cw-202405010000026324False00000263242024-05-012024-05-01
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 1, 2024
CURTISS-WRIGHT CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
| | | | | | | | |
| Delaware | 1-134 | 13-0612970 |
(State or Other
Jurisdiction of
Incorporation) | (Commission File
Number) | (IRS Employer
Identification No.) |
| | | | | | | | | | | |
| 130 Harbour Place Drive, Suite 300 | | |
| Davidson, | North Carolina | | 28036 |
| (Address of principal executive offices) | | (Zip Code) |
Registrant's telephone number, including area code: (704) 869-4600
--------------
Not applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | |
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock | CW | New York Stock Exchange |
| | | | | | | | | | | |
| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). | |
| | Emerging growth company | ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
Section 2 - Financial Information
Item 2.02. Results of Operations and Financial Condition
On Wednesday, May 1, 2024, the Company issued a press release announcing financial results for the first quarter ended March 31, 2024. A conference call and webcast presentation will be held on Thursday, May 2, 2024 at 10:00 am ET for management to discuss the Company’s first quarter 2024 financial performance as well as expectations for 2024 financial performance. Lynn M. Bamford, Chair and Chief Executive Officer, and K. Christopher Farkas, Vice President and Chief Financial Officer, will host the call. A copy of the press release and the webcast slide presentation are attached hereto as Exhibits 99.1 and 99.2.
The financial press release, access to the webcast, and the accompanying financial presentation will be posted on Curtiss-Wright's website at www.curtisswright.com. In addition, the dial-in number for domestic callers is (800) 225-9448, while international callers can dial (203) 518-9708. The conference ID code is CWQ124. For those unable to join the live presentation, a webcast replay will be available within the Investor Relations section on the Company’s website beginning one hour after the call takes place.
The information contained in this Current Report, including Exhibits 99.1 and 99.2, are being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this report shall not be incorporated by reference into any filing of the registrant with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filings.
Item 9.01 Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
99.1 Press Release dated May 1, 2024
99.2 Presentation shown during investor and securities analyst webcast on May 2, 2024
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | | | |
| | CURTISS-WRIGHT CORPORATION |
| | By: /s/ K. Christopher Farkas |
| | K. Christopher Farkas |
| | Vice President and |
| | Chief Financial Officer |
| | |
Date: May 2, 2024 | | |
EXHIBIT INDEX
| | | | | | | | |
| Exhibit Number | | Description |
| 99.1 | | |
| 99.2 | | |
Curtiss-Wright Corporation, Page 1
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."
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 |
(1)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 3
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) |
(1)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 4
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 |
(1)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 5
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) |
(1)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 6
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 | % |
(1)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 $0.20 a share.
Curtiss-Wright Corporation, Page 7
Full-Year 2024 Guidance
The Company is increasing its full-year 2024 Adjusted financial guidance (1) as follows:
| | | | | | | | | | | |
($ In millions,
except EPS) | 2024 Adjusted Non-GAAP Guidance (Prior) | 2024 Adjusted Non-GAAP Guidance (Current) | Change vs 2023 Adjusted (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 - $435 | Up 0% - 5% |
(1)Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix.
**********
A more detailed breakdown of the Company’s 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright’s website.
Conference Call & Webcast Information
The Company will host a conference call to discuss its first quarter 2024 financial results and business outlook at 10:00 a.m. ET on Thursday, May 2, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.
(Tables to Follow)
Curtiss-Wright Corporation, Page 8
| | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) |
| ($'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 9
| | | | | | | | | | | | | | |
| 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 | |
Curtiss-Wright Corporation, Page 10
Use and Definitions of Non-GAAP Financial Information (Unaudited)
The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.
The following definitions are provided:
Adjusted Sales, Operating Income, Operating Margin, Net Earnings and Diluted EPS
These Adjusted financials are defined as Reported Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; and (ii) the sale or divestiture of a business or product line, as applicable.
