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Curtiss-Wright Reports First Quarter 2023 Financial Results and Reaffirms Full-year 2023 Guidance

Curtiss-Wright Corporation (NYSE: CW) reports financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Highlights:

  • Reported and Adjusted sales of $631 million, up 13% year-over-year;
  • Reported operating income of $79 million, operating margin of 12.5%, and diluted earnings per share (EPS) of $1.48;
  • Adjusted operating income of $81 million, up 15%;
  • Adjusted operating margin of 12.9%, up 20 basis points;
  • Adjusted diluted EPS of $1.53, up 17%; and
  • New orders of $718 million, up 13%, reflected strong demand within our Aerospace & Defense (A&D) and Commercial markets, and a book-to-bill that exceeded 1.1x.

"Curtiss-Wright delivered strong first quarter 2023 results, highlighted by double-digit growth in new orders, sales, operating income and diluted EPS," said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. "Higher sales in each of our end markets and our continued drive for commercial excellence enabled us to generate 20 basis points in operating margin expansion and achieve 17% growth in Adjusted diluted EPS. Sales in our Aerospace & Defense markets increased 13% during the quarter reflecting some stabilization within the defense electronics supply chain and another solid quarter for our engineered arresting systems business, while sales in our Commercial markets increased 12%, as we continue to benefit from strong demand in our commercial nuclear, process and general industrial markets."

“We are maintaining our full-year 2023 outlook and anticipate steady, sequential improvement in sales, operating margin, diluted EPS and free cash flow as we move through the year. Overall, we continue to successfully execute on our Pivot to Growth strategy, which will enable us to deliver significant long-term value for our stakeholders.”

First Quarter 2023 Operating Results

(In millions)

Q1-2023

Q1-2022

Change

Reported

 

 

 

Sales

$

631

 

$

559

 

13

%

Operating income

$

79

 

$

61

 

30

%

Operating margin

 

12.5

%

 

10.8

%

170 bps

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

631

 

$

559

 

13

%

Operating income

$

81

 

$

71

 

15

%

Operating margin

 

12.9

%

 

12.7

%

20 bps

(1)

Reconciliations of Reported to Adjusted operating results are available in the Appendix.

  • Sales of $631 million, up $71 million, or 13% compared with the prior year, and included a $5 million or 1% headwind from unfavorable foreign currency translation, mainly within our Aerospace & Industrial segment;
  • Total A&D market sales increased 13%, while total Commercial market sales increased 12%;
  • In our A&D markets, our results reflected strong sales growth in our defense markets driven by some moderate easing of defense electronics supply chain headwinds, particularly in ground defense, and the contribution from the acquisition of our engineered arresting systems business, as well as strong mid-teens sales growth in the commercial aerospace market;
  • In our Commercial markets, we experienced strong growth in the power & process markets and higher sales in the general industrial market; and
  • Adjusted operating income of $81 million increased 15%, while Adjusted operating margin increased 20 basis points to 12.9%, principally driven by favorable overhead absorption on higher revenues in our Aerospace & Industrial and Naval & Power segments. These increases were partially offset by unfavorable mix on higher revenues in the Defense Electronics segment.

First Quarter 2023 Segment Performance

Aerospace & Industrial

(In millions)

Q1-2023

Q1-2022

Change

Reported

 

 

 

Sales

$

202

 

$

191

 

6

%

Operating income

$

27

 

$

25

 

7

%

Operating margin

 

13.1

%

 

13.0

%

10 bps

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

202

 

$

191

 

6

%

Operating income

$

27

 

$

25

 

7

%

Operating margin

 

13.1

%

 

13.0

%

10 bps

(1)

Note: There were no adjustments to segment operating results.

  • Sales of $202 million, up $11 million, or 6% overall, and included a $4 million or 2% headwind from unfavorable foreign currency translation;
  • Higher commercial aerospace market revenue reflected strong demand for sensors products and surface treatment services on narrowbody and widebody platforms;
  • Higher general industrial market revenue was principally driven by increased sales of industrial vehicle products serving on- and off-highway platforms, as well as higher sales of surface treatment services;
  • Aerospace defense market revenue declines reflected lower sales of actuation equipment on various fighter jet programs; and
  • Operating income was $27 million, up 7% from the prior year, while operating margin increased 10 basis points to 13.1%, mainly reflecting solid absorption on higher sales.

