CURTISS-WRIGHT CORPORATION Curtiss-Wright Corporation, Page 1
NEWS RELEASE
CURTISS-WRIGHT REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS AND INCREASES FULL-YEAR 2024 GUIDANCE FOR SALES, OPERATING INCOME AND EPS
DAVIDSON, N.C. - May 1, 2024 - Curtiss-Wright Corporation (NYSE: CW) reports financial results for the first quarter ended March 31, 2024.
First Quarter 2024 Highlights:
- Reported sales of $713 million, up 13%, operating income of $100 million, up 27%, operating margin of 14.0%, and diluted earnings per share (EPS) of $1.99;
- Adjusted operating income of $100 million, up 23%;
- Adjusted operating margin of 14.0%, up 110 basis points;
- Adjusted diluted EPS of $1.99, up 30%; and
- New orders of $901 million, up 26%, reflected a book-to-bill that exceeded 1.25x driven by strong demand within our Aerospace & Defense (A&D) markets.
Raised Full-Year 2024 Financial Guidance:
- Sales increased to new range of 5% to 7% growth (previously 4% to 6%) and continues to reflect growth in all A&D and Commercial end markets;
- Operating income increased to new range of 5% to 8% growth (previously 4% to 7%);
- Maintained operating margin range of 17.4% to 17.6%, up 0 to 20 basis points compared with the prior year;
- Diluted EPS increased to new range of $10.10 to $10.40, up 8% to 11% (previously $10.00 to $10.30, up 7% to 10%); and
- Maintained free cash flow range of $415 to $435 million, which continues to reflect nearly 110% FCF conversion.
"Curtiss-Wright delivered strong first quarter 2024 results, exceeding our overall expectations, highlighted by significant growth in sales and operating income, continued operating margin expansion, and diluted EPS of $1.99, which increased 30% year-over-year," said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. "Our results included a very strong performance in the Defense Electronics segment, which was partially offset by reduced profitability in the Naval & Power segment, principally related to a naval contract adjustment that impacted both the first quarter and full-year outlook for this segment."
Curtiss-Wright Corporation, Page 2
"Based upon our strong overall start to the year and the continued strength in our order book, we have increased our full-year 2024 sales, operating income and diluted EPS guidance as we continue to successfully execute on our Pivot to Growth strategy. We now expect to deliver total sales growth of 5% to 7%, including the contribution from our recent commercial nuclear acquisition of WSC, Inc., continued operating margin expansion while increasing R&D investments, and diluted EPS growth of 8% to 11%, while we maintain our outlook for strong free cash flow conversion well in excess of 100%. We look forward to discussing our alignment with the favorable secular growth trends driving our end markets and our new long-term financial targets at our upcoming investor day on May 21st."
Curtiss-Wright Corporation, Page 3
First Quarter 2024 Operating Results
(In millions) | Q1-2024 | Q1-2023 | Change | ||
Reported | |||||
Sales | $ | 713 | $ | 631 | 13% |
Operating income | $ | 100 | $ | 79 | 27% |
Operating margin | 14.0% | 12.5% | 150 bps | ||
Adjusted (1) | |||||
Sales | $ | 713 | $ | 631 | 13% |
Operating income | $ | 100 | $ | 81 | 23% |
Operating margin | 14.0% | 12.9% | 110 bps | ||
- Reconciliations of Reported to Adjusted operating results are available in the Appendix.
- Sales of $713 million, up $82 million, or 13% compared with the prior year;
- Total A&D market sales increased 20%, while total Commercial market sales were essentially flat;
- In our A&D markets, we experienced higher sales in the defense markets principally driven by continued strong demand for our defense electronics products, as well as strong growth in OEM sales in the commercial aerospace market;
- In our Commercial markets, we experienced solid growth in the power & process markets, while sales in the general industrial market declined modestly; and
- Adjusted operating income of $100 million increased 23%, while Adjusted operating margin increased 110 basis points to 14.0%, principally driven by favorable overhead absorption and mix on higher revenues in the Defense Electronics segment, partially offset by an unfavorable naval contract adjustment in the Naval & Power segment.
Curtiss-Wright Corporation, Page 4
First Quarter 2024 Segment Performance
Aerospace & Industrial
(In millions) | Q1-2024 | Q1-2023 | Change | ||
Reported | |||||
Sales | $ | 219 | $ | 202 | 8% |
Operating income | $ | 27 | $ | 27 | 3% |
Operating margin | 12.5% | 13.1% | (60 bps) | ||
Adjusted (1) | |||||
Sales | $ | 219 | $ | 202 | 8% |
Operating income | $ | 27 | $ | 27 | 3% |
Operating margin | 12.5% | 13.1% | (60 bps) | ||
- Note: There were no adjustments to segment operating results.
