Curtiss-Wright — Aug 7, 2024 release
Fiscal 2024 second-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0000026324-24-000035
Showing in the filing
Free cash flow
“$425 to $445 million”
Period
FY2024
Measure
Company-defined measure
Source
Prose
All guidance in this release · 55
Sales growth for FY2024
“6% to 8% growth”
Operating margin range for FY2024
“17.4% to 17.6%”
Diluted EPS for FY2024
“$10.40 to $10.65”
Effective tax rate for FY2024
“22.5%”
Free cash flow for FY2024
“$425 to $445 million”
FCF conversion for FY2024
“greater than 105%”
Free Cash Flow Conversion for FY2024
“greater than 105%”
Restructuring Program Costs for FY2024
“approximately $15 million”
Annualized savings for FY2025
“approximately $10 million”
Restructuring Program Annualized Savings for FY2025
“approximately $10 million”
Annualized savings (U.K. legal entity consol…
“approximately $5 million”
U.K. Legal Entity Consolidation Annualized S…
“approximately $5 million”
Annual recurring free cash flow (U.K. legal … for FY2024
“approximately $5 million”
U.K. Legal Entity Consolidation Annual Recur… for FY2024
“approximately $5 million”
Ultra Energy Adjusted Diluted EPS Impact for FY2024
“accretive”
Free cash flow conversion rate (Ultra Energy) for FY2024
“in excess of 100%”
Quarterly dividend
“$0.21 a share”
Total Sales for FY2024
“$3,010 - $3,060”
Total Sales % Chg vs 2023 Adjusted for FY2024
“Up 6% - 8%”
Total operating income for FY2024
“$525 - $539”
Operating Income % Chg vs 2023 Adjusted for FY2024
“Up 6% - 9%”
Operating Margin % Chg vs 2023 Adjusted for FY2024
“Up 0 - 20 bps”
Diluted earnings per share for FY2024
“$10.40 - $10.65”
Diluted EPS % Chg vs 2023 Adjusted for FY2024
“Up 11% - 14%”
Free Cash Flow % Chg vs 2023 Adjusted for FY2024
“Up 3% - 8%”
Operating income - Aerospace & Industrial % … for FY2024
“8 - 11%”
Ground Defense % Total Sales for FY2024
“11%”
Operating income - Defense Electronics % Chg for FY2024
“11 - 13%”
Operating income - Naval & Power % Chg for FY2024
“(2) - 0%”
Total operating income % Chg for FY2024
“6 - 9%”
Diluted earnings per share % Chg for FY2024
“11 - 14%”
Diluted shares outstanding for FY2024
“38.5”
Operating margin - Aerospace & Industrial % … for FY2024
“50 to 70 bps”
Operating margin - Defense Electronics % Chg for FY2024
“50 to 70 bps”
Operating margin - Naval & Power % Chg for FY2024
“(110 to 130 bps)”
Total operating margin % Chg for FY2024
“0 to 20 bps”
Aerospace Defense sales growth for FY2024
“7 - 9%”
Aerospace Defense % Total Sales for FY2024
“20%”
Ground Defense sales growth for FY2024
“10 - 12%”
Naval Defense % Total Sales for FY2024
“25%”
Commercial Aerospace sales growth for FY2024
“13 - 15%”
Commercial Aerospace % Total Sales for FY2024
“12%”
Sales - Defense Electronics % Chg for FY2024
“8 -10%”
Total Aerospace & Defense sales growth for FY2024
“8 - 10%”
Total Aerospace & Defense % Total Sales for FY2024
“68%”
Power & Process sales growth for FY2024
“4 - 6%”
Sales - Aerospace & Industrial % Chg for FY2024
“4 - 6%”
Power & Process % Total Sales for FY2024
“18%”
General Industrial % Total Sales for FY2024
“14%”
Total Commercial sales growth for FY2024
“1 - 3%”
Total Commercial % Total Sales for FY2024
“32%”
Naval Defense sales growth for FY2024
“5 - 7%”
Sales - Naval & Power % Chg for FY2024
“5 -7%”
Total Curtiss-Wright Sales growth for FY2024
“6 - 8%”
Total Curtiss-Wright Sales % Total Sales for FY2024
“100%”
Exhibit 99.1 · full document
