Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its first quarter of fiscal year 2024.
All amounts are presented on an as reported (U.S. GAAP) basis
unless otherwise indicated. All per share amounts are presented on
a fully diluted basis. All comparisons are made to the same period
of the prior year unless otherwise stated.
First Quarter Overview
- Net sales were $787 million,
compared to $619 million, an increase of 27 percent.
- Net earnings were $90 million, or
$1.46 per share, and adjusted net earnings1 were $90 million, or
$1.45 per share, compared to net earnings and adjusted net earnings
of $30 million, or $0.49 per share.
- Net cash provided by operating
activities was $47 million, compared to $5 million. Free cash flow1
was $5 million and adjusted free cash flow1 was $3 million,
compared to free cash flow and adjusted free cash flow of negative
$19 million.
"We delivered significant sales growth and margin expansion in
the first quarter. The strong start to our fiscal year reflects
continued positive momentum, including robust end market demand and
improved operational performance,” stated Chip Blankenship,
Chairman and Chief Executive Officer. “In Aerospace, both OEM and
aftermarket sales were strong this quarter. We saw broad-based
strength across Industrial, with significant expansion in
transportation, mainly from our China on-highway business. Based on
our strong performance to date, we are raising our full-year
guidance. Our steadfast commitment to growth, operational
excellence, and innovation positions Woodward for sustainable
long-term success and enhanced shareholder value."
First Quarter Company
Results
Net sales for the first quarter of fiscal 2024 were $787
million, compared to $619 million, an increase of 27 percent.
Net earnings for the first quarter of fiscal 2024 were $90
million, or $1.46 per share, compared to $30 million, or $0.49 per
share. Adjusted net earnings were $90 million, or $1.45 per share,
for the first quarter of fiscal 2024. There were no adjustments to
net earnings in the first quarter of fiscal 2023.
EBIT1 was $120 million for the first quarter of fiscal 2024,
compared to $43 million. Adjusted EBIT1 was $119 million for the
first quarter of 2024. There were no adjustments to EBIT in the
first quarter of fiscal 2023.
The effective tax rate was 17.9 percent in the first quarter of
fiscal 2024, compared to 6.7 percent. The adjusted effective tax
rate1 in the first quarter of fiscal 2024 was 17.7 percent.
Segment Results
Aerospace
Aerospace segment net sales for the first quarter of fiscal 2024
were $461 million, compared to $396 million, an increase of 16
percent.
Commercial aerospace sales increased significantly, driven by
higher OEM production rates, continued growth in passenger traffic,
increasing aircraft utilization, and price realization. Defense
sales also grew, particularly in aftermarket.
Segment earnings for the first quarter of 2024 were $79 million,
compared to $55 million. Segment earnings as a percent of segment
net sales were 17.2 percent for the first quarter of 2024, compared
to 14.0 percent. The increase in segment earnings was primarily a
result of significantly expanded OEM sales and higher aftermarket
volume.
Industrial
Industrial segment net sales for the first quarter of fiscal
2024 were $326 million, compared to $223 million, an increase of 46
percent. The increase in Industrial segment net sales was driven
primarily by growth across all markets, particularly in our
on-highway natural gas truck business in China, as well as
operational improvements.
Industrial segment earnings for the first quarter of 2024 were
$67 million, or 20.5 percent of segment net sales, compared to $11
million, or 5.1 percent of segment net sales. The sharp increase in
Industrial earnings was a result of operational improvements
including increased output and other efficiency gains, as well as
significantly increased demand for on-highway natural gas trucks in
China.
Nonsegment
Nonsegment expenses for the first quarter of fiscal 2024 were
$26 million, compared to $24 million. Adjusted nonsegment expenses1
were $27 million for the first quarter of fiscal 2024.
Cash Flow and Financial
Position
Net cash provided by operating activities was $47 million for
the first quarter of fiscal year 2024, compared to $5 million.
Payments for property, plant, and equipment for the first quarter
of 2024 were $42 million, compared to $24 million.