- Sales of $219 million, up $17 million, or 8%;
- Strong revenue growth in the commercial aerospace market reflected higher OEM sales of actuation and sensors products, as well as surface treatment services, on narrowbody and widebody platforms;
- Higher sales in the aerospace defense market reflected increased actuation development on various fighter jet programs;
- General industrial market revenues declined modestly, as the benefit of new product introductions supporting the electrification of vehicles was more than offset by reduced sales of industrial vehicle products on off-highway vehicle platforms, and lower sales of industrial automation and services; and
- Operating income was $27 million, up 3% from the prior year, while operating margin decreased 60 basis points to 12.5%, as favorable absorption on higher sales was offset by unfavorable mix and the timing of development programs.
Curtiss-Wright Corporation, Page 5
Defense Electronics
(In millions) | Q1-2024 | Q1-2023 | Change | ||
Reported | |||||
Sales | $ | 212 | $ | 162 | 31% |
Operating income | $ | 48 | $ | 23 | 106% |
Operating margin | 22.7% | 14.4% | 830 bps | ||
Adjusted (1) | |||||
Sales | $ | 212 | $ | 162 | 31% |
Operating income | $ | 48 | $ | 23 | 106% |
Operating margin | 22.7% | 14.4% | 830 bps | ||
- Note: There were no adjustments to segment operating results.
- Sales of $212 million, up $50 million, or 31%;
- Higher revenue in the aerospace defense market was principally driven by increased sales of our embedded computing equipment on various fighter jet, unmanned aerial vehicle and helicopter programs;
- Strong revenue growth in the ground defense market reflected the robust demand and higher sales of tactical battlefield communications equipment;
- Higher commercial aerospace market revenue reflected increased OEM sales of avionics and electronics on various platforms; and
- Operating income was $48 million, up 106% from the prior year, while operating margin increased 830 basis points to 22.7%, mainly reflecting improved absorption and mix on higher revenues.
Curtiss-Wright Corporation, Page 6
Naval & Power
(In millions) | Q1-2024 | Q1-2023 | Change | ||
Reported | |||||
Sales | $ | 282 | $ | 266 | 6% |
Operating income | $ | 35 | $ | 38 | (7%) |
Operating margin | 12.5% | 14.3% | (180 bps) | ||
Adjusted (1) | |||||
Sales | $ | 282 | $ | 266 | 6% |
Operating income | $ | 35 | $ | 41 | (13%) |
Operating margin | 12.5% | 15.3% | (280 bps) | ||
- Reconciliations of Reported to Adjusted operating results are available in the Appendix.
- Sales of $282 million, up $16 million, or 6%;
- 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 the Columbia-class submarine, partially offset by timing of revenues on the Virginia-class submarine and CVN-80 aircraft carrier programs;
- Higher power & process market revenues mainly reflected increased commercial nuclear aftermarket sales supporting the maintenance of operating reactors in the U.S. and Canada; and
- Adjusted operating income was $35 million, down 13% from the prior year, while adjusted operating margin decreased 280 basis points to 12.5%, as favorable absorption on higher revenues was more than offset by an unfavorable naval contract adjustment.
Curtiss-Wright Corporation, Page 7
Free Cash Flow
(In millions) | Q1-2024 | Q1-2023 | Change | ||
Net cash used for operating activities | $ | (46) | $ | (92) | 50% |
Capital expenditures | (12) | (11) | (13%) | ||
Reported free cash flow | $ | (58) | $ | (102) | 44% |
Adjusted free cash flow (1) | $ | (58) | $ | (92) | 37% |
- A reconciliation of Reported to Adjusted free cash flow is available in the Appendix.
- Reported free cash flow of ($58) million increased $45 million, primarily due to higher cash earnings and the timing of tax payments, as well as a $10 million legal settlement payment made in the prior year;
- Adjusted free cash flow of ($58) million increased $35 million;
- Capital expenditures increased $1 million compared with the prior year period, primarily due to higher growth investments in the Defense Electronics segment.
New Orders and Backlog
- New orders of $901 million increased 26% compared with the prior year and generated an overall book-to-bill that exceeded 1.25x, principally driven by strong demand for defense electronics and naval defense products within our A&D markets; and
- Backlog of $3.1 billion, up 7% from December 31, 2023, reflects higher demand in both our A&D and Commercial markets.
Share Repurchase and Dividends
- During the first quarter, the Company repurchased 52,612 shares of its common stock for approximately $12 million; and
- The Company declared a quarterly dividend of $0.20 a share.