Curtiss-Wright Corporation, Page 11
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
| RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED) |
| ($'s in thousands) |
| | | | | | | | | | | | | | | |
| Three Months Ended | | Three Months Ended | | | | |
| March 31, 2024 | | March 31, 2023 | | % Change |
| As Reported | | Adjustments | | Adjusted | | As Reported | | Adjustments | | Adjusted | | Reported | | Adjusted |
| Sales: | | | | | | | | | | | | | | | |
| Aerospace & Industrial | $ | 219,325 | | | $ | — | | | $ | 219,325 | | | $ | 202,447 | | | $ | — | | | $ | 202,447 | | | 8 | % | | 8 | % |
| Defense Electronics | 211,741 | | | — | | | 211,741 | | | 162,154 | | | — | | | 162,154 | | | 31 | % | | 31 | % |
| Naval & Power | 282,101 | | | — | | | 282,101 | | | 266,259 | | | — | | | 266,259 | | | 6 | % | | 6 | % |
| | | | | | | | | | | | | | | |
| Total sales | $ | 713,167 | | | $ | — | | | $ | 713,167 | | | $ | 630,860 | | | $ | — | | | $ | 630,860 | | | 13 | % | | 13 | % |
| | | | | | | | | | | | | | | |
| Operating income (expense): | | | | | | | | | | | | | | |
| Aerospace & Industrial | $ | 27,466 | | | $ | — | | | $ | 27,466 | | | $ | 26,545 | | | $ | — | | | $ | 26,545 | | | 3 | % | | 3 | % |
| Defense Electronics | 48,081 | | | — | | | 48,081 | | | 23,368 | | | — | | | 23,368 | | | 106 | % | | 106 | % |
Naval & Power (1) | 35,191 | | | — | | | 35,191 | | | 37,937 | | | 2,676 | | | 40,613 | | | (7) | % | | (13) | % |
| | | | | | | | | | | | | | | | |
| Total segments | $ | 110,738 | | | $ | — | | | $ | 110,738 | | | $ | 87,850 | | | $ | 2,676 | | | $ | 90,526 | | | 26 | % | | 22 | % |
| Corporate and other | (10,777) | | | — | | | (10,777) | | | (9,235) | | | — | | | (9,235) | | | (17) | % | | (17) | % |
| | | | | | | | | | | | | | | |
| Total operating income | $ | 99,961 | | | $ | — | | | $ | 99,961 | | | $ | 78,615 | | | $ | 2,676 | | | $ | 81,291 | | | 27 | % | | 23 | % |
| | | | | | | | | | | | | | | |
| Operating margins: | As Reported | | | | Adjusted | | As Reported | | | | Adjusted | | Reported | | Adjusted |
| Aerospace & Industrial | 12.5 | % | | | | 12.5 | % | | 13.1 | % | | | | 13.1 | % | | (60 bps) | | (60 bps) |
| Defense Electronics | 22.7 | % | | | | 22.7 | % | | 14.4 | % | | | | 14.4 | % | | 830 bps | | 830 bps |
| Naval & Power | 12.5 | % | | | | 12.5 | % | | 14.3 | % | | | | 15.3 | % | | (180 bps) | | (280 bps) |
| Total Curtiss-Wright | 14.0 | % | | | | 14.0 | % | | 12.5 | % | | | | 12.9 | % | | 150 bps | | 110 bps |
| | | | | | | | | | | | | | | |
| Segment margins | 15.5 | % | | | | 15.5 | % | | 13.9 | % | | | | 14.3 | % | | 160 bps | | 120 bps |
| | | | | | | | | | | | | | | |
(1) Excludes first year purchase accounting adjustments. |
|
| | | | | | | | | | | | | | | |
Curtiss-Wright Corporation, Page 12
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| CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
| RECONCILIATION OF AS REPORTED SALES TO ADJUSTED SALES BY END MARKET (UNAUDITED) |
| ($'s in thousands) |
| | | | | | | | | | | | | | | |
| | Three Months Ended | | Three Months Ended | | | |
| | March 31, 2024 | | March 31, 2023 | | 2024 vs. 2023 |
| | Reported Sales | | Adjustments | | Adjusted Sales | | Reported Sales | | Adjustments | | Adjusted Sales | | Change in Reported Sales | Change in Adjusted Sales |
| Aerospace & Defense markets: | | | | | | | | | | | | | | | |
| Aerospace Defense | | $ | 132,074 | | | $ | — | | | $ | 132,074 | | | $ | 99,879 | | | $ | — | | | $ | 99,879 | | | 32% | 32% |
| Ground Defense | | 90,760 | | | — | | | 90,760 | | | 66,256 | | | — | | | 66,256 | | | 37% | 37% |
| Naval Defense | | 177,647 | | | — | | | 177,647 | | | 171,956 | | | — | | | 171,956 | | | 3% | 3% |
| Commercial Aerospace | | 89,775 | | | — | | | 89,775 | | | 70,490 | | | — | | | 70,490 | | | 27% | 27% |
| Total Aerospace & Defense | | $ | 490,256 | | | $ | — | | | $ | 490,256 | | | $ | 408,581 | | | $ | — | | | $ | 408,581 | | | 20% | 20% |
