Press release

Curtiss-Wright Reports Fourth Quarter and Full-Year 2020 Financial Results; Issues Initial Full-Year 2021 Guidance

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Curtiss-Wright Corporation (NYSE: CW) reports financial results for the fourth quarter and full-year ended December 31, 2020.

Fourth Quarter 2020 Highlights:

  • Reported diluted earnings per share (EPS) of $1.30; Adjusted diluted EPS of $2.39, up 12%;
  • Reported record free cash flow (FCF) of $246 million, with record Adjusted FCF of $256 million, up 3%;
  • Net sales of $668 million, up 2%, led by strong 15% organic growth in defense markets;
  • Reported operating income of $76 million, with Reported operating margin of 11.4%, including a $33 million non-cash impairment of a German valves business classified as held for sale;
  • Adjusted operating income of $133 million, up 8%;
  • Adjusted operating margin of 19.8%, up 100 basis points compared to the prior year, principally reflecting the benefits of cost containment and restructuring initiatives; and
  • Share repurchases of approximately $62 million.

Full-Year 2020 Highlights:

  • Reported diluted EPS of $4.80, with Adjusted diluted EPS of $6.87;
  • Reported FCF of $214 million, with record Adjusted FCF of $394 million, up 6%, and an Adjusted free cash flow conversion of 137%;
  • Net sales of $2.4 billion, down 4%, with defense market sales up 17% (up 10% organic);
  • Reported operating income of $289 million, with Reported operating margin of 12.1%;
  • Adjusted operating income of $391 million, down 5%;
  • Adjusted operating margin of 16.3%, down 20 basis points compared to the prior year, as strength in our defense markets and the benefits of our cost containment and restructuring initiatives partially offset reduced commercial markets sales; and
  • Total share repurchases of $200 million.

“As we reflect on Curtiss-Wright’s performance in 2020, I am proud of the team and their agility, resilience and focus to achieve exceptional results in a very challenging year,” said Lynn M. Bamford, President and CEO of Curtiss-Wright Corporation.

“We concluded 2020 by delivering solid fourth quarter results, driven by sequentially higher sales across all of our major end markets. During the quarter, we benefited from the acceleration of growth in our defense markets, the contribution from our recent PacStar acquisition and improving trends in our commercial markets. In addition, our strong financial performance reflects the savings generated by our restructuring actions and the benefit of our opportunistic share repurchase activity.

“Turning to our full-year 2020 results, we delivered strong full-year Adjusted operating margin, just shy of the prior year’s performance. We remain committed to achieving our 17% target in 2022. Further, we achieved record Adjusted free cash flow and leveraged our strong and healthy balance sheet to implement our balanced capital allocation strategy by completing our largest acquisition to date of $400 million, executing $200 million in share repurchases and maintaining a stable dividend.

“Looking ahead to 2021, we are projecting mid-to-high single digit growth in sales, Adjusted operating income and Adjusted diluted EPS. We are confident that our team can maintain its high level of performance and execution to keep us on a path to achieve our long-term targets. Additionally, today we are announcing new segment and end market structures to better align our business to our key strategies and industry drivers, while also helping to simplify our portfolio for investors. This is the first step, ahead of our planned May 2021 investor day, in communicating our new vision and strategy which will drive long-term profitable growth and deliver significant value for our shareholders.”

Fourth Quarter 2020 Operating Results

(In millions)

Q4-2020

Q4-2019

Change

Sales

$

668.4

 

$

655.8

 

2

%

Reported operating income

$

76.5

 

$

120.7

 

(37

%)

Adjustments (1)

 

56.4

 

 

2.5

 

 

Adjusted operating income (1)

$

132.8

 

$

123.2

 

8

%

Adjusted operating margin (1)

 

19.8

%

 

18.8

%

100 bps

(1)

Fourth quarter 2020 Adjusted results exclude $33 million related to an impairment of a German valves business within the Commercial/Industrial segment classified as held for sale, $12 million in restructuring costs and $11 million in one-time inventory step-up, backlog amortization and transaction costs for acquisitions. Amounts may not add due to rounding.

  • Sales of $668 million, up $13 million, or 2%, reflect sequentially higher sales across all of our major end markets;
  • Sales to the defense markets increased 27%, 15% of which was organic, led by strong growth in aerospace and naval defense, as well as the contribution of the PacStar acquisition in ground defense. Commercial sales decreased 18%, due to reduced demand in the commercial aerospace, general industrial and power generation markets. Please refer to the accompanying tables for an overall breakdown of sales by end market;
  • Adjusted operating income was $133 million, up 8%, reflecting higher revenues in the Defense and Power segments, partially offset by reduced operating income on lower sales in the Commercial/Industrial segment;
  • Adjusted operating margin increased 100 basis points to 19.8%, reflecting the benefits of our company-wide restructuring and cost containment actions, most notably in the Commercial/Industrial segment; and
  • Non-segment expenses of $10 million increased by $2 million compared to the prior year, primarily due to higher corporate costs.

Free Cash Flow

(In millions)

Q4-2020

Q4-2019

Change

Net cash provided by operating activities

$

257.4

 

$

262.4

 

(2

%)

Capital expenditures

 

(11.2

)

 

(19.8

)

44

%

Reported free cash flow

$

246.2

 

$

242.6

 

2

%

Adjustment to capital expenditures (DRG facility investment) (1)

 

0.1

 

 

5.3

 

 

Restructuring (1)

 

9.6

 

 

 

 

Adjusted free cash flow (1)

$

256.0

 

$

247.9

 

3

%

(1)

Adjusted free cash flow excludes a capital investment related to the new, state-of-the-art naval facility principally for DRG which impacted both periods, and the cash impact from restructuring in the current period. Amounts may not add due to rounding.

  • Reported free cash flow was $246 million, an increase of $4 million compared to the prior year, as lower cash earnings were offset by improvements in working capital and reductions in capital expenditures;
  • Capital expenditures decreased $9 million to $11 million compared to the prior year, primarily due to lower capital investments within the Power segment; and
  • Adjusted free cash flow was $256 million in the fourth quarter, producing a free cash flow conversion rate of 259%.