Free cash flow was $5 million for the first quarter of fiscal
year 2024, compared to negative $19 million. Adjusted free cash
flow was $3 million for the first quarter of fiscal 2024. There
were no adjustments to free cash flow in the first quarter of
fiscal year 2023. The increase in free cash flow and adjusted free
cash flow was primarily due to increased earnings, partially offset
by the above-target payout for fiscal year 2023 annual incentive
compensation and higher capital expenditures.
During the first quarter of fiscal 2024, $13 million was
returned to stockholders in the form of dividends.
Total debt was $719 million at December 31, 2023, compared to
$834 million at December 31, 2022. Debt-to-EBITDA1 leverage at
December 31, 2023, was 1.3 times EBITDA, compared to 2.3 times
EBITDA.
Fiscal Year 2024 Guidance
Based on our strong first quarter performance and visibility
into the second quarter demand for the China on-highway natural gas
truck business, we are updating certain components of our fiscal
2024 guidance.
Woodward,
Inc. and Subsidiaries |
Revised
Guidance |
|
(In
millions, except per share amount and percentages) |
|
Prior |
|
Revised |
|
FY24 Guidance issued on |
|
FY24 Guidance issued on |
|
November 16, 2023 |
|
January 29, 2024 |
Total Company |
|
|
|
Sales |
$3,100 -
$3,250 |
|
$3,150-$3,300 |
Adjusted
Effective Tax Rate |
~21% |
|
No
change |
Adjusted
Free Cash Flow |
$275-$325 |
|
$300 -
$350 |
Capital
Expenditures |
~$100 |
|
No
change |
Shares |
~62 |
|
No
change |
Adjusted
EPS |
$4.75-$5.20 |
|
$5.00-$5.40 |
|
|
|
|
Segment Data |
|
|
|
Aerospace |
|
|
|
Sales
Growth |
Up 10% to
14% |
|
No
change |
Segment
Earnings (% of Sales) |
18% -
19% |
|
No
change |
Industrial |
|
|
|
Sales
Growth |
Up 4% to
6% |
|
Up 8% to
10% |
Segment
Earnings (% of Sales) |
13% -
14% |
|
14% -
15% |
Conference Call
Woodward will hold an investor conference call at 4:30 p.m. ET,
January 29, 2024, to provide an overview of the financial
performance for the first quarter of fiscal year 2024, business
highlights, and outlook for the remainder of fiscal 2024. You are
invited to listen to the live webcast of our conference call, or a
recording, and view or download accompanying presentation slides at
our website, www.woodward.com2.
You may also listen to the call by dialing 1-888-440-4531
(domestic) or 1-646-960-0808 (international). Participants should
call prior to the start time to allow for registration; the
Conference ID is 4278216. An audio replay will be available by
telephone from 7:30 p.m. ET on January 29, 2024 until 11:59 p.m. ET
on February 12, 2024. The telephone number to access the replay is
1-800-770-2030 (domestic) or 1-647-362-9199 (international),
reference access code 4278216.
A webcast presentation will be available on the website by
selecting “Investors/Events & Presentations”. The call and
presentation will remain accessible on the website for 14 days.
About Woodward, Inc.
Woodward is the global leader in the design, manufacture, and
service of energy conversion and control solutions for the
aerospace and industrial equipment markets. Together with our
customers, we are enabling the path to a cleaner, decarbonized
world. Our innovative fluid, combustion, electrical, propulsion and
motion control systems perform in some of the world’s harshest
environments. Woodward is a global company headquartered in Fort
Collins, Colorado, USA. Visit our website at
www.woodward.com.