Curtiss-Wright Corporation, Page 8
Full-Year 2024 Guidance
The Company is increasing its full-year 2024 Adjusted financial guidance (1) as follows:
($ In millions, | 2024 Adjusted | 2024 Adjusted | Change vs 2023 | ||
Non-GAAP Guidance | Non-GAAP Guidance | Adjusted | |||
except EPS) | |||||
(Prior) | (Current) | (Current) | |||
Total Sales | $2,960 | - $3,010 | $2,985 | - $3,035 | Up 5% - 7% |
Operating Income | $514 | - $528 | $518 | - $533 | Up 5% - 8% |
Operating Margin | 17.4% | - 17.6% | 17.4% | - 17.6% | Up 0 - 20 bps |
Diluted EPS | $10.00 | - $10.30 | $10.10 | - $10.40 | Up 8% - 11% |
Free Cash Flow | $415 | - $435 | $415 | - $435 | Up 0% - 5% |
- Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix.
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A more detailed breakdown of the Company's 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright's website.
Conference Call & Webcast Information
The Company will host a conference call to discuss its first quarter 2024 financial results and business outlook at 10:00 a.m. ET on Thursday, May 2, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company's website at www.curtisswright.com.
(Tables to Follow)
Curtiss-Wright Corporation, Page 9
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
($'s in thousands, except per share data)
Three Months Ended | ||||||
March 31, | ||||||
2024 | 2023 | |||||
Product sales | $ | 595,704 | $ | 524,881 | ||
Service sales | 117,463 | 105,979 | ||||
Total net sales | 713,167 | 630,860 | ||||
Cost of product sales | 389,477 | 343,757 | ||||
Cost of service sales | 69,935 | 65,695 | ||||
Total cost of sales | 459,412 | 409,452 | ||||
Gross profit | 253,755 | 221,408 | ||||
Research and development expenses | 22,980 | 22,024 | ||||
Selling expenses | 36,765 | 32,425 | ||||
General and administrative expenses | 94,049 | 88,344 | ||||
Operating income | 99,961 | 78,615 | ||||
Interest expense | 10,570 | 12,944 | ||||
Other income, net | 9,608 | 7,767 | ||||
Earnings before income taxes | 98,999 | 73,438 | ||||
Provision for income taxes | (22,504) | (16,592) | ||||
Net earnings | $ | 76,495 | $ | 56,846 | ||
Net earnings per share: | ||||||
Basic earnings per share | $ | 2.00 | $ | 1.48 | ||
Diluted earnings per share | $ | 1.99 | $ | 1.48 | ||
Dividends per share | $ | 0.20 | $ | 0.19 | ||
Weighted average shares outstanding: | ||||||
Basic | 38,254 | 38,303 | ||||
Diluted | 38,431 | 38,516 |
Curtiss-Wright Corporation, Page 10
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($'s in thousands, except par value)
March 31, | December 31, | |||
2024 | 2023 | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 338,034 | $ | 406,867 |
Receivables, net | 776,662 | 732,678 | ||
Inventories, net | 553,037 | 510,033 | ||
Other current assets | 69,483 | 67,502 | ||
Total current assets | 1,737,216 | 1,717,080 | ||
Property, plant, and equipment, net | 329,347 | 332,796 | ||
Goodwill | 1,552,343 | 1,558,826 | ||
Other intangible assets, net | 542,335 | 557,612 | ||
Operating lease right-of-use assets, net | 133,846 | 141,435 | ||
Prepaid pension asset | 267,334 | 261,869 | ||
Other assets | 49,661 | 51,351 | ||
Total assets | $ | 4,612,082 | $ | 4,620,969 |
Liabilities | ||||
Current liabilities: | ||||
Current portion of long-term debt | $ | 90,000 | $ | - |
Accounts payable | 233,818 | 243,833 | ||
Accrued expenses | 158,089 | 188,039 | ||
Deferred revenue | 297,545 | 303,872 | ||
Other current liabilities | 78,823 | 70,800 | ||
Total current liabilities | 858,275 | 806,544 | ||
Long-term debt, net | 960,009 | 1,050,362 | ||
Deferred tax liabilities | 128,000 | 132,319 | ||
Accrued pension and other postretirement benefit costs | 67,446 | 66,875 | ||
Long-term operating lease liability | 111,981 | 118,611 | ||
Long-term portion of environmental reserves | 13,439 | 12,784 | ||
Other liabilities | 92,753 | 105,061 | ||
Total liabilities | $ | 2,231,903 | $ | 2,292,556 |
Stockholders' equity | ||||
Common stock, $1 par value | $ | 49,187 | $ | 49,187 |
Additional paid in capital | 133,166 | 140,182 | ||
Retained earnings | 3,556,572 | 3,487,751 | ||
Accumulated other comprehensive loss | (228,255) | (213,223) | ||
Less: cost of treasury stock | (1,130,491) | (1,135,484) | ||
Total stockholders' equity | 2,380,179 | 2,328,413 | ||
Total liabilities and stockholders' equity | $ | 4,612,082 | $ | 4,620,969 |
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Curtiss-Wright Corporation published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 11:52:35 UTC.