New Orders and Backlog

  • New orders of $573 million decreased 2% compared with the prior year period, as solid demand for defense electronics and the contribution from our PacStar acquisition were more than offset by reduced commercial aerospace orders; and
  • Backlog of $2.2 billion was unchanged from December 31, 2019, as growth in our defense markets of 12% was offset by lower commercial market demand principally driven by the pandemic.

Share Repurchase and Dividends

  • During the fourth quarter, the Company repurchased 613,953 shares of its common stock for approximately $62 million, or an average of $101.32 per share;
  • Year-to-date, the Company repurchased 1.98 million shares for $200 million, or an average of $100.82 per share, which included $150 million repurchased opportunistically; and
  • The Company also declared a quarterly dividend of $0.17 a share, unchanged from the previous quarter.

Other Items – Business Held for Sale

  • During the fourth quarter, the Company classified its German valves business within its Commercial/Industrial segment as held for sale and its results have been adjusted from comparisons between our future financial guidance and prior year results.

Fourth Quarter 2020 Segment Performance

Commercial/Industrial

(In millions)

Q4-2020

Q4-2019

Change

Sales

$

249.2

 

$

296.1

 

(16

%)

Reported operating income

$

7.4

 

$

49.4

 

(85

%)

Adjustments (1)

 

40.0

 

 

 

 

Adjusted operating income (1)

$

47.3

 

$

49.4

 

(4

%)

Adjusted operating margin (1)

 

19.0

%

 

16.7

%

230 bps

(1)

Adjusted results exclude an impairment of a valves business classified as held for sale, restructuring costs and one-time backlog amortization and transaction costs for acquisitions. Amounts may not add due to rounding.

  • Sales of $249 million decreased $47 million, or 16%, but improved sequentially across our major commercial and industrial end markets compared with third quarter 2020 results;
  • Commercial aerospace market revenues were driven by reduced OEM sales of actuation and sensors equipment, as well as surface treatment services, as expected due to customer-driven production slowdowns;
  • General industrial market revenue declines principally reflect reduced year-over-year sales for industrial valves;
  • Reported operating income was $7 million, with Reported operating margin of 3.0%; and
  • Adjusted operating income was $47 million, down 4% from the prior year, while Adjusted operating margin increased 230 basis points to 19.0%, principally driven by the benefits of our cost containment and restructuring initiatives.

Defense

(In millions)

Q4-2020

Q4-2019

Change

Sales

$

217.5

 

$

173.3

 

26

%

Reported operating income

$

42.3

 

$

43.7

 

(3

%)

Adjustments (1)

 

10.6

 

 

0.5

 

 

Adjusted operating income (1)

$

52.9

 

$

44.2

 

20

%

Adjusted operating margin (1)

 

24.2

%

 

25.5

%

(130 bps)

(1)

Adjusted results exclude restructuring costs and one-time backlog amortization and transaction costs for acquisitions.

  • Sales of $217 million, up $44 million, or 26%;
  • Higher aerospace defense market revenues were driven by increased sales of embedded computing and flight test instrumentation equipment on various fighter jet programs, partially offset by the timing of orders on Unmanned Aerial Vehicle (UAV) platforms;
  • Higher ground defense market revenues principally reflect the contribution from the PacStar acquisition;
  • Strong naval defense market revenue growth reflected the timing of production and acceleration of valve revenues on submarine and aircraft carrier programs, as well as the contribution from the 901D acquisition;
  • Reported operating income was $42 million, with Reported operating margin of 19.4%; and
  • Adjusted operating income was $53 million, up 20% from the prior year, while Adjusted operating margin decreased 130 basis points to 24.2%, as the benefits of our cost containment and restructuring initiatives were more than offset by higher research and development costs.

Power

(In millions)

Q4-2020

Q4-2019

Change

Sales

$

201.8

 

$

186.4

 

8

%

Reported operating income

$

36.8

 

$

36.0

 

2

%

Adjustments (1)

 

5.8

 

 

2.0

 

 

Adjusted operating income (1)

$

42.6

 

$

38.0

 

12

%

Adjusted operating margin (1)

 

21.1

%

 

20.4

%

70 bps

(1)

Adjusted results exclude restructuring costs and one-time transition and IT security costs associated with the relocation of our DRG business.

  • Sales of $202 million, up $15 million, or 8%;
  • Strong naval defense market revenue growth reflected higher production revenues on Virginia and Columbia class submarines, CVN-80 and CVN-81 aircraft carriers and higher service center sales;
  • Reduced power generation market sales principally reflect lower domestic and international aftermarket revenues, as well as lower revenues on the CAP1000 program;
  • Reported operating income was $37 million, with Reported operating margin of 18.2%; and
  • Adjusted operating income was $43 million, up 12%, while Adjusted operating margin increased 70 basis points to 21.1%, driven by improved overhead absorption on higher naval defense sales and the benefits of our cost containment and restructuring initiatives.

Full-Year 2021 Guidance

The Company’s full-year 2021 Adjusted financial guidance is as follows:

(In millions, except EPS)

2021 Reported

(GAAP)

Guidance

2021

Adjustments (1)

2021 Adjusted

(Non-GAAP)

Guidance

2021 Adjusted Chg

vs 2020 Restated

Total Sales

$2,490 – $2,540

($45)

$2,445 – $2,495

Up 6% – 8%

Operating Income

$402 – $412

$2

$404 – $414

Up 7% – 10%

Operating Margin

16.1% – 16.2%

40 bps

16.5% – 16.6%

Up 20 – 30 bps

Diluted EPS

$6.90 – $7.10

$0.10

$7.00 – $7.20

Up 6% – 9%

Diluted Shares Outstanding

41.4

41.4

 

Free Cash Flow

$330 – $360

$330 – $360

 

(1)

2021 Adjusted financial guidance used in comparisons to 2020 financial results excludes one-time backlog amortization and deferred revenue adjustments associated with the acquisition of PacStar, as well as our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited and our German valves business which was classified as held for sale, both in the fourth quarter of 2020.