Cautionary Statement
Information in this press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties, including,
but not limited to, continued robust end market demand, continued
improvements in our operational performance, and the results of our
ongoing commitment to growth, operational excellence and
innovation, including whether such efforts ultimately lead to
long-term success and enhanced shareholder value; and statements
regarding our business and financial guidance for the remainder of
fiscal year 2024, including our guidance for sales, adjusted
earnings, adjusted earnings per share, segment sales growth,
segment earnings as a percent of sales, adjusted effective tax
rate, adjusted free cash flow, capital expenditures, and diluted
weighted shares outstanding, as well as our assumptions and
expectations regarding our guidance. Factors that could cause
actual results and the timing of certain events to differ
materially from the forward-looking statements include, but are not
limited to: (1) global economic uncertainty and instability,
including in the financial markets that affect Woodward, its
customers, and its supply chain; (2) risks related to constraints
and disruptions in the global supply chain and labor markets; (3)
Woodward’s long sales cycle; (4) risks related to Woodward’s
concentration of revenue among a relatively small number of
customers; (5) Woodward’s ability to implement and realize the
intended effects of any restructuring efforts; (6) Woodward’s
ability to successfully manage competitive factors including
expenses and fluctuations in sales; (7) changes and consolidations
in the aerospace market; (8) Woodward’s financial obligations
including debt obligations and tax expenses and exposures; (9)
risks related to Woodward’s U.S. government contracting activities
including potential changes in government spending patterns; (10)
volatility with respect to the China on-highway natural gas truck
market; (11) Woodward’s ability to protect its intellectual
property rights and avoid infringing the intellectual property
rights of others; (12) changes in the estimates of fair value of
reporting units or of long-lived assets; (13) environmental risks;
(14) Woodward’s continued access to a stable workforce and
favorable labor relations with its employees; (15) Woodward’s
ability to manage various regulatory and legal matters; (16) risks
from operating internationally; (17) cybersecurity and other
technological risks; and other risk factors and risks described in
Woodward's filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the fiscal year ended
September 30, 2023, as well as its Quarterly Report on Form 10-Q
for the first quarter ended December 31, 2023, which we expect to
file shortly, and other risks described in Woodward’s filings with
the Securities and Exchange Commission.
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
Net sales |
$ |
786,730 |
|
|
$ |
618,619 |
|
Costs and expenses: |
|
|
|
|
|
Cost of goods sold |
|
582,381 |
|
|
|
492,663 |
|
Selling, general, and administrative expenses |
|
74,511 |
|
|
|
63,187 |
|
Research and development costs |
|
30,794 |
|
|
|
28,634 |
|
Interest expense |
|
11,436 |
|
|
|
11,142 |
|
Interest income |
|
(1,473 |
) |
|
|
(366 |
) |
Other (income) expense, net |
|
(20,639 |
) |
|
|
(8,390 |
) |
Total costs and expenses |