|
| Commercial markets: | | | | | | | | | | | | | | | |
| Power & Process | | 124,039 | | | — | | | 124,039 | | | 120,339 | | | — | | | 120,339 | | | 3% | 3% |
| General Industrial | | 98,872 | | | — | | | 98,872 | | | 101,940 | | | — | | | 101,940 | | | (3%) | (3%) |
| Total Commercial | | $ | 222,911 | | | $ | — | | | $ | 222,911 | | | $ | 222,279 | | | $ | — | | | $ | 222,279 | | | 0% | 0% |
| | | | | | | | | | | | | | | |
| Total Curtiss-Wright | | $ | 713,167 | | | $ | — | | | $ | 713,167 | | | $ | 630,860 | | | $ | — | | | $ | 630,860 | | | 13% | 13% |
| | | | | | | | | | | | | | | |
|
Curtiss-Wright Corporation, Page 13
| | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
| RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED) |
| | | |
| Three Months Ended |
| March 31, |
| 2024 | | 2023 |
| Diluted earnings per share - As Reported | $ | 1.99 | | | $ | 1.48 | |
| First year purchase accounting adjustments | — | | | 0.05 | |
Diluted earnings per share - Adjusted (1) | $ | 1.99 | | | $ | 1.53 | |
| | | |
(1) All adjustments are presented net of income taxes. |
Curtiss-Wright Corporation, Page 14
Organic Sales and Organic Operating Income
The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income, excluding contributions from acquisitions and results of operations from divested businesses or product lines during the last twelve months, and foreign currency fluctuations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended |
| March 31, |
| 2024 vs. 2023 |
| Aerospace & Industrial | | Defense Electronics | | Naval & Power | | Total Curtiss-Wright |
| Sales | | Operating income | | Sales | | Operating income | | Sales | | Operating income | | Sales | | Operating income |
| As Reported | 8% | | 3% | | 31% | | 106% | | 6% | | (7%) | | 13% | | 27% |
| Less: Acquisitions | 0% | | 0% | | 0% | | 0% | | 0% | | 0% | | 0% | | 0% |
| Foreign Currency | 0% | | 2% | | (1%) | | 0% | | 0% | | 0% | | 0% | | 1% |
| Organic | 8% | | 5% | | 30% | | 106% | | 6% | | (7%) | | 13% | | 28% |
Curtiss-Wright Corporation, Page 15
Free Cash Flow and Free Cash Flow Conversion
The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as net cash provided by operating activities less capital expenditures. Adjusted free cash flow excludes: (i) payments associated with the Westinghouse legal settlement in the prior year period. The Corporation discloses adjusted free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as adjusted free cash flow divided by adjusted net earnings.
| | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION and SUBSIDIARIES |
| NON-GAAP FINANCIAL DATA (UNAUDITED) |
| ($'s in thousands) |
| | | |
| | | |
| Three Months Ended |
| March 31, |
| 2024 | | 2023 |
| Net cash used for operating activities | $ | (45,633) | | | $ | (91,599) | |
| Capital expenditures | (12,055) | | | (10,661) | |
| Free cash flow | $ | (57,688) | | | $ | (102,260) | |
| Westinghouse legal settlement | — | | | 10,000 | |
| Adjusted free cash flow | $ | (57,688) | | | $ | (92,260) | |
| Adjusted free cash flow conversion | (75 | %) | | (157 | %) |
Curtiss-Wright Corporation, Page 16
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION |
2024 Guidance |
| As of May 1, 2024 |
| ($'s in millions, except per share data) |
| | | | | | | | | | | | | | | |
| 2023
Reported
(GAAP) | | 2023 Adjustments (Non-GAAP)(1,2) | | 2023 Adjusted (Non-GAAP)(1) | | 2024
Reported Guidance
(GAAP) | | 2024
Adjustments
(Non-GAAP) | | 2024
Adjusted Guidance
(Non-GAAP) |
| | | | | | | Low | High | | | | Low | High | | Chg
vs 2023
Adjusted |
| Sales: | | | | | | | | | | | | | | | |
| Aerospace & Industrial | $ | 887 | | | $ | — | | | $ | 887 | | | $ | 915 | | $ | 930 | | | $ | — | | | $ | 915 | | $ | 930 | | | 3 - 5% |
| Defense Electronics | 816 | | | — | | | 816 | | | 882 | | 897 | | | — | | | 882 | | 897 | | | 8 - 10% |
| Naval & Power | 1,142 | | | — | | | 1,142 | | | 1,188 | | 1,208 | | | — | | | 1,188 | | 1,208 | | | 4 - 6% |