Defense Electronics

(In millions)

Q1-2023

Q1-2022

Change

Reported

 

 

 

Sales

$

162

 

$

143

 

13

%

Operating income

$

23

 

$

23

 

0

%

Operating margin

 

14.4

%

 

16.3

%

(190 bps)

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

162

 

$

143

 

13

%

Operating income

$

23

 

$

23

 

0

%

Operating margin

 

14.4

%

 

16.3

%

(190 bps)

(1)

Note: There were no adjustments to segment operating results.

  • Sales of $162 million, up $19 million, or 13%;
  • Aerospace defense market revenue declines principally reflected the timing of sales of our embedded computing equipment on various helicopter and unmanned aerial vehicle programs;
  • Strong revenue growth in the ground defense market reflected higher sales of tactical battlefield communications equipment; and
  • Operating income was $23 million, essentially flat compared with the prior year, while operating margin decreased 190 basis points to 14.4%, as favorable absorption on higher revenues was offset by unfavorable mix on defense electronics products and higher investment in research and development.

Naval & Power

(In millions)

Q1-2023

Q1-2022

Change

Reported

 

 

 

Sales

$

266

 

$

225

 

18

%

Operating income

$

38

 

$

27

 

39

%

Operating margin

 

14.3

%

 

12.1

%

220 bps

 

 

 

 

Adjusted (1)

 

 

 

Sales

$

266

 

$

225

 

18

%

Operating income

$

41

 

$

33

 

24

%

Operating margin

 

15.3

%

 

14.5

%

80 bps

(1)

Reconciliations of Reported to Adjusted operating results are available in the Appendix.

  • Adjusted sales of $266 million, up $41 million, or 18%;
  • Higher aerospace defense market revenues reflected a solid contribution from the arresting systems acquisition, including increased sales to international customers;
  • Naval defense market revenue increases principally reflected higher revenues on the Columbia-class submarine and CVN-81 aircraft carrier programs, partially offset by timing of revenues on the CVN-80 aircraft carrier program;
  • Strong double-digit revenue growth in the power & process market reflected solid growth in nuclear aftermarket revenues supporting the maintenance of existing operating reactors and higher industrial valve sales in the process market; and
  • Adjusted operating income was $41 million, up 24% from the prior year, while adjusted operating margin increased 80 basis points to 15.3%, driven by favorable absorption on higher organic revenues and a solid contribution from the arresting systems acquisition.

Free Cash Flow

(In millions)

Q1-2023

Q1-2022

Change

Net cash used for operating activities

$

(92

)

$

(124

)

26

%

Capital expenditures

 

(11

)

 

(11

)

2

%

Reported free cash flow

$

(102

)

$

(135

)

24

%

Adjusted free cash flow (1)

$

(92

)

$

(112

)

18

%

(1)

A reconciliation of Reported to Adjusted free cash flow is available in the Appendix.

  • Reported free cash flow of ($102) million increased $33 million, primarily due to higher cash earnings and improved working capital in part due to the collection of the remaining $20 million cash payment on the China Direct AP1000 program; Those increases were partially offset by higher tax payments;
  • Adjusted free cash flow of ($92) million increased $20 million; and
  • Capital expenditures were essentially flat compared with the prior year.

New Orders and Backlog

  • New orders of $718 million increased 13% compared with the prior year and generated an overall book-to-bill that exceeded 1.1x, principally driven by strong demand for defense electronics and actuation products within our A&D markets, and for industrial valve and commercial nuclear products within our Commercial markets; and
  • Backlog of $2.7 billion, up 3% from December 31, 2022, reflects higher demand in both our A&D and Commercial markets.

Share Repurchase and Dividends

  • During the first quarter, the Company repurchased 73,152 shares of its common stock for approximately $12 million; and
  • The Company declared a quarterly dividend of $0.19 a share.

Full-Year 2023 Guidance

The Company is maintaining its full-year 2023 Adjusted financial guidance (1) as follows:

(In millions, except EPS)

2023 Adjusted

Non-GAAP Guidance

% Chg vs 2022

Total Sales

$2,655 - $2,710

Up 4% - 6%

Operating Income

$463 - $477

Up 5% - 8%

Operating Margin

17.4% - 17.6%

Up 10 - 30 bps

Diluted EPS

$8.65 - $8.90

Up 6% - 10%

Free Cash Flow

$360 - $400

Up 22% - 36%

(1)

Reconciliations of Reported to Adjusted 2022 operating results and 2023 financial guidance are available in the Appendix, and exclude first year purchase accounting costs in both periods associated with acquisitions.