|
677,010 |
|
|
|
586,870 |
|
Earnings before income
taxes |
|
109,720 |
|
|
|
31,749 |
|
Income taxes |
|
19,676 |
|
|
|
2,143 |
|
Net
earnings |
$ |
90,044 |
|
|
$ |
29,606 |
|
|
|
|
|
|
|
Earnings per share
amounts: |
|
|
|
|
|
Basic earnings per share |
$ |
1.50 |
|
|
$ |
0.50 |
|
Diluted earnings per
share |
$ |
1.46 |
|
|
$ |
0.49 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
Basic |
|
60,021 |
|
|
|
59,667 |
|
Diluted |
|
61,846 |
|
|
|
60,928 |
|
|
|
|
|
|
|
Cash dividends paid per
share |
$ |
0.22 |
|
|
$ |
0.19 |
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
December 31, |
|
|
September 30, |
|
|
2023 |
|
|
2023 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
144,348 |
|
|
$ |
137,447 |
|
Accounts receivable |
|
778,065 |
|
|
|
749,859 |
|
Inventories |
|
559,673 |
|
|
|
517,843 |
|
Income taxes receivable |
|
11,348 |
|
|
|
14,120 |
|
Other current assets |
|
52,723 |
|
|
|
50,183 |
|
Total current assets |
|
1,546,157 |
|
|
|
1,469,452 |
|
Property, plant, and equipment, net |
|
931,253 |
|
|
|
913,094 |
|
Goodwill |
|
803,487 |
|
|
|
791,468 |
|
Intangible assets, net |
|
460,986 |
|
|
|
452,363 |
|
Deferred income tax assets |
|
59,733 |
|
|
|
58,550 |
|
Other assets |
|
329,189 |
|
|
|
325,276 |
|
Total
assets |
$ |
4,130,805 |
|
|
$ |
4,010,203 |
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short-term debt |
$ |
65,100 |
|
|
$ |
- |
|
Current portion of long-term debt |
|
745 |
|
|
|
75,817 |
|
Accounts payable |
|
253,398 |
|
|
|
234,328 |
|
Income taxes payable |
|
51,914 |
|
|
|
44,435 |
|
Accrued liabilities |
|
211,657 |
|
|
|
262,616 |
|
Total current liabilities |
|
582,814 |
|
|
|
617,196 |
|
Long-term debt, less current portion |
|
653,029 |
|
|
|
645,709 |
|
Deferred income tax liabilities |
|
139,018 |
|
|
|
132,819 |
|
Other liabilities |
|
565,882 |
|
|
|
543,490 |
|
Total liabilities |
|
1,940,743 |
|
|
|
1,939,214 |
|
Stockholders’ equity |
|
2,190,062 |
|
|
|
2,070,989 |
|
Total liabilities and
stockholders’ equity |
$ |
4,130,805 |
|
|
$ |
4,010,203 |
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
$ |
46,789 |
|
|
$ |
5,402 |
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
Payments for purchase of
property, plant, and equipment |
|
(41,812 |
) |
|
|
(24,390 |
) |
Proceeds from sale of assets
and short-term investments |
|
36 |
|
|
|
37 |
|
Business acquisition, net of
cash acquired |
|
- |
|
|
|
878 |
|
Net cash used in
investing activities |
|
(41,776 |
) |
|
|
(23,475 |
) |
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
Cash dividends paid |
|
(13,209 |
) |
|
|
(11,355 |
) |
Proceeds from sales of
treasury stock |
|
15,267 |
|
|
|
1,199 |
|
Payments for repurchases of
common stock |
|
- |
|
|
|
(26,369 |
) |
Borrowings on revolving lines
of credit and short-term borrowings |
|
728,600 |
|
|
|
413,700 |
|
Payments on revolving lines of
credit and short-term borrowings |
|
(663,500 |
) |
|
|
(371,200 |
) |
Payments of long-term debt and
finance lease obligations |
|
(75,249 |
) |
|
|
(98 |
) |
Net cash (used in)
provided by financing activities |
|
(8,091 |
) |
|
|
5,877 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
9,979 |
|
|
|
3,687 |
|
Net change in cash and
cash equivalents |
|
6,901 |
|
|
|
(8,509 |
) |
Cash and cash equivalents at
beginning of year |
|
137,447 |
|
|
|
107,844 |