New Segment Structure and Realignment:

Beginning in the first quarter of 2021, the Corporation is realigning its segments, as follows:

  • The Company will now operate under the following three segments: Aerospace & Industrial, Defense Electronics, and Naval & Power;
  • The Aerospace & Industrial segment will be comprised of actuation and sensors products and surface treatment services serving the defense and commercial aerospace markets, as well as electronic components and systems, industrial automation and surface treatment services serving the general industrial market;
  • The Defense Electronics segment will be comprised primarily of the electronics businesses serving the aerospace and defense markets;
  • The Naval & Power segment will be comprised of major naval propulsion equipment serving the naval defense market, as well as process and energy solutions serving both the nuclear and process markets; and
  • In addition, the Company is concentrating all of its valves related operations – which presently reside within the current Commercial/Industrial and Defense segments – solely into the new Naval & Power segment.

New End Market Structure and Realignment:

  • The Company’s new end market structure will consist of two primary markets, (1) Aerospace & Defense and (2) Commercial;
  • Aerospace & Defense markets will now represent approximately two-thirds of total 2021 estimated revenue, and will include all current Defense market revenues (aerospace, ground, naval) and all Commercial Aerospace market revenues;
  • Commercial markets will now represent approximately one-third of total 2021 estimated revenue and will be comprised of two major end markets: Power & Process and General Industrial;
  • The new Power & Process end market will be comprised of 1) Nuclear and 2) Process, while the new General Industrial end market will now be comprised of 1) Industrial Vehicles and 2) Industrial Automation and Services;
  • In addition, our new Power & Process market revenues will be concentrated within the new Naval & Power segment, and the new General Industrial market revenues will be concentrated within the new Aerospace & Industrial segment; and
  • Historical financial results in the new segment structure for 2020 and 2019 periods can be found in this release and available in the Investor Relations section of our website.

A more detailed breakdown of the Company’s 2021 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts can be found in the accompanying schedules.

Conference Call & Webcast Information

The Company will host a conference call to discuss fourth quarter and full-year 2020 financial results and expectations for 2021 guidance at 10:00 a.m. ET on Thursday, February 25, 2021. A live webcast of the call and the accompanying financial presentation, as well as a replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.

(Tables to Follow)

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

($’s in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

Change

 

December 31,

 

Change

 

2020

 

2019

 

$

 

%

 

2020

 

2019

 

$

 

%

Product sales

$

583,314

 

$

552,918

 

$

30,396

 

5%

$

2,041,086

 

$

2,073,530

 

$

(32,444

)

(2)%

Service sales

 

85,130

 

 

102,853

 

 

(17,723

)

(17)%

 

350,250

 

 

414,431

 

 

(64,181

)

(15)%

Total net sales

 

668,444

 

 

655,771

 

 

12,673

 

2%

 

2,391,336

 

 

2,487,961

 

 

(96,625

)

(4)%

 

 

 

 

 

 

 

 

 

Cost of product sales

 

373,676

 

 

343,286

 

 

30,390

 

9%

 

1,319,562

 

 

1,329,761

 

 

(10,199

)

(1)%

Cost of service sales

 

52,967

 

 

66,733

 

 

(13,766

)

(21)%

 

230,547

 

 

259,455

 

 

(28,908

)

(11)%

Total cost of sales

 

426,643

 

 

410,019

 

 

16,624

 

4%

 

1,550,109

 

 

1,589,216

 

 

(39,107

)

(2)%

 

 

 

 

 

 

 

 

 

Gross profit

 

241,801

 

 

245,752

 

 

(3,951

)

(2)%

 

841,227

 

 

898,745

 

 

(57,518

)

(6)%

 

 

 

 

 

 

 

 

 

Research and development expenses

 

20,653

 

 

18,017

 

 

2,636

 

15%

 

74,816

 

 

72,520

 

 

2,296

 

3%

Selling expenses

 

27,887

 

 

30,558

 

 

(2,671

)

(9)%

 

109,537

 

 

120,861

 

 

(11,324

)

(9)%

General and administrative expenses

 

72,773

 

 

76,523

 

 

(3,750

)

(5)%

 

303,288

 

 

301,411

 

 

1,877

 

1%

Impairment of assets held for sale

 

33,043

 

 

 

 

33,043

 

NM

 

33,043

 

 

 

 

33,043

 

NM

Restructuring expenses

 

10,965

 

 

 

 

10,965

 

NM

 

31,695

 

 

 

 

31,695

 

NM

 

 

 

 

 

 

 

 

 

Operating income

 

76,480

 

 

120,654

 

 

(44,174

)

(37)%

 

288,848

 

 

403,953

 

 

(115,105

)

(28)%

 

 

 

 

 

 

 

 

 

Interest expense

 

10,486

 

 

8,164

 

 

2,322

 

28%

 

35,545

 

 

31,347

 

 

4,198

 

13%

Other income, net

 

2,904

 

 

6,152

 

 

(3,248

)

(53)%

 

9,748

 

 

23,856

 

 

(14,108

)

(59)%

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

68,898

 

 

118,642

 

 

(49,744

)

(42)%

 

263,051

 

 

396,462

 

 

(133,411

)

(34)%

Provision for income taxes

 

(14,905

)

 

(29,234

)

 

14,329

 

(49)%

 

(61,659

)

 

(88,879

)

 

27,220

 

(31)%

Net earnings

$

53,993

 

$

89,408

 

$

(35,415

)

(40)%

$

201,392

 

$

307,583

 

$

(106,191

)

(35)%

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

Basic earnings per share

$

1.31

 

$

2.09

 

 

 

$

4.83

 

$

7.20

 

 

 

Diluted earnings per share

$

1.30

 

$

2.08

 

 

 

$

4.80

 

$

7.15

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

$

0.17

 

$

0.17

 

 

 

$

0.68

 

$

0.66

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

41,209

 

 

42,687

 

 

 

 

41,738

 

 

42,739

 

 

 

Diluted

 

41,460

 

 

42,986

 

 

 

 

41,999

 

 

43,016

 

 

 

 

 

NM = Not Meaningful

 

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($’s in thousands, except par value)

 

 

 

 

 

December 31,

 

December 31,

 

Change

 

2020

 

2019

 

%

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

198,248

 

$

391,033

 

(49)%

Receivables, net

 

