
49,187
$
49,187
Additional paid in capital
136,610
134,553
Retained earnings
3,375,502
3,163,491
Accumulated other comprehensive loss
(253,416
)
(258,916
)
Less: cost of treasury stock
(1,122,728
)
(1,107,101
)
Total stockholders' equity
$
2,185,155
$
1,981,214
Total liabilities and stockholders'
equity
$
4,413,955
$
4,448,303
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; (ii) the sale
or divestiture of a business or product line; (iii) pension
settlement charges; and (iv) significant legal settlements,
impairment costs, and costs associated with shareholder activism,
as applicable.
CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES
RECONCILIATION OF AS REPORTED
TO ADJUSTED (UNAUDITED)
($'s in thousands)
Three Months Ended
Three Months Ended
September 30, 2023
September 30, 2022
% Change
As Reported
Adjustments
Adjusted
As Reported
Adjustments
Adjusted
As Reported
Adjusted
Sales:
Aerospace & Industrial
$
220,297
$
—
$
220,297
$
213,093
$
—
$
213,093
3
%
3
%
Defense Electronics
216,285
—
216,285
161,188
—
161,188
34
%
34
%
Naval & Power
287,744
—
287,744
256,261
—
256,261
12
%
12
%
Total sales
$
724,326
$
—
$
724,326
$
630,542
$
—
$
630,542
15
%
15
%
Operating income (expense):
Aerospace & Industrial
$
39,014
$
—
$
39,014
$
39,080
$
—
$
39,080
—
%
—
%
Defense Electronics
56,212
—
56,212
36,588
—
36,588
54
%
54
%
Naval & Power(1)
47,663
1,333
48,996
41,576
6,905
48,481
15
%
1
%
Total segments
$
142,889
$
1,333
$
144,222
$
117,244
$
6,905
$
124,149
22
%
16
%
Corporate and other
(10,370
)
—
(10,370
)
(9,661
)
—
(9,661
)
(7
)%
(7
)%
Total operating income
$
132,519
$
1,333
$
133,852
$
107,583
$
6,905
$
114,488
23
%
17
%
Operating margins:
As Reported
Adjusted
As Reported
Adjusted
As Reported
Adjusted
Aerospace & Industrial
17.7
%
17.7
%
18.3
%
18.3
%
(60 bps)
(60 bps)
Defense Electronics
26.0
%
26.0
%
22.7
%
22.7
%
330 bps
330 bps
Naval & Power
16.6
%
17.0
%
16.2
%
18.9
%
40 bps
(190 bps)
Total Curtiss-Wright
18.3
%
18.5
%
17.1
%
18.2
%
120 bps
30 bps
Segment margins
19.7
%
19.9
%
18.6
%
19.7
%
110 bps
20 bps
(1) Excludes first year purchase
accounting adjustments in the current period and prior year
period.
CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES
RECONCILIATION OF AS REPORTED
TO ADJUSTED (UNAUDITED)
($'s in thousands)
Nine Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
% Change
As Reported
Adjustments
Adjusted
As Reported
Adjustments
Adjusted
As Reported
Adjusted
Sales:
Aerospace & Industrial
$
649,004
$
—
$
649,004
$
612,777
$
—
$
612,777
6
%
6
%
Defense Electronics
576,161
—
576,161
453,806
—
453,806
27
%
27
%
Naval & Power
834,417
—
834,417
732,777
—
732,777
14
%
14
%
Total sales
$
2,059,582
$
—
$
2,059,582
$
1,799,360
$
—
$
1,799,360
14
%
14
%
Operating income (expense):
Aerospace & Industrial
$
101,224
$
—
$
101,224
$
96,397
$
—
$
96,397
5
%
5
%
Defense Electronics
122,760
—
122,760
84,338
—
84,338
46
%
46
%
Naval & Power (1)(2)
132,382
6,669
139,051
118,865
12,332
131,197
11
%
6
%
Total segments
$
356,366
$
6,669
$
363,035
$
299,600
$
12,332
$
311,932
19
%
16
%
Corporate and other (3)
(32,457
)
—
(32,457
)
(33,402
)
4,876
(28,526
)
3
%
(14
)%
Total operating income
$
323,909
$
6,669
$
330,578
$
266,198
$
17,208
$
283,406
22
%
17
%
Operating margins:
As Reported
Adjusted
As Reported
Adjusted
As Reported
Adjusted
Aerospace & Industrial
15.6
%
15.6
%
15.7
%
15.7
%
(10 bps)
(10 bps)
Defense Electronics
21.3
%
21.3
%
18.6
%
18.6
%
270 bps
270 bps
Naval & Power
15.9
%
16.7
%
16.2
%
17.9
%
(30 bps)
(120 bps)
Total Curtiss-Wright
15.7
%
16.1
%
14.8
%
15.8
%
90 bps
30 bps
Segment margins
17.3
%
17.6
%
16.7
%
17.3
%
60 bps
30 bps
(1) Excludes first year purchase
accounting adjustments in the current period and prior year
period.