| Total sales | $ | 2,845 | | | $ | — | | | $ | 2,845 | | | $ | 2,985 | | $ | 3,035 | | | $ | — | | | $ | 2,985 | | $ | 3,035 | | | 5 to 7% |
| | | | | | | | | | | | | | | |
| Operating income: | | | | | | | | | | | | | | | |
| Aerospace & Industrial | $ | 145 | | | $ | — | | | $ | 145 | | | $ | 152 | | $ | 156 | | | $ | — | | | $ | 152 | | $ | 156 | | | 5 - 8% |
| Defense Electronics | 192 | | | — | | | 192 | | | 212 | | 218 | | | — | | | 212 | | 218 | | | 11 - 13% |
| Naval & Power | 189 | | | 9 | | | 198 | | | 192 | | 197 | | | — | | | 192 | | 197 | | | (3) - (1)% |
| Total segments | 526 | | | 9 | | | 535 | | | 556 | | 571 | | | — | | | 556 | | 571 | | | |
| Corporate and other | (42) | | | — | | | (42) | | | (38) | | (39) | | | — | | | (38) | | (39) | | | |
| Total operating income | $ | 485 | | | $ | 9 | | | $ | 494 | | | $ | 518 | | $ | 533 | | | $ | — | | | $ | 518 | | $ | 533 | | | 5 to 8% |
| | | | | | | | | | | | | | | |
| Interest expense | $ | (51) | | | $ | — | | | $ | (51) | | | $ | (44) | | $ | (45) | | | $ | — | | | $ | (44) | | $ | (45) | | | |
| Other income, net | 30 | | | — | | | 30 | | | 34 | | 35 | | | — | | | 34 | | 35 | | | |
| Earnings before income taxes | 463 | | | 9 | | | 472 | | | 508 | | 524 | | | — | | | 508 | | 524 | | | |
| Provision for income taxes | (109) | | | (2) | | | (111) | | | (119) | | (123) | | | — | | | (119) | | (123) | | | |
| Net earnings | $ | 355 | | | $ | 6 | | | $ | 361 | | | $ | 389 | | $ | 400 | | | $ | — | | | $ | 389 | | $ | 400 | | | |
| | | | | | | | | | | | | | | |
| Diluted earnings per share | $ | 9.20 | | | $ | 0.18 | | | $ | 9.38 | | | $ | 10.10 | | $ | 10.40 | | | $ | — | | | $ | 10.10 | | $ | 10.40 | | | 8 to 11% |
| Diluted shares outstanding | 38.5 | | | | | 38.5 | | | 38.5 | | 38.5 | | | | | 38.5 | | 38.5 | | | |
| Effective tax rate | 23.4 | % | | | | 23.4 | % | | 23.5 | % | 23.5 | % | | | | 23.5 | % | 23.5 | % | | |
| | | | | | | | | | | | | | | |
| Operating margins: | | | | | | | | | | | | | | | |
| Aerospace & Industrial | 16.4 | % | | | | 16.4 | % | | 16.6 | % | 16.8 | % | | | | 16.6 | % | 16.8 | % | | 20 to 40 bps |
| Defense Electronics | 23.5 | % | | | | 23.5 | % | | 24.0 | % | 24.2 | % | | | | 24.0 | % | 24.2 | % | | 50 to 70 bps |
| Naval & Power | 16.6 | % | | | | 17.4 | % | | 16.1 | % | 16.3 | % | | | | 16.1 | % | 16.3 | % | | (110 to 130 bps) |
| Total operating margin | 17.0 | % | | | | 17.4 | % | | 17.4 | % | 17.6 | % | | | | 17.4 | % | 17.6 | % | | 0 to 20 bps |
| | | | | | | | | | | | | | | |
| Free cash flow | $ | 403 | | | $ | 10 | | | $ | 413 | | | $ | 415 | | $ | 435 | | | $ | — | | | $ | 415 | | $ | 435 | | | 0 to 5% |
| | | | | | | | | | | | | | | |
| Notes: Full year amounts may not add due to rounding. |
(1) 2023 Adjusted financials exclude the impact of first year purchase accounting adjustments. |
(2) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2023 Adjusted Free Cash Flow excluded a legal settlement payment of $10 million. |
|
| | | | | | | | | | | | | | | |
Curtiss-Wright Corporation, Page 17
| | | | | | | | | | | | | | | | | | | | |
| CURTISS-WRIGHT CORPORATION | |
2024 Sales Growth Guidance by End Market | |
| As of May 1, 2024 | |
| | | | | | |
| | | | | | |
| | | | | | |
| 2024 % Change vs. 2023 Adjusted | | | |
| | | | | | |
| Prior | | Current | | % Total Sales | |
| Aerospace & Defense Markets | | | | | | |
| Aerospace Defense | 5 - 7% | | 6 - 8% | | 20% | |
| Ground Defense | 4 - 6% | | 10 - 12% | | 11% | |
| Naval Defense | 3 - 5% | | 3 - 5% | | 25% | |
| Commercial Aerospace | 10 - 12% | | 10 - 12% | | 12% | |
| Total Aerospace & Defense | 5 - 7% | | 6 - 8% | | 68% | |
| | | | | | |
| Commercial Markets | | | | | | |
| Power & Process | 3 - 5% | | 4 - 6% | | 18% | |
| General Industrial | 1 - 3% | | 1 - 3% | | 15% | |
| Total Commercial | 2 - 4% | | 2 - 4% | | 32% | |
| | | | | | |