588,718

 

 

632,194

 

(7)%

Inventories, net

 

428,879

 

 

424,835

 

1%

Assets held for sale

 

27,584

 

 

 

NM

Other current assets

 

57,395

 

 

81,729

 

(30)%

Total current assets

 

1,300,824

 

 

1,529,791

 

(15)%

Property, plant, and equipment, net

 

378,200

 

 

385,593

 

(2)%

Goodwill

 

1,455,137

 

 

1,166,680

 

25%

Other intangible assets, net

 

609,630

 

 

479,907

 

27%

Operating lease right-of-use assets, net

 

150,898

 

 

165,490

 

(9)%

Prepaid pension asset

 

92,531

 

 

 

NM

Other assets

 

34,114

 

 

36,800

 

(7)%

Total assets

$

4,021,334

 

$

3,764,261

 

7%

 

 

 

 

Liabilities

 

 

 

Current liabilities:

 

 

 

Current portion of long-term and short term debt

$

100,000

 

$

 

NM

Accounts payable

 

201,237

 

 

222,000

 

(9)%

Accrued expenses

 

140,200

 

 

164,744

 

(15)%

Income taxes payable

 

6,633

 

 

7,670

 

(14)%

Deferred revenue

 

253,411

 

 

276,115

 

(8)%

Liabilities held for sale

 

10,141

 

 

 

NM

Other current liabilities

 

98,755

 

 

74,202

 

33%

Total current liabilities

 

810,377

 

 

744,731

 

9%

Long-term debt, net

 

958,292

 

 

760,639

 

26%

Deferred tax liabilities

 

115,007

 

 

80,159

 

43%

Accrued pension and other postretirement benefit costs

 

98,345

 

 

138,635

 

(29)%

Long-term operating lease liability

 

133,069

 

 

145,124

 

(8)%

Long-term portion of environmental reserves

 

15,422

 

 

15,026

 

3%

Other liabilities

 

103,248

 

 

105,575

 

(2)%

Total liabilities

 

2,233,760

 

 

1,989,889

 

12%

 

 

 

 

Stockholders’ equity

 

 

 

Common stock, $1 par value

$

49,187

 

$

49,187

 

0%

Additional paid in capital

 

122,535

 

 

116,070

 

6%

Retained earnings

 

2,670,328

 

 

2,497,111

 

7%

Accumulated other comprehensive loss

 

(310,856

)

 

(325,274

)

(4)%

Less: cost of treasury stock

 

(743,620

)

 

(562,722

)

32%

Total stockholders’ equity

 

1,787,574

 

 

1,774,372

 

1%

 

 

 

 

Total liabilities and stockholders’ equity

$

4,021,334

 

$

3,764,261

 

7%

 

 

 

 

NM = Not Meaningful

 

 

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

SEGMENT INFORMATION (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

 

 

 

 

Change

 

 

 

 

 

Change

 

2020

 

2019

 

%

 

2020

 

2019

 

%

Sales:

 

 

 

 

 

 

Commercial/Industrial

$

249,219

 

$

296,093

 

(16)%

$

949,762

 

$

1,137,818

 

(17)%

Defense

 

217,469

 

 

173,252

 

26%

 

733,856

 

 

625,940

 

17%

Power

 

201,756

 

 

186,426

 

8%

 

707,718

 

 

724,203

 

(2)%

 

 

 

 

 

 

 

Total sales

$

668,444

 

$

655,771

 

2%

$

2,391,336

 

$

2,487,961

 

(4)%

 

 

 

 

 

 

 

Operating income (expense):

 

 

 

 

 

Commercial/Industrial

$

7,390

 

$

49,415

 

(85)%

$

81,581

 

$

179,637

 

(55)%

Defense

 

42,280

 

 

43,706

 

(3)%

 

140,406

 

 

137,286

 

2%

Power

 

36,783

 

 

35,999

 

2%

 

104,626

 

 

122,139

 

(14)%

 

 

 

 

 

 

 

Total segments

$

86,453

 

$

129,120

 

(33)%

$

326,613

 

$

439,062

 

(26)%

Corporate and other

 

(9,973

)

 

(8,466

)

(18)%

 

(37,765

)

 

(35,109

)

(8)%

 

 

 

 

 

 

 

Total operating income

$

76,480

 

$

120,654

 

(37)%

$

288,848

 

$

403,953

 

(28)%

 

 

 

 

 

 

 

Operating margins:

 

 

 

 

 

 

Commercial/Industrial

 

3.0

%

 

16.7

%

(1,370 bps)

 

8.6

%

 

15.8

%

(720 bps)

Defense

 

19.4

%

 

25.2

%

(580 bps)

 

19.1

%

 

21.9

%

(280 bps)

Power

 

18.2

%

 

19.3

%

(110 bps)

 

14.8

%

 

16.9

%

(210 bps)

Total Curtiss-Wright

 

11.4

%

 

4.9

%

650 bps

 

12.1

%

 

16.2

%

(410 bps)

 

 

 

 

 

 

 

Segment margins

 

12.9

%

 

19.7

%

(680 bps)

 

13.7

%

 

17.6

%

(390 bps)

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

SALES BY END MARKET (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

 

 

 

 

Change

 

 

 

 

 

Change

 

2020

 

2019

 

%

 

2020

 

2019

 

%

Defense markets:

 

 

 

 

 

 

Aerospace

$

130,715

 

$

122,886

 

6%

 

$

463,835

 

$

416,841

 

11%

Ground

 

44,082

 

 

24,049

 

83%

 

 

107,287

 

 

93,432

 

15%

Naval

 

196,011

 

 

144,405

 

36%

 

 

692,168

 

 

568,776

 

22%

Total Defense

$

370,808

 

$

291,340

 

27%

 

$

1,263,290

 

$

1,079,049

 

17%

 

 

 

 

 

 

 

 

 

 

 

 

Commercial markets:

 

 

 

 

 

 

 

 

 

 

 

Aerospace

$

82,810

 

$

112,801

 

(27)%

 

$

325,518

 

$

433,038

 

(25)%

Power Generation

 

90,924

 

 

113,979

 

(20)%

 

 

331,983

 