Curtiss-Wright Corporation, Page 1 Exhibit 99.1 NEWS RELEASE CURTISS-WRIGHT REPORTS SECOND QUARTER 2024 FINANCIAL RESULTS AND RAISES FULL-YEAR 2024 GUIDANCE DAVIDSON, N.C. – August 7, 2024 – Curtiss-Wright Corporation (NYSE: CW) reports financial results for the second quarter ended June 30, 2024. Second Quarter 2024 Highlights: • Reported sales of $785 million, up 11% ; • Reported operating income of $129 million, operating margin of 16.4%, and diluted earnings per share (EPS) of $2.58; • Adjusted operating income of $133 million, up 16%; • Adjusted operating margin of 17.0%, up 60 basis points; • Adjusted diluted EPS of $2.67, up 24%; • New orders of $995 million, up 18%, reflected a book-to-bill of approximately 1.3x driven by strong demand within our Aerospace & Defense (A&D) markets; • Backlog of $3.2 billion, up 13% year-to-date; and • Free cash flow (FCF) of $100 million, generating 97% Adjusted FCF conversion. Raised Full-Year 2024 Adjusted Financial Guidance: • Sales increased to new range of 6% to 8% growth (previously 5% to 7%), driven by strong growth in our A&D markets; • Operating income increased to new range of 6% to 9% growth (previously 5% to 8%); • Maintained operating margin range of 17.4% to 17.6%, flat to up 20 basis points compared with the prior year; • Diluted EPS increased to new range of $10.40 to $10.65, up 11% to 14% (previously $10.10 to $10.40, up 8% to 11%); • Reduced effective tax rate by 100 bps to 22.5% following consolidation of U.K. legal entity structure, and • Free cash flow increased to new range of $425 to $445 million, up 3% to 8% (previously $415 to $435 million, up 0% to 5%), and continues to reflect greater than 105% FCF conversion. "Curtiss-Wright delivered strong second quarter results, highlighted by mid-teens revenue growth in our A&D end markets, continued operating margin expansion, and 24% growth in Adjusted diluted EPS," said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. "We once again demonstrated robust order activity, as bookings increased 18% year over year, yielding a book-to-bill of 1.3x. Based on the strong first half results and our outlook for the remainder of 2024, we have increased our full-year Adjusted guidance for sales, operating income, diluted EPS and free cash flow." "A s we discussed at our Investor Day event in May, we continue to build momentum through the execution of our Pivot to Growth strategy. We remain focused on accelerating operational excellence to drive margin expansion and generate funding to reinvest into the business. As part of this strategy, we recently launched restructuring actions to support volume increases, improve efficiencies and further optimize our operations. These actions are expected to produce both recurring operational savings and increased free cash flow." Curtiss-Wright Corporation, Page 2 2024 Restructuring Program and Other Cost Savings Initiatives • During the second quarter of 2024, the Company initiated restructuring actions across all three segments, principally within the Aerospace & Industrial segment. These initiatives are expected to result in approximately $15 million in restructuring costs in 2024, and are expected to yield initial savings in 2024, as well as approximately $10 million in annualized savings in 2025; and • Curtiss-Wright launched a U.K. legal entity consolidation program anticipated to facilitate more efficient cash repatriation. This initiative is expected to generate approximately $5 million in annualized savings, based on a 100 basis point reduction in the effective tax rate, and approximately $5 million in annual recurring free cash flow. Acquisition