(2) Excludes the results of operations
from our German valves business, which was sold in January 2022,
and the loss on divestiture in the prior year period.
(3) Excludes costs associated with
shareholder activism in the prior year period.
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
September 30, 2023
September 30, 2022
% Change
As Reported
Adjustments
Adjusted Sales
As Reported
Adjustments
Adjusted Sales
Change in As Reported
Sales
Change in Adjusted
Sales
Aerospace & Defense
markets:
Aerospace Defense
$
148,023
$
—
$
148,023
$
114,431
$
—
$
114,431
29
%
29
%
Ground Defense
83,185
—
83,185
54,890
—
54,890
52
%
52
%
Naval Defense
179,862
—
179,862
174,844
—
174,844
3
%
3
%
Commercial Aerospace
79,703
—
79,703
70,257
—
70,257
13
%
13
%
Total Aerospace & Defense
$
490,773
$
—
$
490,773
$
414,422
$
—
$
414,422
18
%
18
%
Commercial markets:
Power & Process
$
122,118
$
—
$
122,118
$
110,559
$
—
$
110,559
10
%
10
%
General Industrial
111,435
—
111,435
105,561
—
105,561
6
%
6
%
Total Commercial
$
233,553
$
—
$
233,553
$
216,120
$
—
$
216,120
8
%
8
%
Total Curtiss-Wright
$
724,326
$
—
$
724,326
$
630,542
$
—
$
630,542
15
%
15
%
Nine Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
% Change
As Reported
Adjustments
Adjusted Sales
As Reported
Adjustments
Adjusted Sales
Change in As Reported
Sales
Change in Adjusted
Sales
Aerospace & Defense
markets:
Aerospace Defense
$
380,095
$
—
$
380,095
$
306,980
$
—
$
306,980
24
%
24
%
Ground Defense
220,317
—
220,317
138,391
—
138,391
59
%
59
%
Naval Defense
532,773
—
532,773
510,597
—
510,597
4
%
4
%
Commercial Aerospace
232,226
—
232,226
199,341
—
199,341
16
%
16
%
Total Aerospace & Defense
$
1,365,411
$
—
$
1,365,411
$
1,155,309
$
—
$
1,155,309
18
%
18
%
Commercial markets:
Power & Process
$
373,457
$
—
$
373,457
$
340,702
$
—
$
340,702
10
%
10
%
General Industrial
320,714
—
320,714
303,349
—
303,349
6
%
6
%
Total Commercial
$
694,170
$
—
$
694,170
$
644,051
$
—
$
644,051
8
%
8
%
Total Curtiss-Wright
$
2,059,581
$
—
$
2,059,581
$
1,799,360
$
—
$
1,799,360
14
%
14
%
CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES
RECONCILIATION OF AS REPORTED
TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Diluted earnings per share - As
Reported
$
2.51
$
1.91
$
6.09
$
4.79
First year purchase accounting
adjustments
0.03
0.16
0.13
0.17
Divested German valves business
—
—
—
0.11
Costs associated with shareholder
activism
—
—
—
0.10
Former executive pension settlement
expense
—
—
—
0.04
Diluted earnings per share - Adjusted
(1)
$
2.54
$
2.07
$
6.22
$
5.21
(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, loss from sale of our industrial
valves business in Germany, and foreign currency fluctuations.
Three Months Ended
September 30,
2023 vs. 2022
Aerospace &
Industrial
Defense Electronics
Naval & Power
Total Curtiss-Wright
Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income
As Reported
3%
0%
34%
54%
12%
15%
15%
23%
Less: Acquisitions
0%
0%
0%
0%
0%
0%
0%
0%
Foreign Currency
(1%)
0%
(1%)
(2%)
0%
1%
(1%)
0%
Organic
2%
0%
33%
52%
12%
16%
14%
23%
Nine Months Ended
September 30,
2023 vs. 2022
Aerospace &
Industrial
Defense Electronics
Naval & Power
Total Curtiss-Wright
Sales
Operating income
Sales
Operating income
Sales
Operating income
Sales
Operating income
As Reported
6%
5%
27%
46%
14%
11%
14%
22%
Less: Acquisitions
0%
0%
0%
0%
(5%)
0%
(2%)
0%
Loss on divestiture
0%
0%
0%
0%
0%
(4%)
0%
(2%)
Foreign Currency
0%
0%
(1%)
(6%)
0%
0%
0%
(2%)
Organic
6%
5%
26%
40%
9%
7%
12%
18%
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 both
the current and prior year periods and (ii) executive pension
payments 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
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Net cash provided by operating
activities
$
146,364
$
95,658
$
165,717
$
2,387
Capital expenditures
(9,373
)
(9,297
)
(32,037
)
(28,789
)
Free cash flow
$
136,991
$
86,361
$
133,680
$
(26,402
)
Westinghouse legal settlement