 

392,173

 

(15)%

General Industrial

 

123,902

 

 

137,651

 

(10)%

 

 

470,545

 

 

583,701

 

(19)%

Total Commercial

$

297,636

 

$

364,431

 

(18)%

 

$

1,128,046

 

$

1,408,912

 

(20)%

 

 

 

 

 

 

 

 

 

 

 

 

Total Curtiss-Wright

$

668,444

 

$

655,771

 

2%

 

$

2,391,336

 

$

2,487,961

 

(4)%

Use of Non-GAAP Financial Information (Unaudited)

The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these non-GAAP measures provide investors with additional insight into the Company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The Company’s presentation of its financials and guidance includes an Adjusted (non-GAAP) view that excludes an impairment of a German valves business classified as held for sale, significant restructuring costs in 2020 associated with its operations, including one-time actions taken in response to COVID-19, a non-cash impairment of capitalized development costs related to a commercial aerospace program, first year purchase accounting costs associated with its acquisitions, as well as one-time transition and IT security costs, and capital investments, specifically associated with the relocation of the DRG business in the Power segment. Transition costs include relocation of employees and equipment as well as overlapping facility and labor costs associated with the relocation. We believe this Adjusted view will provide improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.

The following definitions are provided:

Adjusted Operating Income, Operating Margin, Net Earnings and Diluted EPS

These Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share (EPS) under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions for current and prior year periods, specifically one-time inventory step-up, backlog amortization and transaction costs; (ii) one-time transition and IT security costs associated with the relocation of a business in the current year period; (iii) the non-cash impairment of capitalized development costs related to a commercial aerospace program; and (iv) significant restructuring costs in 2020 associated with its operations, and (v) an impairment of a German valves business classified as held for sale.

Organic Sales and Organic Operating Income

The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income excluding the impact of restructuring costs, impairment of assets held for sale, foreign currency fluctuations and contributions from acquisitions made during the last twelve months.

 

Three Months Ended

 

December 31,

 

2020 vs. 2019

 

Commercial/Industrial

 

Defense

 

Power

 

Total Curtiss-Wright

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

Organic

(18)%

 

(4)%

 

5%

 

6%

 

8%

 

18%

 

(5)%

 

5%

Acquisitions

1%

 

(1)%

 

20%

 

(8)%

 

0%

 

0%

 

6%

 

(3)%

Impairment of assets held for sale

0%

 

(67)%

 

0%

 

0%

 

0%

 

0%

 

0%

 

(28)%

Restructuring

0%

 

(13)%

 

0%

 

0%

 

0%

 

(16)%

 

0%

 

(11)%

Foreign Currency

1%

 

0%

 

1%

 

(1)%

 

0%

 

0%

 

1%

 

0%

Total

(16)%

 

(85)%

 

26%

 

(3)%

 

8%

 

2%

 

2%

 

(37)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

December 31,

 

2020 vs. 2019

 

Commercial/Industrial

 

Defense

 

Power

 

Total Curtiss-Wright

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

Organic

(18)%

 

(25)%

 

5%

 

6%

 

(2)%

 

0%

 

(8)%

 

(10)%

Acquisitions

1%

 

(1)%

 

12%

 

(2)%

 

0%

 

0%

 

4%

 

(1)%

Impairment of assets held for sale

0%

 

(18)%

 

0%

 

0%

 

0%

 

0%

 

0%

 

(8)%

Restructuring

0%

 

(11)%

 

0%

 

(3)%

 

0%

 

(14)%

 

0%

 

(9)%

Foreign Currency

0%

 

0%

 

0%

 

1%

 

0%

 

0%

 

0%

 

0%

Total

(17)%

 

(55)%

 

17%

 

2%

 

(2)%

 

(14)%

 

(4)%

 

(28)%

Free Cash Flow and Free Cash Flow Conversion

The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as cash flow provided by operating activities less capital expenditures. Adjusted free cash flow excludes: (i) a capital investment in the Power segment related to the new, state-of-the-art naval facility principally for DRG; (ii) a voluntary contribution to the Company’s corporate defined benefit pension plan made in the first quarter of 2020; and (iii) the cash impact from restructuring in 2020. The Corporation discloses free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as free cash flow divided by net earnings from continuing operations. Adjusted free cash flow conversion is defined as Adjusted free cash flow divided by Adjusted net earnings.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NON-GAAP FINANCIAL DATA (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2020

 

2019

 

2020

 

2019

Net cash provided by operating activities

$

257,396

 

$

262,389

 

$

261,180

 

$

421,404

 

Capital expenditures

 

(11,158

)

 

(19,833

)

 

(47,499

)

 

(69,752

)

Free cash flow

$

246,238

 

$

242,556

 

$

213,681

 

$

351,652

 

Voluntary pension contribution

 

 

 

 

 

150,000

 

 

 

Adjustment to capital expenditures (DRG facility investment)

 

139

 

 

5,298

 

 

10,251

 

 

19,284

 

Restructuring

 

9,582

 

 

 

 

20,258

 

 

 

Adjusted free cash flow

$

255,959

 

$

247,854

 

$

394,190

 

$

370,936

 

Adjusted free cash flow conversion

 

259

%

 

277

%

 

137

%

 

121

%

CURTISS-WRIGHT CORPORATION

2020 Reconciliation Reported (GAAP) to Adjusted (Non-GAAP)

(Old Segment Structure)

As of February 24, 2021

($’s in millions, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

Reported

(GAAP)

 

2019

Adjustments (1)

(Non-GAAP)

 

2019

Adjusted (1)

(Non-GAAP)

 

2020

Reported

(GAAP)

 

2020

Restructuring

Adjustments (2)

(Non-GAAP)

 

2020

Other

Adjustments (2)

(Non-GAAP)

 

2020

Adjusted (2)

(Non-GAAP)

 

2020 Chg vs

2019 Adjusted

Sales:

 

Commercial/Industrial

$

1,138

 

$

 

$

1,138

 

$

950

 

$

 

$

 

$

950

 

 

Defense

 

626

 

 

2

 

 

628

 

734

 

 

 

 

2

 

 

736

 

 

Power

 

724

 

 

 

 