| Total Curtiss-Wright Sales | 4 - 6% | | 5 - 7% | | 100% | |
| | | | | | |
| Note: Sales percentages may not add due to rounding. | | | | | |
| |
Curtiss-Wright Corporation, Page 18
About Curtiss-Wright Corporation
Curtiss-Wright Corporation (NYSE:CW) is a global integrated business that provides highly engineered products, solutions and services mainly to Aerospace & Defense markets, as well as critical technologies in demanding Commercial Power, Process and Industrial markets. We leverage a workforce of approximately 8,600 highly skilled employees who develop, design and build what we believe are the best engineered solutions to the markets we serve. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing innovative solutions through trusted customer relationships. For more information, visit www.curtisswright.com.
###
Certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the Company’s acquisitions, and future cash flow from operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements present management's expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments, and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and subsequent reports filed with the Securities and Exchange Commission.
This press release and additional information are available at www.curtisswright.com.
Contact: Jim Ryan
(704) 869-4621
Jim.Ryan@curtisswright.com
ex992_cwxq124
Q1 2024 Earnings Presentation May 2, 2024 Q1 2024 EARNINGS CONFERENCE CALL Conference Call Dial-in numbers: (800) 225-9448 (domestic) (203) 518-9708 (international) Conference code: CWQ124
Q1 2024 Earnings Presentation SAFE HARBOR STATEMENT Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will remain posted on this website from one to twelve months following the initial presentation, but content will not be updated to reflect new information that may become available after the original presentation posting. The presentation contains 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. Such forward-looking statements only speak as of the date of this report and Curtiss-Wright Corporation assumes no obligation to update the information included in this report. Such forward-looking statements include, among other things, management's estimates of future performance, revenue and earnings, our management's growth objectives, our management’s ability to integrate our acquisition, and our management's ability to produce consistent operating improvements. These forward-looking statements are based on expectations as of the time the statements were made only, and are subject to a number of risks and uncertainties which could cause us to fail to achieve our then-current financial projections and other expectations, including the impact of a global pandemic or national epidemic. This presentation also includes certain non-GAAP financial measures with reconciliations to GAAP financial measures being made available in the earnings release and this presentation that are posted to our website and furnished with the SEC. We undertake no duty to update this information. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission, including our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, including, among other sections, under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is on file with the SEC and available at the SEC's website at www.sec.gov. 2
Q1 2024 Earnings Presentation ▪ Sales of $713M, up 13% overall – Aerospace & Defense (A&D) markets up 20%; Strong growth in defense electronics (embedded computing and tactical communications), arresting systems and Commercial Aerospace – Commercial markets reflect solid growth in Commercial Nuclear and Process, mainly offset by Industrial markets ▪ Operating Income of $100M, up 23%; 110 bps in YOY margin expansion – Exceeded expectations due to strong operational performance in Defense Electronics despite headwind in Naval & Power segment ▪ Diluted EPS of $1.99, up 30% ▪ Free Cash Flow up 