A more detailed breakdown of the Company’s 2023 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 2023 financial results and business outlook at 10:00 a.m. ET on Thursday, May 4, 2023. 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 and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

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

 

 

 

 

 

Three Months Ended

 

March 31,

 

 

2023

 

 

 

2022

 

Product sales

$

524,881

 

 

$

453,421

 

Service sales

 

105,979

 

 

 

106,040

 

Total net sales

 

630,860

 

 

 

559,461

 

 

 

 

 

Cost of product sales

 

343,757

 

 

 

294,527

 

Cost of service sales

 

65,695

 

 

 

63,532

 

Total cost of sales

 

409,452

 

 

 

358,059

 

 

 

 

 

Gross profit

 

221,408

 

 

 

201,402

 

 

 

 

 

Research and development expenses

 

22,024

 

 

 

20,549

 

Selling expenses

 

32,425

 

 

 

28,092

 

General and administrative expenses

 

88,344

 

 

 

87,600

 

Loss on divestiture

 

 

 

 

4,651

 

 

 

 

 

Operating income

 

78,615

 

 

 

60,510

 

 

 

 

 

Interest expense

 

12,944

 

 

 

9,530

 

Other income, net

 

7,767

 

 

 

2,997

 

 

 

 

 

Earnings before income taxes

 

73,438

 

 

 

53,977

 

Provision for income taxes

 

(16,592

)

 

 

(13,292

)

Net earnings

$

56,846

 

 

$

40,685

 

 

 

 

 

Net earnings per share:

 

 

 

Basic earnings per share

$

1.48

 

 

$

1.06

 

Diluted earnings per share

$

1.48

 

 

$

1.05

 

 

 

 

 

Dividends per share

$

0.19

 

 

$

0.18

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

Basic

 

38,303

 

 

 

38,456

 

Diluted

 

38,516

 

 

 

38,668

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($'s in thousands, except par value)

 

 

 

 

 

March 31,

 

December 31,

 

 

2023

 

 

 

2022

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

130,659

 

 

$

256,974

 

Receivables, net

 

720,248

 

 

 

724,603

 

Inventories, net

 

527,937

 

 

 

483,113

 

Other current assets

 

67,415

 

 

 

52,623

 

Total current assets

 

1,446,259

 

 

 

1,517,313

 

Property, plant, and equipment, net

 

340,313

 

 

 

342,708

 

Goodwill

 

1,549,148

 

 

 

1,544,635

 

Other intangible assets, net

 

605,217

 

 

 

620,897

 

Operating lease right-of-use assets, net

 

145,017

 

 

 

153,855

 

Prepaid pension asset

 

227,547

 

 

 

222,627

 

Other assets

 

48,624

 

 

 

47,567

 

Total assets

$

4,362,125

 

 

$

4,449,602

 

 

 

 

 

Liabilities

 

 

 

Current liabilities:

 

 

 

Current portion of long-term and short term debt

$

 

 

$

202,500

 

Accounts payable

 

207,573

 

 

 

266,525

 

Accrued expenses

 

153,678

 

 

 

177,536

 

Deferred revenue

 

234,487

 

 

 

242,483

 

Other current liabilities

 

76,452

 

 

 

82,395

 

Total current liabilities

 

672,190

 

 

 

971,439

 

Long-term debt, net

 

1,229,619

 

 

 

1,051,900

 

Deferred tax liabilities

 

122,607

 

 

 

123,001

 

Accrued pension and other postretirement benefit costs

 

58,062

 

 

 

58,348

 

Long-term operating lease liability

 

124,025

 

 

 

132,275

 

Long-term portion of environmental reserves

 

13,171

 

 

 

12,547

 

Other liabilities

 

88,292

 

 

 

107,973

 

Total liabilities

$

2,307,966

 

 

$

2,457,483

 

 

 

 

 

Stockholders' equity

 

 

 

Common stock, $1 par value

$

49,187

 

 

$

49,187

 

Additional paid in capital

 

126,909

 

 

 

134,553

 

Retained earnings

 

3,223,944

 

 

 

3,174,396

 

Accumulated other comprehensive loss

 

(244,442

)

 

 

(258,916

)

Less: cost of treasury stock

 

(1,101,439

)

 

 

(1,107,101

)

Total stockholders' equity

 

2,054,159

 

 

 

1,992,119

 

 

 

 

 