724

 

708

 

 

 

 

 

 

708

 

 

Total sales

$

2,488

 

$

2

 

$

2,490

 

$

2,391

 

$

 

$

2

 

$

2,393

 

(4%)

 

Operating income:

 

Commercial/Industrial

$

180

 

$

 

$

180

 

$

82

 

$

20

 

$

36

 

$

138

 

 

Defense

 

137

 

 

2

 

 

140

 

140

 

 

3

 

 

23

 

 

166

 

 

Power

 

122

 

 

4

 

 

126

 

105

 

 

17

 

 

3

 

 

125

 

 

Total segments

 

439

 

 

7

 

 

446

 

327

 

 

41

 

 

61

 

 

429

 

 

Corporate and other

 

(35

)

 

 

 

(35

)

(38

)

 

 

 

 

 

(38

)

 

Total operating income

$

404

 

$

7

 

$

411

 

$

289

 

$

41

 

$

61

 

$

391

 

(5%)

 

Interest expense

$

(31

)

$

 

$

(31

)

$

(36

)

$

 

$

 

$

(36

)

 

Other income, net

 

24

 

 

 

 

24

 

10

 

 

2

 

 

10

 

 

21

 

 

Earnings before income taxes

 

397

 

 

7

 

 

403

 

263

 

 

43

 

 

71

 

 

377

 

 

Provision for income taxes

 

(89

)

 

(2

)

 

(90

)

(62

)

 

(10

)

 

(17

)

 

(88

)

 

Net earnings

$

308

 

$

5

 

$

313

 

$

201

 

$

33

 

$

54

 

$

289

 

 

 

Diluted earnings per share

$

7.15

 

$

0.12

 

$

7.27

 

$

4.80

 

$

0.78

 

$

1.30

 

$

6.87

 

(5%)

Diluted shares outstanding

 

43.0

 

 

43.0

 

42.0

 

 

42.0

 

 

Effective tax rate

 

22.4

%

 

22.4

%

23.4

%

 

23.4

%

 

 

Operating margins:

 

Commercial/Industrial

 

15.8

%

 

 

 

15.8

%

8.6

%

+220 bps +380 bps

 

14.5

%

(130 bps)

Defense

 

21.9

%

+40 bps

 

22.3

%

19.1

%

+40 bps +310 bps

 

22.6

%

30 bps

Power

 

16.9

%

+50 bps

 

17.4

%

14.8

%

+240 bps +40 bps

 

17.6

%

20 bps

Total operating margin

 

16.2

%

+30 bps

 

16.5

%

12.1

%

+170 bps +260 bps

 

16.3

%

(20 bps)

 

Free cash flow (3)

$

352

 

$

19

 

$

371

 

$

214

 

$

20

 

$

160

 

$

394

 

 

 

Notes: Full year amounts may not add due to rounding.

(1) 2019 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding the impact of first year purchase accounting costs associated with acquisitions (Defense segment), specifically one-time backlog amortization and transaction costs, as well as one-time transition and IT security costs related to the relocation of the DRG business (Power Segment).

(2) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 Adjusted financial results also exclude an impairment loss of $33 million for our industrial valve business in Germany, which was classified as held for sale during the fourth quarter of 2020.

(3) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2019 Adjusted Free Cash Flow excludes a $19 million capital investment in the Power segment related to construction of a new, state-of-the-art naval facility for the DRG business. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG.

CURTISS-WRIGHT CORPORATION

2021 Segment Reorganization

As of February 24, 2021

($’s in millions, except per share data)

 

2020 Adjusted

(Non-GAAP)

 

Division

Realignment

 

Exiting

Non-Core

Operations

 

2020 Adjusted (2,3)

(Non-GAAP)

 

 

2021

Adjusted Guidance (2,4)

(Non-GAAP)

 

 

(Prior Structure)

 

 

 

 

 

(New Segment

Structure)

 

(New Segment Structure)

 

 

2021 Chg vs

2020 Adjusted

 

 

 

 

 

 

Low

 

High

 

Sales: Sales:

 

Commercial/Industrial

$

950

 

$

(144

)

$

(67

)

$

738

 

Aerospace & Industrial

$

745

 

$

760

 

1 – 3%

Defense

 

736

 

 

(125

)

 

 

 

611

 

Defense Electronics

 

740

 

 

755

 

21 – 24%

Power

 

708

 

 

269

 

 

(26

)

 

951

 

Naval & Power

 

960

 

 

980

 

1 – 3%

Total sales

$

2,393

 

$

 

$

(93

)

$

2,300

 

Total sales

$

2,445

 

$

2,495

 

6 to 8%

 

Operating income: Operating income:

 

Commercial/Industrial

$

138

 

$

(24

)

$

(16

)

$

98

 

Aerospace & Industrial

$

112

 

$

115

 

14 – 18%

Defense

 

166

 

 

(22

)

 

 

 

144

 

Defense Electronics

 

157

 

 

162

 

9 – 12%

Power

 

125

 

 

46

 

 

 

 

171

 

Naval & Power

 

172

 

 

177

 

1 – 4%

Total segments

 

429

 

 

 

 

(16

)

 

413

 

Total segments

 

441

 

 

454

 

 

Corporate and other

 

(38

)

 

 

 

 

 

(38

)

Corporate and other

 

(38

)

 

(39

)

 

Total operating income

$

391

 

$

 

$

(16

)

$

375

 

Total operating income

$

404

 

$

414

 

7 to 10%

 

Interest expense

$

(36

)

$

 

$

 

$

(36

)

Interest expense

$

(41

)

$

(42

)

 

Other income, net

 

21

 

 

 

 

 

 

21

 

Other income, net

 

15

 

 

17

 

 

Earnings before income taxes

 

377

 

 

 

 

(16

)

 

361

 

Earnings before income taxes

 

378

 

 

389

 

 

Provision for income taxes

 

(88

)

 

 

 

4

 

 

(85

)

Provision for income taxes

 

(89

)

 

(92

)

 

Net earnings

$

289

 

$

 

$

(12

)

$

277

 

Net earnings

$

290

 

$

298

 

 

 

Diluted earnings per share

$

6.87

 