37%; Higher confidence to achieve full-year guidance ▪ New Orders of $901M, up 26%, reflecting 1.26x Book-to-Bill – Strong demand across A&D and Commercial Nuclear markets STRONG START TO 2024; RAISED FULL-YEAR 2024 OUTLOOK ▪ Sales growth raised to 5% - 7% on continued strength in Defense Electronics; Increases in all end markets ▪ Expect to deliver incremental margin expansion, 8% - 11% EPS growth and strong FCF generation 3 First Quarter 2024 Highlights Note: First quarter 2024 results and Full-year 2024 guidance, and comparisons to 2023, presented on an Adjusted (Non-GAAP) basis, unless noted Full-Year 2024 Guidance
Q1 2024 Earnings Presentation FIRST QUARTER 2024 FINANCIAL REVIEW ($ in millions) Q1’24 Adjusted Q1’23 Adjusted Change Key Drivers Aerospace & Industrial $219 $202 8% ▪ Strong Commercial Aerospace OEM growth and increased development of actuation equipment in Aerospace Defense; Partially offset by modest decline in General Industrial Defense Electronics $212 $162 31% ▪ Strong growth in Ground Defense (tactical communications) and Aerospace Defense (embedded computing) Naval & Power $282 $266 6% ▪ Aerospace Defense revenue growth reflected strong demand for arresting systems equipment ▪ Modest Naval Defense growth (higher Columbia-class subs, mainly offset by lower aircraft carrier revenues) ▪ Solid growth in Power & Process Total Sales $713 $631 13% Strong demand and record backlog fuels growth in A&D markets Aerospace & Industrial Margin $27 12.5% $27 13.1% 3% (60) bps ▪ Favorable absorption on solid sales growth ▪ Profitability offset by unfavorable mix and timing of development programs Defense Electronics Margin $48 22.7% $23 14.4% 106% 830 bps ▪ Favorable absorption and improved mix on strong A&D revenue growth ▪ Profitability partially offset by higher investment in R&D Naval & Power Margin $35 12.5% $41 15.3% (13%) (280) bps ▪ Favorable absorption on higher revenues ▪ Profitability impacted by naval contract adjustment Corporate and Other ($11) ($9) 17% ▪Higher 401K expenses Total Op. Income CW Margin $100 14.0% $81 12.9% 23% 110 bps CW portfolio delivers strong margin expansion on better-than-expected Sales growth 4Notes: Amounts may not add due to rounding.
Q1 2024 Earnings Presentation 2024 END MARKET SALES GROWTH GUIDANCE (As of May 1, 2024) ($ in Millions) 2024E Growth vs 2023 (Prior) 2024E Growth vs 2023 (Current) 2024E % Sales Key Drivers Aerospace Defense 5% - 7% 6% - 8% 20% ▪ Strong defense electronics revenue growth on various C5/ISR programs (fighter jets and helicopters) Ground Defense 4% - 6% 10% - 12% 11% ▪ Strong revenue growth in tactical communications equipment Naval Defense 3% - 5% 3% - 5% 25% ▪ Higher revenue growth on Columbia-class submarine and CVN-81 aircraft carrier programs; Partially offset by lower CVN-80 aircraft carrier revenues Commercial Aerospace 10% - 12% 10% - 12% 12% ▪ Ramp-up in OEM production (narrowbody and widebody) Total Aerospace & Defense 5% - 7% 6% - 8% 68% Strong growth in A&D markets driven by U.S. and Foreign Military Sales Power & Process 3% - 5% 4% - 6% 18% ▪ Raised Commercial Nuclear outlook from MSD to HSD growth, incl. benefit of WSC acquisition ▪ Modest growth in Process (Higher subsea pump development revenues offset by timing of capital projects in oil & gas market) General Industrial 1% - 3% 1% - 3% 15% ▪ Growth in industrial vehicles (new product introductions) and surface treatment services Total Commercial 2% - 4% 2% - 4% 32% Investment in new technologies driving solid base of growth Total Curtiss-Wright 4% - 6% 5% - 7% 100% Delivering Organic Growth in All A&D and Commercial Markets 5Notes: Amounts may not add due to rounding. Updated (in blue)