of Ultra Energy • On June 3, 2024, the Company announced the acquisition of Ultra Nuclear Limited and Weed Instrument Co., Inc. (“Ultra Energy”) for $200 million in cash. • Ultra Energy is a leading global provider of safety-critical monitoring systems, temperature and pressure sensors, and reactor protection and control systems principally to the commercial nuclear and A&D markets; • The business is expected to be accretive to Curtiss-Wright's adjusted diluted earnings per share in its first full year of ownership, excluding first year purchase accounting costs, and produce a free cash flow conversion rate in excess of 100%; and • The acquisition is expected to close in the third quarter of 2024, subject to U.K. regulatory approval, and the acquired business will operate within Curtiss-Wright's Naval & Power segment. Second Quarter 2024 Operating Results (In millions) Q2-2024 Q2-2023 Change Reported Sales $ 785 $ 704 11 % Operating income $ 129 $ 113 14 % Operating margin 16.4 % 16.0 % 40 bps Adjusted (1) Sales $ 785 $ 704 11 % Operating income $ 133 $ 115 16 % Operating margin 17.0 % 16.4 % 60 bps (1) Reconciliations of Reported to Adjusted operating results are available in the Appendix. • Sales of $785 million increased 11% compared with the prior year period; • Total A&D market sales increased 16%, while total Commercial market sales increased 2%; • In our A&D markets, we experienced strong growth in the defense markets principally driven by strong demand for our defense electronics products and the timing of production ramps in naval defense, as well as higher OEM sales in the commercial aerospace market; • In our Commercial markets, we experienced solid growth in the power & process markets , principally driven by higher sales of our commercial nuclear products, while sales in the general industrial market declined modestly ; and • Adjusted operating income of $133 million increased 16%, while Adjusted operating margin increased 60 basis points to 17.0%, principally driven by favorable overhead absorption on higher revenues in all three segments and favorable mix in the Defense Curtiss-Wright Corporation, Page 3 Electronics segment, partially offset by unfavorable mix and timing of development programs in the Naval & Power segment. Curtiss-Wright Corporation, Page 4 Second Quarter 2024 Segment Performance Aerospace & Industrial (In millions) Q2-2024 Q2-2023 Change Reported Sales $ 233 $ 226 3 % Operating income $ 35 $ 36 (1 %) Operating margin 15.1 % 15.8 % (70 bps) Adjusted (1) Sales $ 233 $ 226 3 % Operating income $ 38 $ 36 6 % Operating margin 16.2 % 15.8 % 40 bps (1) Reconciliations of Reported to Adjusted operating results are available in the Appendix. • Sales of $233 million, up $7 million, or 3% ; • Commercial aerospace market revenue increases reflected strong demand and higher OEM sales of sensors and actuation pro ducts, as well as surface treatment services, on narrowbody and widebody platforms; • General industrial market revenues declined modestly, as the benefit of higher sales of surface treatment services was more than offset by reduced sales of industrial vehicle products to off-highway vehicle platforms; and • Adjusted operating income was $38 million, up 6% from the prior year, while adjusted operating margin increased 40 basis points to 16.2%, mainly due to solid absorption on higher sales and the initial benefits of our restructuring initiatives. Curtiss-Wright Corporation, Page 5 Defense Electronics (In millions) Q2-2024 Q2-2023 Change Reported Sales $ 228 $ 198 16 % Operating income $ 58 $ 43 35 % Operating margin 25.5 % 21.8 % 370 bps Adjusted (1) Sales $ 228 $ 198 16 % Operating income $ 59 $ 43 36 % Operating margin 25.7 % 21.8 % 390 bps (1) Reconciliations of Reported to Adjusted operating results are available in the Appendix. • Sales of $228 million, up $31 million, or 16%; • Higher revenue in the aerospace defense market was principally driven by increased sales of our embedded computing equipment on various domestic and international helicopter programs; • Strong revenue growth in the ground defense market primarily reflected higher sales of tactical battlefield communications equipment; and • Adjusted operating income was $59 million, up 36% from the prior year, while adjusted oper ating margin increased 390 basis points to 25.7%, reflecting favorable absorption and mix on higher revenues, and the benefits of our cost containment initiatives. Curtiss-Wright Corporation, Page 6 Naval & Power (In millions) Q2-2024 Q2-2023 Change Reported Sales $ 323 $ 280 15 % Operating income $ 46 $ 47 (1 %) Operating margin 14.3 % 16.7 % (240 bps) Adjusted (1) Sales $ 323 $ 280 15 % Operating income $ 47 $ 49 (6 %) Operating margin 14.4 % 17.6 % (320 bps) (1) Reconciliations of Reported to Adjusted operating results are available in the Appendix. • Sales of $323 million, up $43 million , or 15%; • Strong revenue growth in the naval defense market principally reflected higher demand on various submarine programs and the CVN-81 aircraft carrier program; • Higher revenue in the aerospace defense market was primarily driven by increased sales of our arresting systems equipment supporting various domestic and international customers; • Higher power & process market revenues mainly reflected increased commercial nuclear aftermarket sales supporting the maintenance of U.S. operating reactors; and • Ad justed operating income was $47 million, down 6% from the prior year, while adjusted operating margin decreased 320 basis points to 14.4% , as favorable absorption on higher revenues was more than offset by unfavorable mix of products and timing of development programs. Curtiss-Wright Corporation, Page 7 Free Cash Flow (In millions) Q2-2024 Q2-2023 Change Net cash provided by operating activities $ 111 $ 111 — % Capital expenditures (11) (12) (8 %) Reported free cash flow $ 100 $ 99 1 % Adjusted free cash flow (1) $ 100 $ 99 1 % (1) A reconciliation of Reported to Adjusted free cash flow is available in the Appendix. • Reported free cash flow of $100 million increased slightly as higher cash earnings were essentially offset by the timing of tax payments and working capital; • Adjusted free cash flow of $100 million; and • Capital expenditures decreased $1 million compared with the prior year. New Orders and Backlog • New orders of $995 million increased 18% compared with the prior year and generated an overall book-to-bill of approximately 1.3x, p rincipally driven by strong demand for naval defense and commercial aerospace products within our A&D markets; and • Backlog of $3.2 billion, up 13% from December 31, 2023, reflects strong demand in both our A&D and Commercial markets. Share Repurchase and Dividends • During the second quarter, the Company repurchased 47,174 shares of its common stock for approximately $13 million; and • The Company also declared a quarterly dividend of $0.21 a share, an increase of 5% from the previous quarter. Curtiss-Wright Corporation, Page 8 Full-Year 2024 Guidance The Company is updating its full-year 2024 