$

 

$

(0.29

)

$

6.59

 

Diluted earnings per share

$

7.00

 

$

7.20

 

6 to 9%

Diluted shares outstanding

 

42.0

 

 

42.0

 

Diluted shares outstanding

 

41.4

 

 

41.4

 

 

Effective tax rate

 

23.4

%

 

23.4

%

Effective tax rate

 

23.5

%

 

23.5

%

 

 

Operating margins: Operating margins:

 

Commercial/Industrial

 

14.5

%

 

NM

 

 

NM

 

 

13.3

%

Aerospace & Industrial

 

15.0

%

 

15.2

%

170 to 190 bps

Defense

 

22.6

%

 

NM

 

 

NM

 

 

23.6

%

Defense Electronics

 

21.2

%

 

21.4

%

(220 to 240 bps)

Power

 

17.6

%

 

NM

 

 

NM

 

 

18.0

%

Naval & Power

 

18.0

%

 

18.1

%

0 to 10 bps

Total operating margin

 

16.3

%

 

NM

 

 

NM

 

 

16.3

%

Total operating margin

 

16.5

%

 

16.6

%

20 to 30 bps

 

Free cash flow (5)

$

394

 

$

 

$

 

$

394

 

Free cash flow

$

330

 

$

360

 

 

 

Notes:

 

(1) Full year amounts may not add due to rounding

(2) The above supplemental financial information by reportable segment for the 2020 and 2021 reporting periods reflects the Corporation’s first quarter 2021 segment reorganization.

(3) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, and one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 financial results excludes our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020.

(4) 2021 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding the first quarter 2021 segment reorganization, our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, and a one-time, $3 million pension settlement charge related to the retirement of two former executives (within non-operating income).

(5) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG.

CURTISS-WRIGHT CORPORATION
2021 Guidance (New Segment Structure)
As of February 24, 2021
($’s in millions, except per share data)
 
2020
Adjusted (1,3)
(Non-GAAP)
2021
Reported Guidance
(GAAP)
Exiting Non-
Core Operations
2021
Adjustments (2)
(Non-GAAP)
2021
Adjusted Guidance (2)
(Non-GAAP)
Low High Low High 2021 Chg vs
2020 Adjusted
Sales:
Aerospace & Industrial

$

738

 

$

759

 

$

774

 

$

(14

)

$

 

$

745

 

$

760

 

1 – 3%

Defense Electronics

 

611

 

 

740

 

 

755

 

 

 

 

 

 

740

 

 

755

 

21 – 24%

Naval & Power

 

951

 

 

991

 

 

1,011

 

 

(31

)

 

 

 

960

 

 

980

 

1 – 3%

Total sales

$

2,300

 

$

2,490

 

$

2,540

 

$

(45

)

$

 

$

2,445

 

$

2,495

 

6 to 8%

 

Operating income:

 

Aerospace & Industrial

$

98

 

$

114

 

$

117

 

$

(2

)

$

 

$

112

 

$

115

 

14 – 18%

Defense Electronics

 

144

 

 

151

 

 

156

 

 

 

 

6

 

 

157

 

 

162

 

9 – 12%

Naval & Power

 

171

 

 

174

 

 

179

 

 

(2

)

 

 

 

172

 

 

177

 

1 – 4%

Total segments

 

413

 

 

439

 

 

452

 

 

(4

)

 

6

 

 

441

 

 

454

 

 

Corporate and other

 

(38

)

 

(38

)

 

(39

)

 

 

 

 

 

(38

)

 

(39

)

 

Total operating income

$

375

 

$

402

 

$

412

 

$

(4

)

$

6

 

$

404

 

$

414

 

7 to 10%

 

Interest expense

$

(36

)

$

(41

)

$

(42

)

$

 

$

 

$

(41

)

$

(42

)

 

Other income, net

 

21

 

 

12

 

 

13

 

 

 

 

3

 

 

15

 

 

17

 

 

Earnings before income taxes

 

361

 

 

373

 

 

384

 

 

(4

)

 

9

 

 

378

 

 

389

 

 

Provision for income taxes

 

(85

)

 

(87

)

 

(90

)

 

1

 

 

(2

)

 

(89

)

 

(92

)

 

Net earnings

$

277

 

$

286

 

$

294

 

$

(3

)

$

7

 

$

290

 

$

298

 

 

 

Diluted earnings per share

$

6.59

 

$

6.90

 

$

7.10

 

$

(0.07

)

$

0.17

 

$

7.00

 

$

7.20

 

6 to 9%

Diluted shares outstanding

 

42.0

 

 

41.4

 

 

41.4

 

 

41.4

 

 

41.4

 

 

Effective tax rate

 

23.4

%

 

23.5

%

 

23.5

%

 

23.5

%

 

23.5

%

 

 

Operating margins:

 

Aerospace & Industrial

 

13.3

%

 

15.0

%

 

15.1

%

+10 bps

 

 

 

15.0

%

 

15.2

%

170 to 190 bps

Defense Electronics

 

23.6

%

 

20.4

%

 

20.6

%

 

 

+80 bps

 

21.2

%

 

21.4

%

(220 to 240 bps)

Naval & Power

 

18.0

%

 

17.6

%

 

17.7

%

+40 bps

 

 

 

18.0

%

 

18.1

%

0 to 10 bps

Total operating margin

 

16.3

%

 

16.1

%

 

16.2

%

+20 bps +20 bps

 

16.5

%

 

16.6

%

20 to 30 bps

 
Free cash flow

$

394

 

$

330

 

$

360

 

 

 

 

 

$

330

 

$

360

 

 
Notes: Full year amounts may not add due to rounding. All financial information by reportable segment for the 2020 and 2021 reporting periods reflects the Corporation’s first quarter 2021 segment reorganization.
(1) 2020 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding restructuring costs, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, a non-cash impairment of capitalized development costs related to a commercial aerospace program, and one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity. 2020 financial results excludes our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020.
(2) 2021 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding our build-to-print actuation product line supporting the Boeing 737 MAX program which we exited, as well as our German valves business which was classified as held for sale, both in the fourth quarter of 2020, first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, and a one-time, $3 million pension settlement charge related to the retirement of two former executives (within non-operating income).
(3) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2020 Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Company’s corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $10 million capital investment related to the new, state-of-the-art naval facility principally for DRG.
CURTISS-WRIGHT CORPORATION
2021 Sales Growth Guidance by End Market
As of February 24, 2021
 