|
Cash and cash equivalents at
end of period |
$ |
144,348 |
|
|
$ |
99,335 |
|
Woodward, Inc. and Subsidiaries |
SEGMENT NET SALES AND NET EARNINGS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net
sales: |
|
|
|
|
|
Aerospace |
$ |
460,756 |
|
|
$ |
395,685 |
|
Industrial |
|
325,974 |
|
|
|
222,934 |
|
Total consolidated net
sales |
$ |
786,730 |
|
|
$ |
618,619 |
|
Segment
earnings*: |
|
|
|
|
|
Aerospace |
$ |
79,002 |
|
|
$ |
55,434 |
|
As a percent of segment net
sales |
|
17.2 |
% |
|
|
14.0 |
% |
Industrial |
|
66,881 |
|
|
|
11,402 |
|
As a percent of segment net
sales |
|
20.5 |
% |
|
|
5.1 |
% |
Total segment
earnings |
|
145,883 |
|
|
|
66,836 |
|
Nonsegment expenses |
|
(26,200 |
) |
|
|
(24,311 |
) |
EBIT |
|
119,683 |
|
|
|
42,525 |
|
Interest expense, net |
|
(9,963 |
) |
|
|
(10,776 |
) |
Consolidated earnings
before income taxes |
$ |
109,720 |
|
|
$ |
31,749 |
|
|
|
|
|
|
|
*This schedule
reconciles segment earnings, which exclude certain costs, to
consolidated earnings before taxes. |
|
|
|
|
|
|
Payments for property,
plant and equipment |
$ |
41,812 |
|
|
$ |
24,390 |
|
Depreciation
expense |
$ |
20,226 |
|
|
$ |
20,126 |
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, 2023 |
|
|
Three Months Ended December 31, 2022 |
|
|
|
BeforeIncome Tax |
|
|
Net ofIncome Tax |
|
|
Per Share,Net ofIncome Tax |
|
|
BeforeIncome Tax |
|
|
Net ofIncome Tax |
|
|
Per Share,Net ofIncome Tax |
|
Net earnings (U.S. GAAP) |
|
$ |
109,720 |
|
|
$ |
90,044 |
|
|
$ |
1.46 |
|
|
$ |
31,749 |
|
|
$ |
29,606 |
|
|
$ |
0.49 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring gain related to a previous acquisition |
|
|
(4,803 |
) |
|
|
(3,433 |
) |
|
|
(0.06 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development activities |
|
|
4,238 |
|
|
|
3,200 |
|
|
|
0.05 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total non-U.S. GAAP
adjustments |
|
|
(565 |
) |
|
|
(233 |
) |
|
|
(0.01 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted net earnings
(Non-U.S. GAAP) |
|
$ |
109,155 |
|
|
$ |
89,811 |
|
|
$ |
1.45 |
|
|
$ |
31,749 |
|
|
$ |
29,606 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NET EARNINGS TO
EBIT1AND ADJUSTED
EBIT1 |
(Unaudited - in thousands) |
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net earnings (U.S. GAAP) |
$ |
90,044 |
|
|
$ |
29,606 |
|
Income tax expense |
|
19,676 |
|
|
|
2,143 |
|
Interest expense |
|
11,436 |
|
|
|
11,142 |
|
Interest income |
|
(1,473 |
) |
|
|
(366 |
) |
EBIT (Non-U.S.
GAAP) |
|
119,683 |
|
|
|
42,525 |
|
Total non-U.S. GAAP
adjustments* |
|
(565 |
) |
|
|
- |
|
Adjusted EBIT
(Non-U.S. GAAP) |
$ |
119,118 |
|
|
$ |
42,525 |
|
|
|
|
|
|
|
*See Reconciliation
of Net Earnings to Adjusted Net Earnings1table above for the list
of Non-U.S. GAAP adjustments made in the applicable periods. |
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NET EARNINGS TO
EBITDA1AND ADJUSTED
EBITDA1 |
(Unaudited - in thousands) |
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Net earnings (U.S. GAAP) |
$ |
90,044 |
|
|
$ |
29,606 |
|
Income tax expense |
|
19,676 |
|
|
|
2,143 |
|
Interest expense |
|
11,436 |
|
|
|
11,142 |
|
Interest income |
|
(1,473 |
) |
|
|
(366 |
) |
Amortization of intangible
assets |
|
8,599 |
|
|
|
9,178 |
|
Depreciation expense |
|
20,226 |
|
|
|
20,126 |
|
EBITDA (Non-U.S.