Adjusted financial guidance (1) as follows: ($ in millions, except EPS) 2024 Adjusted Non-GAAP Guidance (Prior) 2024 Adjusted Non-GAAP Guidance (Current) Change vs 2023 Adjusted (Current) Total Sales $2,985 - $3,035 $3,010 - $3,060 Up 6% - 8% Operating Income $518 - $533 $525 - $539 Up 6% - 9% Operating Margin 17.4% - 17.6% 17.4% - 17.6% Up 0 - 20 bps Diluted EPS $10.10 - $10.40 $10.40 - $10.65 Up 11% - 14% Free Cash Flow $415 - $435 $425 - $445 Up 3% - 8% (1) Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix. ********** A more detailed breakdown of the Company’s 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted Non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright’s website. Conference Call & Webcast Information The Company will host a conference call to discuss its second quarter 2024 financial results and updates to 2024 guidance at 10:00 a.m. ET on Thursday, August 8, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com . (Tables to Follow) Curtiss-Wright Corporation, Page 9 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) ($'s in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Product sales $ 661,407 $ 583,036 $ 1,257,111 $ 1,107,917 Service sales 123,384 121,360 240,847 227,339 Total net sales 784,791 704,396 1,497,958 1,335,256 Cost of product sales 428,926 369,549 818,403 713,306 Cost of service sales 71,764 75,274 141,699 140,969 Total cost of sales 500,690 444,823 960,102 854,275 Gross profit 284,101 259,573 537,856 480,981 Research and development expenses 22,152 20,210 45,132 42,234 Selling expenses 35,126 34,273 71,891 66,698 General and administrative expenses 95,008 92,315 189,057 180,659 Restructuring expenses 2,918 — 2,918 — Operating income 128,897 112,775 228,858 191,390 Interest expense 11,216 14,992 21,786 27,936 Other income, net 8,560 7,954 18,168 15,721 Earnings before income taxes 126,241 105,737 225,240 179,175 Provision for income taxes (26,770) (24,738) (49,274) (41,330) Net earnings $ 99,471 $ 80,999 $ 175,966 $ 137,845 Net earnings per share: Basic earnings per share $ 2.60 $ 2.11 $ 4.60 $ 3.60 Diluted earnings per share $ 2.58 $ 2.10 $ 4.58 $ 3.58 Dividends per share $ 0.21 $ 0.20 $ 0.41 $ 0.39 Weighted-average shares outstanding: Basic 38,302 38,329 38,273 38,309 Diluted 38,501 38,555 38,460 38,528 Curtiss-Wright Corporation, Page 10 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) ($'s in thousands, except par value) June 30, December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 382,564 $ 406,867 Receivables, net 817,135 732,678 Inventories, net 559,142 510,033 Other current assets 77,039 67,502 Total current assets 1,835,880 1,717,080 Property, plant, and equipment, net 326,969 332,796 Goodwill 1,571,004 1,558,826 Other intangible assets, net 545,448 557,612 Operating lease right-of-use assets, net 146,956 141,435 Prepaid pension asset 272,857 261,869 Other assets 49,080 51,351 Total assets $ 4,748,194 $ 4,620,969 Liabilities Current liabilities: Current portion of long-term debt $ 90,000 $ — Accounts payable 224,778 243,833 Accrued expenses 158,505 188,039 Deferred revenue 341,601 303,872 Other current liabilities 81,632 70,800 Total current liabilities 896,516 806,544 Long-term debt 959,655 1,050,362 Deferred tax liabilities, net 128,277 132,319 Accrued pension and other postretirement benefit costs 67,650 66,875 Long-term operating lease liability 123,586 118,611 Long-term portion of environmental reserves 14,157 12,784 Other liabilities 99,933 105,061 Total liabilities $ 2,289,774 $ 2,292,556 