—
—
10,000
15,000
Pension payment to former executive
—
—
—
8,214
Adjusted free cash flow
$
136,991
$
86,361
$
143,680
$
(3,188
)
Adjusted free cash flow conversion
140
%
108
%
60
%
(2
%)
CURTISS-WRIGHT
CORPORATION
2023 Guidance
As of November 1, 2023
($'s in millions, except per
share data)
2022
Reported
(GAAP)
2022
Adjustments
(Non-GAAP)(1,3)
2022
Adjusted
(Non-GAAP)(1,3)
2023
Reported Guidance
(GAAP)
2023
Adjustments
(Non-GAAP)(2,3)
2023
Adjusted Guidance
(Non-GAAP)(2,3)
Low
High
Low
High
2023 Chg
vs 2022
Adjusted
Sales:
Aerospace & Industrial
$
836
$
—
$
836
$
873
$
888
$
—
$
873
$
888
4 - 6%
Defense Electronics
$
690
$
—
$
690
$
775
$
790
$
—
$
775
$
790
12 - 14%
Naval & Power
$
1,031
$
—
$
1,031
$
1,117
$
1,137
$
—
$
1,117
$
1,137
8 - 10%
Total sales
$
2,557
$
—
$
2,557
$
2,765
$
2,815
$
—
$
2,765
$
2,815
8 - 10%
Operating income:
Aerospace & Industrial
$
137
$
1
$
138
$
146
$
150
$
—
$
146
$
150
6 - 9%
Defense Electronics
$
155
$
—
$
155
$
182
$
188
$
—
$
182
$
188
18 - 21%
Naval & Power
$
178
$
14
$
192
$
184
$
189
$
8
$
192
$
197
0 - 3%
Total segments
$
469
$
15
$
484
$
512
$
527
$
8
$
520
$
535
Corporate and other
(46
)
5
(41
)
(41
)
(41
)
—
(41
)
(41
)
Total operating income
423
20
443
472
486
8
480
494
8 - 11%
Interest expense
(47
)
—
(47
)
(52
)
(54
)
—
(52
)
(54
)
Other income, net
13
4
17
28
28
—
28
28
Earnings before income taxes
389
24
413
448
459
8
456
467
Provision for income taxes
(95
)
(4
)
(99
)
(107
)
(110
)
(2
)
(109
)
(112
)
Net earnings
294
20
314
340
349
6
346
355
Diluted earnings per share
$
7.62
$
0.51
$
8.13
$
8.84
$
9.05
$
0.16
$
9.00
$
9.20
11 - 13%
Diluted shares outstanding
38.6
38.6
38.5
38.5
38.5
38.5
Effective tax rate
24.4
%
24.0
%
24.0
%
24.0
%
24.0
%
24.0
%
Operating margins:
Aerospace & Industrial
16.4
%
16.5
%
16.7
%
16.9
%
16.7
%
16.9
%
20 - 40 bps
Defense Electronics
22.4
%
22.4
%
23.5
%
23.7
%
23.5
%
23.7
%
110 - 130 bps
Naval & Power
17.2
%
18.6
%
16.4
%
16.6
%
17.1
%
17.3
%
(150) - (130) bps
Total operating margin
16.6
%
17.3
%
17.1
%
17.3
%
17.4
%
17.6
%
10 - 30 bps
Free cash flow
$
257
$
39
$
296
$
370
$
390
$
10
$
380
$
400
29 - 36%
Notes: Full year amounts may not add due
to rounding.
(1) 2022 Adjusted financials exclude the
impact of first year purchase accounting adjustments, the loss on
sale of our German valves business, costs associated with
shareholder activism and pension settlement charges related to the
retirement of two former executives.
(2) 2023 Adjusted financials exclude the
impact of first year purchase accounting adjustments.
(3) Free Cash Flow is defined as cash flow
from operations less capital expenditures. 2022 Adjusted Free Cash
Flow excluded one-time pension settlement payments of $24 million
and a legal settlement payment of $15 million. 2023 Adjusted Free
Cash Flow guidance excludes a legal settlement payment of $10
million.
CURTISS-WRIGHT
CORPORATION
2023 Sales Growth Guidance by
End Market
As of November 1, 2023
2023 % Change vs. 2022
Adjusted(1)
Prior
Current
% Total Sales
Aerospace &
Defense Markets
Aerospace Defense
9 - 11%
11 - 13%
19%
Ground Defense
16 - 18%
23 - 25%
10%
Naval Defense
6 - 8%
5 - 7%
27%
Commercial Aerospace
9 - 11%
14 - 16%
11%
Total Aerospace & Defense
9 - 11%
10 - 12%
67%
Commercial
Markets
Power & Process
3 - 5%
4 - 6%
18%
General Industrial
3 - 5%
3 - 5%
15%
Total Commercial
3 - 5%
3 - 5%
33%
Total Curtiss-Wright Sales
7 - 9%
8 - 10%
100%
Note: Sales percentages may not add due to
rounding.
(1) 2023 and 2022 Sales include the
contribution from the engineered arresting systems business,
acquired on June 30, 2022, to the Aerospace Defense market.
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 8,500
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, 2022, 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/20231101638844/en/
Jim Ryan (704) 869-4621 Jim.Ryan@curtisswright.com
Curtiss Wright (NYSE:CW)
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