GAAP) |
|
148,508 |
|
|
|
71,829 |
|
Total non-U.S. GAAP
adjustments* |
|
(565 |
) |
|
|
- |
|
Adjusted EBITDA
(Non-U.S. GAAP) |
$ |
147,943 |
|
|
$ |
71,829 |
|
|
|
|
|
|
|
*See Reconciliation
of Net Earnings to Adjusted Net Earnings1table above for the list
of Non-U.S. GAAP adjustments made in the applicable periods. |
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED
NONSEGMENT EXPENSES1 |
|
(Unaudited - in thousands) |
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
Nonsegment expenses (U.S. GAAP) |
$ |
(26,200 |
) |
|
$ |
(24,311 |
) |
Non-recurring gain related to
a previous acquisition |
|
(4,803 |
) |
|
|
- |
|
Business development
activities |
|
4,238 |
|
|
|
- |
|
Adjusted nonsegment
expenses (Non-U.S. GAAP) |
$ |
(26,765 |
) |
|
$ |
(24,311 |
) |
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO
FREE CASH FLOW1AND ADJUSTED FREE
CASH FLOW1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities (U.S. GAAP) |
$ |
46,789 |
|
|
$ |
5,402 |
|
Payments for property, plant,
and equipment |
|
(41,812 |
) |
|
|
(24,390 |
) |
Free cash flow
(Non-U.S. GAAP) |
|
4,977 |
|
|
|
(18,988 |
) |
Cash received for
non-recurring matter related to a previous acquisition |
|
(4,803 |
) |
|
|
- |
|
Cash paid for non-recurring
matter unrelated to the ongoing operations of the business |
|
2,725 |
|
|
|
- |
|
Adjusted free cash
flow (Non-U.S. GAAP) |
$ |
2,899 |
|
|
$ |
(18,988 |
) |
1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net
earnings, adjusted earnings per share, EBIT, adjusted EBIT, EBITDA,
adjusted EBITDA, adjusted effective tax rate, and adjusted
nonsegment expenses exclude, as applicable, (i) a non-recurring
gain related to a previous acquisition, and (ii) costs related to
business development activities. The Company believes that these
excluded items are short‐term in nature, not directly related to
the ongoing operations of the business, and therefore, the
exclusion of them illustrates more clearly how the underlying
business of Woodward is performing. Adjusted free cash flow is free
cash flow (defined below), plus the cash payments pertaining to a
non-recurring matter unrelated to the ongoing operations of the
business, and minus the cash received for a non-recurring matter
related to a previous acquisition. Management believes these
adjustments to free cash flow better portray Woodward’s operating
performance.
EBIT (earnings before interest and taxes), EBITDA (earnings
before interest, taxes, depreciation and amortization), free cash
flow, adjusted free cash flow, adjusted net earnings, adjusted
earnings per share, adjusted EBIT, adjusted EBITDA, adjusted
effective tax rate, and adjusted nonsegment expenses are financial
measures not prepared and presented in accordance with accounting
principles generally accepted in the United States of America (U.S.
GAAP). Management uses EBIT and adjusted EBIT to evaluate
Woodward’s operating performance without the impacts of financing
and tax related considerations. Management uses EBITDA and adjusted
EBITDA in evaluating Woodward’s operating performance, making
business decisions, including developing budgets, managing
expenditures, forecasting future periods, and evaluating capital
structure impacts of various strategic scenarios. Management also
uses free cash flow, which is derived from net cash provided by or
used in operating activities less payments for property, plant, and
equipment, as well as adjusted free cash flow (as described above),
in reviewing the financial performance of Woodward’s various
business segments and evaluating cash generation levels. Securities
analysts, investors, and others frequently use EBIT, EBITDA and
free cash flow in their evaluation of companies, particularly those
with significant property, plant, and equipment, and intangible
assets that are subject to amortization. The use of any of these
non-U.S. GAAP financial measures is not intended to be considered
in isolation of, or as a substitute for, the financial information
prepared and presented in accordance with U.S. GAAP. Because
adjusted net earnings, adjusted earnings per share, EBIT, EBITDA,
adjusted EBIT, and adjusted EBITDA exclude certain financial
information compared with net earnings, the most comparable U.S.
GAAP financial measure, users of this financial information should
consider the information that is excluded. Free cash flow, adjusted
free cash flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of our ability
to fund our cash needs. Management’s calculations of EBIT, EBITDA,
adjusted net earnings, adjusted earnings per share, adjusted EBIT,
adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment
expenses, free cash flow, and adjusted free cash flow may differ
from similarly titled measures used by other companies, limiting
their usefulness as comparative measures.
2Website, Facebook, X: Woodward has used, and intends to
continue to use, its Investor Relations website, its Facebook page
and its X handle as means of disclosing material non-public
information and for complying with its disclosure obligations under
Regulation FD.
Contact: |
Dan Provaznik |
|
Director, Investor Relations |
|
970-498-3849 |
|
Dan.Provaznik@woodward.com |
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