Stockholders' equity Common stock, $1 par value $ 49,187 $ 49,187 Additional paid in capital 135,574 140,182 Retained earnings 3,648,005 3,487,751 Accumulated other comprehensive loss (233,488) (213,223) Less: cost of treasury stock (1,140,858) (1,135,484) Total stockholders' equity $ 2,458,420 $ 2,328,413 Total liabilities and stockholders' equity $ 4,748,194 $ 4,620,969 Curtiss-Wright Corporation, Page 11 Use and Definitions of Non-GAAP Financial Information (Unaudited) The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release. The following definitions are provided: Adjusted Sales, Operating Income, Operating Margin, Net Earnings and Diluted EPS These Adjusted financials are defined as Reported Sales, Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) costs associated with the Company's 2024 Restructuring Program; and (iii) the sale or divestiture of a business or product line, as applicable. Curtiss-Wright Corporation, Page 12 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED) ($'s in thousands) Three Months Ended Three Months Ended June 30, 2024 June 30, 2023 % Change As Reported Adjustments Adjusted As Reported Adjustments Adjusted As Reported Adjusted Sales: Aerospace & Industrial $ 233,232 $ — $ 233,232 $ 226,260 $ — $ 226,260 3 % 3 % Defense Electronics 228,461 — 228,461 197,722 — 197,722 16 % 16 % Naval & Power 323,098 — 323,098 280,414 — 280,414 15 % 15 % Total sales $ 784,791 $ — $ 784,791 $ 704,396 $ — $ 704,396 11 % 11 % Operating income (expense): Aerospace & Industrial (2) $ 35,246 $ 2,619 $ 37,865 $ 35,665 $ — $ 35,665 (1) % 6 % Defense Electronics (2) 58,244 523 58,767 43,180 — 43,180 35 % 36 % Naval & Power (1)(2) 46,283 342 46,625 46,782 2,659 49,441 (1) % (6) % Total segments $ 139,773 $ 3,484 $ 143,257 $ 125,627 $ 2,659 $ 128,286 11 % 12 % Corporate and other (2) (10,876) 964 (9,912) (12,852) — (12,852) 15 % 23 % Total operating income $ 128,897 $ 4,448 $ 133,345 $ 112,775 $ 2,659 $ 115,434 14 % 16 % Operating margins: As Reported Adjusted As Reported Adjusted As Reported Adjusted Aerospace & Industrial 15.1 % 16.2 % 15.8 % 15.8 % (70 bps) 40 bps Defense Electronics 25.5 % 25.7 % 21.8 % 21.8 % 370 bps 390 bps Naval & Power 14.3 % 14.4 % 16.7 % 17.6 % (240 bps) (320 bps) Total Curtiss-Wright 16.4 % 17.0 % 16.0 % 16.4 % 40 bps 60 bps Segment margins 17.8 % 18.3 % 17.8 % 18.2 % — bps 10 bps (1) Excludes first year purchase accounting adjustments in both the current and prior year periods. (2) Excludes costs associated with the Company's 2024 Restructuring Program in the current period. Curtiss-Wright Corporation, Page 13 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED) ($'s in thousands) Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 % Change As Reported Adjustments Adjusted As Reported Adjustments Adjusted As Reported Adjusted Sales: Aerospace & Industrial $ 452,557 $ — $ 452,557 $ 428,707 $ — $ 428,707 6 % 6 % Defense Electronics 440,202 — 440,202 359,876 — 359,876 22 % 22 % Naval & Power 605,199 — 605,199 546,673 — 546,673 11 % 11 % Total sales $ 1,497,958 $ — $ 1,497,958 $ 1,335,256 $ — $ 1,335,256 12 % 12 % Operating income (expense): Aerospace & Industrial (2) $ 62,712 $ 2,619 $ 65,331 $ 62,210 $ — $ 62,210 1 % 5 % Defense Electronics (2) 106,325 523 106,848 66,548 — 66,548 60 % 61 % Naval & Power (1)(2) 81,474 342 81,816 84,719 5,335 90,054 (4) % (9) % Total segments $ 250,511 $ 3,484 $ 253,995 $ 213,477 $ 5,335 $ 218,812 17 % 16 % Corporate and other (2) (21,653) 964 (20,689) (22,087) — (22,087) 2 % 6 % Total operating income $ 228,858 $ 4,448 $ 233,306 $ 191,390 $ 5,335 $ 196,725 20 % 19 % Operating margins: As Reported Adjusted As Reported Adjusted As Reported Adjusted Aerospace & Industrial 13.9 % 14.4 % 14.5 % 14.5 % (60 bps) (10 bps) Defense Electronics 24.2 % 24.3 % 18.5 % 18.5 % 570 bps 580 bps Naval & Power 13.5 % 13.5 % 15.5 % 16.5 % (200 bps) (300 bps) Total Curtiss-Wright 15.3 % 15.6 % 14.3 % 14.7 % 100 bps 90 bps Segment margins 16.7 % 17.0 % 16.0 % 16.4 % 70 bps 60 bps (1) Excludes first year purchase accounting adjustments in both the current and prior year periods. (2) Excludes costs associated with the Company's 2024 Restructuring Program in the current period. Curtiss-Wright Corporation, Page 14 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 June 30, 2024 June 30, 2023 % Change As Reported Adjustments Adjusted Sales As Reported Adjustments Adjusted Sales Change in As Reported Sales Change in Adjusted Sales Aerospace & Defense markets: Aerospace Defense $ 154,104 $ — $ 154,104 $ 132,192 $ — $ 132,192 17 % 17 % Ground Defense 84,939 — 84,939 70,875 — 70,875 20 % 20 % Naval Defense 209,847 — 209,847 180,956 — 180,956 16 % 16 % Commercial Aerospace 93,316 — 93,316 82,033 — 82,033 14 % 14 % Total Aerospace & Defense $ 542,206 $ — $ 542,206 $ 466,056 $ — $ 466,056 16 % 16 % Commercial markets: Power & Process $ 138,601 $ — $ 138,601 $ 131,000 $ — $ 131,000 6 % 6 % General Industrial 103,984 — 103,984 107,340 — 107,340 (3 %) (3 %) Total Commercial $ 242,585 $ — $ 242,585 $ 238,340 $ — $ 238,340 2 % 2 % Total Curtiss-Wright $ 784,791 $ — $ 784,791 $ 704,396 $ — $ 704,396 11 % 11 % Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 % Change As Reported Adjustments Adjusted Sales As Reported Adjustments Adjusted Sales Change in As Reported Sales Change in Adjusted Sales Aerospace & Defense markets: Aerospace Defense $ 286,178 $ — $ 286,178 $ 232,071 $ — $ 232,071 23 % 23 % Ground Defense 175,700 — 175,700 137,132 — 137,132 28 % 28 % Naval Defense 387,494 — 387,494 352,912 — 352,912 10 % 10 % Commercial Aerospace 183,091 — 183,091 152,523 — 152,523 20 % 20 % Total Aerospace & Defense $ 1,032,463 $ — $ 1,032,463 $ 874,638 $ — $ 874,638 18 % 18 % Commercial markets: Power & Process $ 262,639 $ — $ 262,639 $ 251,338 $ — $ 251,338 4 % 4 % General Industrial 202,856 — 202,856 209,280 — 209,280 (3 %) (3 %) Total Commercial $ 465,495 $ — $ 465,495 $ 460,618 $ — $ 460,618 1 % 1 % Total Curtiss-Wright $ 1,497,958 $ — $ 1,497,958 $ 1,335,256 $ — $ 1,335,256 12 % 12 % Curtiss-Wright Corporation, Page 15 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED) Three Months Ended Six Months Ended June 30, June 30, 2024 2023 2024 2023 Diluted earnings per share - As Reported $ 2.58 $ 2.10 $ 4.58 $ 3.58 First year purchase accounting adjustments — 0.05 — 0.10 Restructuring costs 0.09 — 0.09 — Diluted earnings per share - Adjusted (1) $ 2.67 $ 2.15 $ 4.67 $ 3.68 (1) All adjustments are presented net of income taxes. Curtiss-Wright Corporation, Page 16 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, costs associated with the Company's 2024 Restructuring Program, and foreign currency fluctuations. Three Months Ended June 30, 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 3% (1%) 16% 35% 15% (1%) 11% 14% Less: Acquisitions 0% 0% 0% 0% (1%) 1% 0% 1% Restructuring 0% 7% 0% 1% 0% 0% 0% 4% Foreign Currency 0% 0% 0% 0% 0% 0% 0% (1%) Organic 3% 6% 16% 36% 14% 0% 11% 18% Six Months Ended June 30, 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 6% 1% 22% 60% 11% (4%) 12% 20% Less: Acquisitions 