Q1 2024 Earnings Presentation ($ in millions) 2024E (Prior) 2024E (Current) Change vs 2023 Adjusted Key Drivers Aerospace & Industrial $915 - 930 $915 - 930 3% - 5% ▪ Strong LDD growth in Commercial Aerospace and LSD growth in Industrial markets Defense Electronics $857 - 872 $882 - 897 8% - 10% ▪Defense market growth (U.S. DoD and FMS) driven by strong order book and record backlog ▪Higher Aerospace Defense (embedded computing) and Ground Defense (tactical communications) Naval & Power $1,188 - 1,208 $1,188 - 1,208 4% - 6% ▪MSD growth in Naval Defense driven by Columbia-class sub and CVN-81 aircraft carrier programs ▪MSD growth in Power & Process, including contribution from WSC acquisition Total Sales $2,960 - 3,010 $2,985 - 3,035 5% - 7% Delivering MSD+ organic growth Aerospace & Industrial Margin $152 - 156 16.6% - 16.8% $152 - 156 16.6% - 16.8% 5% - 8% 20 - 40 bps ▪ Favorable absorption on strong Commercial Aerospace sales growth ▪Continued investment in IR&D Defense Electronics Margin $198 - 203 23.1% - 23.3% $212 - 218 24.0% - 24.2% 11% - 13% 50 - 70 bps ▪ Favorable absorption on strong growth in A&D revenues ▪ Strong profitability partially offset by ramp up in IR&D investments (~50 bps impact) Naval & Power Margin $202 - 207 17.0% - 17.2% $192 - 197 16.1% - 16.3% (1% - 3%) (110 - 130 bps) ▪ Favorable absorption on higher sales (Defense, Commercial Nuclear and Process) ▪ Profitability offset by impact of naval contract adjustment, shift to development programs (advanced SMRs, subsea pumps) and higher investments in IR&D; Combined R&D impact ~50 bps Corporate and Other ($38 - 39) ($38 - 39) 8% - 9% ▪ Lower FX costs Total Op. Income CW Margin $514 - 528 17.4% - 17.6% $518 - 533 17.4% - 17.6% 5% - 8% 0 - 20 bps Targeting Operating Margin expansion while growing engineering spend (~40-50 bps impact) 2024 FINANCIAL GUIDANCE (As of May 1, 2024) 6Note: IR&D represents Internally-funded Research and Development projects Updated (in blue)
Q1 2024 Earnings Presentation 2024 FINANCIAL GUIDANCE (As of May 1, 2024) ($ in millions, except EPS) 2024E (Prior) 2024E (Current) Change vs 2023 Adjusted Key Drivers Total Sales $2,960 - 3,010 $2,985 - 3,035 5% - 7% Continued focus on generating profitable growth Total Operating Income $514 - 528 $518 - 533 5% - 8% Other Income $33 - 35 $34 - 35 ▪ Higher YOY pension and interest income Interest Expense ($45 - 46) ($44 - 45) ▪ Lower YOY debt levels Diluted EPS $10.00 - 10.30 $10.10 - 10.40 8% - 11% Line of sight to achieve double-digit growth Diluted Shares Outstanding ~38.5 ~38.5 Min. $50M share repurchase Free Cash Flow $415 - 435 $415 - 435 0% - 5% FCF up 5% - 10%, excluding final CAP1000 cash payment in 2023 FCF Conversion ~110% ~110% ▪ Continued solid FCF conversion Capital Expenditures $50 - 60 $50 - 60 ▪ Average ~2% of Sales (over time) Depreciation & Amortization $110 - 115 $110 - 115 7 Updated (in blue)
Q1 2024 Earnings Presentation ACQUISITION OF WSC EXPANDS GLOBAL COMMERCIAL NUCLEAR PORTFOLIO 8 ▪ April 2024: Completed Acquisition of WSC, Inc. – A leading supplier of state-of-the-art power plant control room simulation technology – Strong global installed base of over 225 plant simulators – Supporting the design, commissioning, and reliable operation of Commercial Nuclear and other power generation plants ▪ Aligned with Curtiss-Wright’s Acquisition Priorities – Bolt-on nuclear business increases breadth of CW’s portfolio – Ability to leverage CW’s long standing customer relationships and global sales team – Combines WSC's solutions with Curtiss-Wright's digital safety systems and advanced condition monitoring technology supporting reactor modernization – Broad range of competencies from existing commercial nuclear plants to new build small modular reactors, including a contract from TerraPower – Supports Curtiss-Wright’s long-term financial objectives (1) Excludes impact of first-year purchase accounting adjustments, including transaction costs Purchase Price $34M (cash) P / EBITDA Multiple ~9.5x NTM 2023 Sales ~$15M Adjusted Operating Margin (1) Dilutive to CW in Year One Adjusted EPS (1) Accretive in Year One Free Cash Flow Expected to generate >100% FCF Conv.