Total liabilities and stockholders' equity

$

4,362,125

 

 

$

4,449,602

 

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) 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Three Months Ended

 

 

 

 

 

March 31, 2023

 

March 31, 2022

 

% Change

 

As

Reported

 

Adjustments

 

Adjusted

 

As

Reported

 

Adjustments

 

Adjusted

 

Reported

 

Adjusted

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

202,447

 

 

$

 

$

202,447

 

 

$

191,112

 

 

$

 

$

191,112

 

 

6

%

 

6

%

Defense Electronics

 

162,154

 

 

 

 

 

162,154

 

 

 

143,069

 

 

 

 

 

143,069

 

 

13

%

 

13

%

Naval & Power

 

266,259

 

 

 

 

 

266,259

 

 

 

225,280

 

 

 

 

 

225,280

 

 

18

%

 

18

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

$

630,860

 

 

$

 

$

630,860

 

 

$

559,461

 

 

$

 

$

559,461

 

 

13

%

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

26,545

 

 

$

 

$

26,545

 

 

$

24,853

 

 

$

 

$

24,853

 

 

7

%

 

7

%

Defense Electronics

 

23,368

 

 

 

 

 

23,368

 

 

 

23,290

 

 

 

 

 

23,290

 

 

%

 

%

Naval & Power (1)(2)

 

37,937

 

 

 

2,676

 

 

40,613

 

 

 

27,288

 

 

 

5,427

 

 

32,715

 

 

39

%

 

24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segments

$

87,850

 

 

$

2,676

 

$

90,526

 

 

$

75,431

 

 

$

5,427

 

$

80,858

 

 

16

%

 

12

%

Corporate and other (3)

 

(9,235

)

 

 

 

 

(9,235

)

 

 

(14,921

)

 

 

4,876

 

 

(10,045

)

 

38

%

 

8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating income

$

78,615

 

 

$

2,676

 

$

81,291

 

 

$

60,510

 

 

$

10,303

 

$

70,813

 

 

30

%

 

15

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

As

Reported

 

 

 

Adjusted

 

As

Reported

 

 

 

Adjusted

 

Reported

 

Adjusted

Aerospace & Industrial

 

13.1

%

 

 

 

 

13.1

%

 

 

13.0

%

 

 

 

 

13.0

%

 

10 bps

 

10 bps

Defense Electronics

 

14.4

%

 

 

 

 

14.4

%

 

 

16.3

%

 

 

 

 

16.3

%

 

(190 bps)

 

(190 bps)

Naval & Power

 

14.3

%

 

 

 

 

15.3

%

 

 

12.1

%

 

 

 

 

14.5

%

 

220 bps

 

80 bps

Total Curtiss-Wright

 

12.5

%

 

 

 

 

12.9

%

 

 

10.8

%

 

 

 

 

12.7

%

 

170 bps

 

20 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment margins

 

13.9

%

 

 

 

 

14.3

%

 

 

13.5

%

 

 

 

 

14.5

%

 

40 bps

 

(20 bps)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Excludes first year purchase accounting adjustments in the current period.

(2) Excludes the results of operations from our German valves business, which was sold in January 2022, and the loss on divestiture in the prior year period.

(3) Excludes costs associated with shareholder activism in the prior year period.

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, 2023

 

March 31, 2022

 

2023 vs. 2022

 

Reported Sales

 

Adjustments

 

Adjusted Sales

 

Reported Sales

 

Adjustments

 

Adjusted Sales

 

Change in Reported Sales

Change in Adjusted Sales

Aerospace & Defense markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace Defense

$

99,879

 

$

 

$

99,879

 

$

98,004

 

$

 

$

98,004

 

2

%

2

%

Ground Defense

 

66,256

 

 

 

 

66,256

 

 

39,108

 

 

 

 

39,108

 

69

%

69

%

Naval Defense

 

171,956

 

 

 

 

171,956

 

 

162,967

 

 

 

 

162,967

 

6

%

6

%

Commercial Aerospace

 

70,490

 

 

 

 

70,490

 

 

60,892

 

 

 

 

60,892

 

16

%

16

%

Total Aerospace & Defense

$

408,581

 

$

 

$

408,581

 

$

360,971

 

$

 

$

360,971

 

13

%

13

%

 

Commercial markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Power & Process

 

120,339

 

 

 

 

120,339

 

 

104,788

 

 

 

 

104,788

 

15

%

15

%

General Industrial

 