0% 0% 0% 0% (1%) 1% 0% 0% Restructuring 0% 4% 0% 0% 0% 0% 0% 2% Foreign Currency (1%) 1% 0% 0% 0% 0% 0% 0% Organic 5% 6% 22% 60% 10% (3%) 12% 22% Curtiss-Wright Corporation, Page 17 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 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 Six Months Ended June 30, June 30, 2024 2023 2024 2023 Net cash provided by operating activities $ 111,335 $ 110,952 $ 65,702 $ 19,353 Capital expenditures (11,064) (12,003) (23,119) (22,664) Free cash flow $ 100,271 $ 98,949 $ 42,583 $ (3,311) Westinghouse legal settlement — — — 10,000 Adjusted free cash flow $ 100,271 $ 98,949 $ 42,583 $ 6,689 Adjusted free cash flow conversion 97 % 119 % 24 % 5 % Curtiss-Wright Corporation, Page 18 CURTISS-WRIGHT CORPORATION 2024 Guidance As of August 7, 2024 ($'s in millions, except per share data) 2023 Reported (GAAP) 2023 Adjustments (Non-GAAP) (1,2) 2023 Adjusted (Non-GAAP) (1,2) 2024 Reported Guidance (GAAP) 2024 Adjustments (Non-GAAP) (3) 2024 Adjusted Guidance (Non-GAAP) (3) Low High Low High 2024 Chg vs 2023 Adjusted Sales: Aerospace & Industrial $ 887 $ — $ 887 $ 925 $ 940 $ — $ 925 $ 940 4 - 6% Defense Electronics 816 — 816 882 897 — 882 897 8 -10% Naval & Power 1,142 — 1,142 1,203 1,223 — 1,203 1,223 5 -7% Total sales $ 2,845 $ — $ 2,845 $ 3,010 $ 3,060 $ — $ 3,010 $ 3,060 6 - 8% Operating income: Aerospace & Industrial $ 145 $ — $ 145 $ 147 $ 151 $ 10 $ 157 $ 161 8 - 11% Defense Electronics 192 — 192 209 215 3 212 218 11 - 13% Naval & Power 189 9 198 194 199 — 194 199 (2) - 0% Total segments 526 9 535 550 565 13 562 578 Corporate and other (42) — (42) (40) (41) 2 (38) (39) Total operating income $ 485 $ 9 $ 494 $ 510 $ 524 $ 15 $ 525 $ 539 6 - 9% Interest expense $ (51) $ — $ (51) $ (44) $ (45) $ — $ (44) $ (45) Other income, net 30 — 30 35 35 — 35 35 Earnings before income taxes 463 9 472 501 514 15 516 529 Provision for income taxes (109) (2) (111) (113) (116) (3) (116) (119) Net earnings $ 355 $ 6 $ 361 $ 388 $ 398 $ 12 $ 400 $ 410 Diluted earnings per share $ 9.20 $ 0.18 $ 9.38 $ 10.09 $ 10.34 $ 0.31 $ 10.40 $ 10.65 11 - 14% Diluted shares outstanding 38.5 38.5 38.5 38.5 38.5 38.5 Effective tax rate 23.4 % 23.4 % 22.5 % 22.5 % 22.5 % 22.5 % Operating margins: Aerospace & Industrial 16.4 % 16.4 % 15.9 % 16.1 % 16.9 % 17.1 % 50 to 70 bps Defense Electronics 23.5 % 23.5 % 23.7 % 24.0 % 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 % 16.9 % 17.1 % 17.4 % 17.6 % 0 to 20 bps Free cash flow $ 403 $ 10 $ 413 $ 425 $ 445 $ — $ 425 $ 445 3 - 8% 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. (3) 2024 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding costs associated with the Company's 2024 Restructuring Program and the impact of first year purchase accounting adjustments. Curtiss-Wright Corporation, Page 19 CURTISS-WRIGHT CORPORATION 2024 Sales Growth Guidance by End Market As of August 7, 2024 2024 % Change vs. 2023 Adjusted Prior Current % Total Sales Aerospace & Defense Markets Aerospace Defense 6 - 8% 7 - 9% 20% Ground Defense 10 - 12% 10 - 12% 11% Naval Defense 3 - 5% 5 - 7% 25% Commercial Aerospace 10 - 12% 13 - 15% 12% Total Aerospace & Defense 6 - 8% 8 - 10% 68% Commercial Markets Power & Process 4 - 6% 4 - 6% 18% General Industrial 1 - 3% Flat 14% Total Commercial 2 - 4% 1 - 3% 32% Total Curtiss-Wright Sales 5 - 7% 6 - 8% 100% Note: Sales percentages may not add due to rounding. Curtiss-Wright Corporation, Page 20 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
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.