Q1 2024 Earnings Presentation CURTISS-WRIGHT IS BUILDING MOMENTUM 9 ▪ Successful execution of Pivot to Growth strategy driving strong FY24 outlook – Sales growth of 5% - 7% driven by increases in all A&D and Commercial markets – Operating Margin of 17.4% - 17.6%, flat to up 20 bps, while supporting incremental R&D investments – Targeting 8% - 11% EPS growth on strong operating income growth – Confidence in FCF guidance reflect strong earnings and continued working capital management; FCF Conversion >100% ▪ Maintain healthy and efficient balance sheet to support disciplined capital allocation strategy – Committed to growing through acquisitions and returning capital to shareholders ▪ Hosting Investor Day on Tuesday May 21, 2024, in NYC (8:30am EDT)1 – In-depth review of Curtiss-Wright’s strategy for continued profitable growth and introduce new long-term financial targets – Commercial Nuclear panel with leading industry experts from Nuclear Energy Institute, Westinghouse and Energy Northwest – Confidence in long-term outlook driven by alignment of technologies to secular growth trends (1) Investor Day registration can be accessed here: Investor Day 2024 Registration Site
Q1 2024 Earnings Presentation Appendix 10
Q1 2024 Earnings Presentation NON-GAAP FINANCIAL INFORMATION The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within the Company’s earnings press release. The following definitions are provided: Adjusted Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share (EPS) These Adjusted financials are defined as Reported Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions in the prior year, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) the sale or divestiture of a business or product line; (iii) pension settlement charges; and (iv) significant legal settlements, impairment costs, and costs associated with shareholder activism, as applicable. Organic Sales and Organic Operating Income The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income, excluding contributions from acquisitions made during the last twelve months, loss on divestiture of the German valves business, and foreign currency fluctuations. Free Cash Flow (FCF) and Free Cash Flow Conversion The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as net cash provided by operating activities less capital expenditures. Adjusted free cash flow excludes: (i) payments associated with the Westinghouse legal settlement in both the current and prior year periods and (ii) executive pension payments in the prior year period. The Corporation discloses adjusted free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as adjusted free cash flow divided by adjusted net earnings. 11
Q1 2024 Earnings Presentation FIRST QUARTER 2024: END MARKET SALES GROWTH ($ in millions) Q1’24 Q1’23 Change Key Drivers Aerospace Defense $132 $100 32% Strong demand for embedded computing equipment and higher revenues of arresting systems equipment Ground Defense $91 $66 37% Higher tactical communications equipment revenues Naval Defense $178 $172 3% Higher Columbia-class submarine revenues, partially offset by timing of revenues on aircraft carrier programs Commercial Aerospace $90 $70 27% Strong OEM demand on narrowbody and widebody platforms Total A&D Markets $490 $409 20% Power & Process $124 $120 3% Solid growth in Power & Process (MSD growth excluding CAP1000 program revenues); Driven by higher commercial nuclear aftermarket revenues General Industrial $99 $102 (3%) Benefit of new product introductions addressing the electrification of vehicles was more than offset by reduced sales of industrial automation products and surface treatment services Total Commercial Markets $223 $222 0% Total Curtiss-Wright $713 $631 13% 12Note: Amounts may not add down due to rounding.
Q1 2024 Earnings Presentation 68% $2.04B 32% $0.97B Industrial Vehicles Tactical battlefield communications Principally Repair and Overhaul Aerospace & Defense Markets Commercial Markets 25% 12% 20% 11% ~90% ~10% Embedded computing, sensors, actuation, arresting systems 60% Narrowbody / 40% Widebody Linked to Boeing/Airbus production Aerospace OEM Total 2024 CW End Markets $2.985B - 3.035B General IndustrialNaval Commercial Aerospace Power & Process Pumps / Valves / Steam Turbines (Nuclear naval propulsion) Ground AM ~35% 18% 15% ~55% Severe-service valves and subsea pump applications ~65% Electromechanical actuation and Surface Treatment Services Aftermarket (Operating Reactors) & New Build (AP1000, SMRs) On/Off-Highway Commercial and Specialty Vehicles Commercial Nuclear Process Industrial Automation and Services ~45% 2024E END MARKET SALES WATERFALL (as of May 1, 2024) FY’24 Guidance: Overall UP 5 - 7% A&D Markets UP 6 - 8% Comm’l Markets UP 2 - 4% Note: Amounts shown for % of Total Sales may not add due to rounding. ▪ Power & Process market sales concentrated in Naval & Power segment ▪ General Industrial sales concentrated in Aerospace & Industrial segment 13 Commercial Nuclear 90% Domestic & Int’l Aftermarket 10% New Build Gen III / Gen IV (Advanced SMRs)