101,940

 

 

 

 

101,940

 

 

93,702

 

 

 

 

93,702

 

9

%

9

%

Total Commercial

$

222,279

 

$

 

$

222,279

 

$

198,490

 

$

 

$

198,490

 

12

%

12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Curtiss-Wright

$

630,860

 

$

 

$

630,860

 

$

559,461

 

$

 

$

559,461

 

13

%

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED)

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Diluted earnings per share - As Reported

$

1.48

 

$

1.05

First year purchase accounting adjustments

 

0.05

 

 

Divested German valves business

 

 

 

0.11

Costs associated with shareholder activism

 

 

 

0.10

Former executive pension settlement expense

 

 

 

0.05

Diluted earnings per share - Adjusted (1)

$

1.53

 

$

1.31

 

 

 

 

(1) All adjustments are presented net of income taxes.

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, loss from sale of our industrial valves business in Germany, and foreign currency fluctuations.

 

Three Months Ended

 

March 31,

 

2023 vs. 2022

 

Aerospace & Industrial

 

Defense Electronics

 

Naval & Power

 

Total Curtiss-Wright

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

 

Sales

 

Operating

income

As Reported

6%

 

7%

 

13%

 

0%

 

18%

 

39%

 

13%

 

30%

Less: Acquisitions

0%

 

0%

 

0%

 

0%

 

(7%)

 

0%

 

(3%)

 

0%

Loss on divestiture

0%

 

0%

 

0%

 

0%

 

0%

 

(20%)

 

0%

 

(9%)

Foreign Currency

2%

 

(3%)

 

1%

 

(7%)

 

0%

 

(1%)

 

1%

 

(5%)

Organic

8%

 

4%

 

14%

 

(7%)

 

11%

 

18%

 

11%

 

16%

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 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.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NON-GAAP FINANCIAL DATA (UNAUDITED)

($'s in thousands)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

March 31,

 

2023

 

2022

Net cash used for operating activities

$

(91,599

)

 

$

(124,315

)

Capital expenditures

 

(10,661

)

 

 

(10,896

)

Free cash flow

$

(102,260

)

 

$

(135,211

)

Westinghouse legal settlement

 

10,000

 

 

 

15,000

 

Pension payment to former executive

 

 

 

 

8,214

 

Adjusted free cash flow

$

(92,260

)

 

$

(111,997

)

Adjusted free cash flow conversion

 

(157

%)

 

 

(221

%)

CURTISS-WRIGHT CORPORATION

2023 Guidance

As of May 3, 2023

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2022

Reported

(GAAP)

 

2022

Adjustments

(Non-GAAP)(1,3)

 

2022

Adjusted

(Non-GAAP)(1,3)

 

2023

Reported Guidance

(GAAP)

 

2023

Adjustments

(Non-GAAP)(2,3)

 

2023

Adjusted Guidance

(Non-GAAP)(2,3)

 

 

 

 

 

 

 

Low

High

 

 

 

Low

High

 

Chg

vs 2022

Adjusted

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

836

 

 

$

 

 

$

836

 

 

$

845

 

$

860

 

 

$

 

 

$

845

 

$

860

 

 

1 - 3%

Defense Electronics

 

690

 

 

 

 

 

 

690

 

 

 

725

 

 

750

 

 

 

 

 

 

725

 

 

750

 

 

5 - 9%

Naval & Power

 

1,031

 

 

 

 

 

 

1,031

 

 

 

1,085

 

 

1,100

 

 

 

 

 

 

1,085

 

 

1,100

 

 

5 - 7%

Total sales

$

2,557

 

 

$

 

 

$

2,557

 

 

$

2,655

 

$

2,710

 

 

$

 

 

$

2,655

 

$

2,710

 

 

4 to 6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

$

137

 

 

$

1

 

 

$

138

 

 

$

143

 

$

148

 

 

$

 

 

$

143

 

$

148

 

 

4 - 7%

Defense Electronics

 

155

 

 

 

 

 

 

155

 

 

 

165

 

 

172

 

 

 

 

 

 

165

 

 

172

 

 

7 - 11%

Naval & Power

 

178

 

 

 

14

 

 

 

192

 

 

 

182

 

 

186

 

 

 

8

 

 

 

190

 

 

194

 

 

(1) - 1%

Total segments

 

469

 

 

 

15

 

 

 

484

 

 

 

490

 

 

506

 

 

 

8

 

 

 

498

 

 