Aerospace & Defense Markets

2021 % Change vs 2020

Aerospace Defense

2 – 4%

Ground Defense

100 – 105%

Naval Defense

Flat

Commercial Aerospace

Flat

Total Aerospace & Defense

6 – 8%

 

Commercial Markets

 

Power & Process

3 – 5%

General Industrial

9 – 11%

Total Commercial

6 – 8%

 

Total Curtiss-Wright Sales

6 – 8%

 
Notes:
(1) This table reflects the Company’s new End Market Structure and Realignment effective Q1 2021, with all Commercial Aerospace market revenues shifting into a newly defined Total Aerospace & Defense market.
(2) The new Power & Process end market will be comprised of a) Nuclear and b) Process, while the new General Industrial end market will now be comprised of a) Industrial Vehicles and b) Industrial Automation and Services.
(3) Based on these changes, our new Power & Process revenues will be concentrated within the new Naval & Power segment, and the new General Industrial sales will be concentrated within the new Aerospace & Industrial segment.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
ADJUSTED HISTORICAL SEGMENT INFORMATION (UNAUDITED)
($’s in thousands)
The Corporation is issuing the below supplemental financial information by reportable segment for the 2020 and 2019 prior quarterly reporting periods to reflect the Corporation’s first quarter 2021 segment reorganization.
 
Three Months Ended
3/31/2020 6/30/2020 9/30/2020 12/31/2020 FY 2020
Sales:
Aerospace & Industrial

$

208,033

 

$

165,701

 

$

172,243

 

$

192,214

 

$

738,191

 

Defense Electronics

 

139,582

 

 

139,813

 

 

149,073

 

 

182,173

 

 

610,641

 

Naval & Power

 

228,048

 

 

227,189

 

 

228,626

 

 

267,079

 

 

950,943

 

Total sales

$

575,663

 

$

532,703

 

$

549,942

 

$

641,466

 

$

2,299,774

 

 
Operating income (expense):
Aerospace & Industrial

$

28,420

 

$

12,798

 

$

22,898

 

$

33,718

 

$

97,835

 

Defense Electronics

 

26,840

 

 

33,545

 

 

38,649

 

 

45,337

 

 

144,372

 

Naval & Power

 

33,499

 

 

38,324

 

 

42,002

 

 

57,041

 

 

170,866

 

Total segments

$

88,760

 

$

84,668

 

$

103,549

 

$

136,096

 

$

413,073

 

Corporate and other

 

(11,816

)

 

(8,114

)

 

(7,740

)

 

(9,908

)

 

(37,579

)

Total operating income

$

76,943

 

$

76,554

 

$

95,809

 

$

126,188

 

$

375,494

 

 
Operating margins:
Aerospace & Industrial

 

13.7

%

 

7.7

%

 

13.3

%

 

17.5

%

 

13.3

%

Defense Electronics

 

19.2

%

 

24.0

%

 

25.9

%

 

24.9

%

 

23.6

%

Naval & Power

 

14.7

%

 

16.9

%

 

18.4

%

 

21.4

%

 

18.0

%

Total Curtiss-Wright

 

13.4

%

 

14.4

%

 

17.4

%

 

19.7

%

 

16.3

%

 
Segment margins

 

15.4

%

 

15.9

%

 

18.8

%

 

21.2

%

 

18.0

%

 
 
Three Months Ended
3/31/2019 6/30/2019 9/30/2019 12/31/2019 FY 2019
Sales:
Aerospace & Industrial

$

215,219

 

$

230,304

 

$

218,066

 

$

228,887

 

$

892,477

 

Defense Electronics

 

110,301

 

 

133,709

 

 

134,965

 

 

146,468

 

 

525,442

 

Naval & Power

 

229,406

 

 

247,971

 

 

233,412

 

 

250,100

 

 

960,888

 

Total sales

$

554,926

 

$

611,983

 

$

586,443

 

$

625,455

 

$

2,378,807

 

 
Operating income (expense):
Aerospace & Industrial

$

26,628

 

$

38,736

 

$

30,109

 

$

33,510

 

$

128,984

 

Defense Electronics

 

16,864

 

 

28,511

 

 

36,407

 

 

39,353

 

 

121,136

 

Naval & Power

 

34,989

 

 

45,598

 

 

41,643

 

 

51,826

 

 

174,057

 

Total segments

$

78,482

 

$

112,845

 

$

108,160

 

$

124,689

 

$

424,176

 

Corporate and other

 

(9,115

)

 

(10,314

)

 

(6,917

)

 

(8,441

)

 

(34,787

)

Total operating income

$

69,367

 

$

102,530

 

$

101,243

 

$

116,248

 

$

389,389

 

 
Operating margins:
Aerospace & Industrial

 

12.4

%

 

16.8

%

 

13.8

%

 

14.6

%

 

14.5

%

Defense Electronics

 

15.3

%

 

21.3

%

 

27.0

%

 

26.9

%

 

23.1

%

Naval & Power

 

15.3

%

 

18.4

%

 

17.8

%

 

20.7

%

 

18.1

%

Total Curtiss-Wright

 

12.5

%

 

16.8

%

 

17.3

%

 

18.6

%

 

16.4

%

 
Segment margins

 

14.1

%

 

18.4

%

 

18.4

%

 

19.9

%

 

17.8

%

 
Notes: Full year amounts may not add due to rounding.

About Curtiss-Wright Corporation

Curtiss-Wright Corporation (NYSE: CW) is a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing reliable solutions through trusted customer relationships. The company employs approximately 8,200 people worldwide. For more information, visit www.curtisswright.com.

Certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the Company’s acquisitions, future cash flow from operations, and potential impacts of the COVID-19 pandemic are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; the impact of a global pandemic or national epidemic, and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and subsequent reports filed with the Securities and Exchange Commission.

This press release and additional information are available at www.curtisswright.com.