514

 

 

 

Corporate and other

 

(46

)

 

 

5

 

 

 

(41

)

 

 

(35

)

 

(38

)

 

 

 

 

 

(35

)

 

(38

)

 

 

Total operating income

$

423

 

 

$

20

 

 

$

443

 

 

$

455

 

$

469

 

 

$

8

 

 

$

463

 

$

477

 

 

5 to 8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

$

(47

)

 

$

 

 

$

(47

)

 

$

(52

)

$

(54

)

 

$

 

 

$

(52

)

$

(54

)

 

 

Other income, net

 

13

 

 

 

4

 

 

 

17

 

 

 

27

 

 

28

 

 

 

 

 

 

27

 

 

28

 

 

 

Earnings before income taxes

 

389

 

 

 

24

 

 

 

413

 

 

 

430

 

 

443

 

 

 

8

 

 

 

438

 

 

451

 

 

 

Provision for income taxes

 

(95

)

 

 

(4

)

 

 

(99

)

 

 

(103

)

 

(106

)

 

 

(2

)

 

 

(105

)

 

(108

)

 

 

Net earnings

$

294

 

 

$

20

 

 

$

314

 

 

$

327

 

$

336

 

 

$

6

 

 

$

333

 

$

343

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

$

7.62

 

 

$

0.51

 

 

$

8.13

 

 

$

8.49

 

$

8.74

 

 

$

0.16

 

 

$

8.65

 

$

8.90

 

 

6 to 10%

Diluted shares outstanding

 

38.6

 

 

 

 

 

38.6

 

 

 

38.5

 

 

38.5

 

 

 

 

 

38.5

 

 

38.5

 

 

 

Effective tax rate

 

24.4

%

 

 

 

 

24.0

%

 

 

24.0

%

 

24.0

%

 

 

 

 

24.0

%

 

24.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Industrial

 

16.4

%

 

 

 

 

16.5

%

 

 

17.0

%

 

17.2

%

 

 

 

 

17.0

%

 

17.2

%

 

50 to 70 bps

Defense Electronics

 

22.4

%

 

 

 

 

22.4

%

 

 

22.7

%

 

22.9

%

 

 

 

 

22.7

%

 

22.9

%

 

30 to 50 bps

Naval & Power

 

17.2

%

 

 

 

 

18.6

%

 

 

16.7

%

 

16.9

%

 

 

 

 

17.5

%

 

17.7

%

 

(110) to (90) bps

Total operating margin

 

16.6

%

 

 

 

 

17.3

%

 

 

17.1

%

 

17.3

%

 

 

 

 

17.4

%

 

17.6

%

 

10 to 30 bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Free cash flow

$

257

 

 

$

39

 

 

$

296

 

 

$

350

 

$

390

 

 

$

10

 

 

$

360

 

$

400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

(1) 2022 Adjusted financials exclude the impact of first year purchase accounting adjustments, the loss on sale of our German valves business, costs associated with shareholder activism and pension settlement charges related to the retirement of two former executives.

(2) 2023 Adjusted financials exclude the impact of first year purchase accounting adjustments.

(3) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2022 Adjusted Free Cash Flow excluded one-time pension settlement payments of $24 million and a legal settlement payment of $15 million. 2023 Adjusted Free Cash Flow guidance excludes a legal settlement payment of $10 million.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURTISS-WRIGHT CORPORATION

2023 Sales Growth Guidance by End Market

As of May 3, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

2023 % Change

 

 

 

vs 2022 Adjusted(1)

 

% Total Sales

Aerospace & Defense Markets

 

 

 

Aerospace Defense

9 - 11%

 

20%

Ground Defense

4 - 6%

 

9%

Naval Defense

4 - 6%

 

27%

Commercial Aerospace

5 - 7%

 

11%

Total Aerospace & Defense

6 - 8%

 

67%

 

 

 

 

Commercial Markets

 

 

 

Power & Process

Flat

 

18%

General Industrial

2 - 4%

 

16%

Total Commercial

0 - 2%

 

33%

 

 

 

 

Total Curtiss-Wright Sales

4 - 6%

 

100%

 

 

 

 

Note: Sales percentages may not add due to rounding.

 

 

 

(1) 2023 and 2022 Sales include the contribution from the engineered arresting systems business, acquired on June 30, 2022, to the Aerospace Defense market.

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 8,100 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, 2022, and subsequent reports filed with the Securities and Exchange Commission.

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

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