Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its third quarter of fiscal year 2022. (All amounts are presented
on an as reported (U.S. GAAP) basis unless otherwise indicated. All
per share amounts are presented on a fully diluted basis. All
comparisons are made to the same period of the prior year unless
otherwise stated.)
Third Quarter Overview
- Net sales were $614 million,
compared to $557 million, an increase of 10 percent.
- Net earnings were $39 million, or
$0.64 per share, compared to net earnings of $49 million, or $0.74
per share.
- Net cash provided by operating
activities was $86 million for the first nine months of fiscal
2022, compared to $318 million. Free cash flow1 for the first nine
months of fiscal 2022 was $49 million, compared to $297 million.
Adjusted free cash flow1 for the first nine months of fiscal 2022
was $52 million. There were no adjustments made to free cash flow
during the first nine months of the prior fiscal year.
“We delivered double digit sales growth in the quarter.
Aerospace segment sales were boosted by increased aircraft
utilization and strong OEM build rate demand. In our Industrial
segment, we saw sales growth in most of our end markets. Weakness
in China natural gas truck production and unfavorable foreign
currency exchange rates contributed to a decrease in Industrial
segment sales,” said Chip Blankenship, Chairman and Chief Executive
Officer. “Profitability was impacted by labor and material
inflation, as well as greater than expected global supply chain and
labor disruptions. We remain focused on mitigating these impacts to
fully realize the ongoing recovery in our end markets.”
Third Quarter Company
Results
Net sales for the third quarter of fiscal 2022 were $614
million, compared to $557 million, an increase of 10 percent. Sales
for the third quarter were negatively impacted by approximately $18
million from foreign currency exchange rates. The impact of ongoing
global supply chain and labor disruptions remains consistent with
the second quarter of 2022 at approximately $100 million.
Net earnings were $39 million, or $0.64 per share, for the third
quarter of 2022, compared to $49 million, or $0.74 per share. EBIT1
was $58 million for the third quarter of 2022, compared to $67
million.
The effective tax rate was 21.6 percent for the third quarter of
2022, compared to 16.8 percent.
Segment Results
Aerospace
Aerospace segment net sales for the third quarter of fiscal 2022
were $402 million, compared to $341 million, an increase of 18
percent.
Commercial OEM and aftermarket sales increased significantly
compared to the prior year quarter, driven by higher OEM production
rates, continued recovery in passenger traffic, and increasing
aircraft utilization. Defense sales were down compared to the prior
year quarter primarily due to lower defense aftermarket sales as a
result of global supply chain and labor disruptions.
Segment earnings for the third quarter of 2022 were $57 million,
compared to $53 million. Segment earnings as a percent of segment
net sales were 14.1 percent for the third quarter of 2022, compared
to 15.6 percent. Aerospace segment earnings increased primarily as
a result of significantly higher commercial OEM and aftermarket
sales. Segment earnings, including as a percent of segment net
sales, were negatively impacted by net inflationary impacts on
material and labor costs, as well as increases in manufacturing
costs related to supply chain disruptions and inefficiencies
related to training recent hires.
Industrial
Industrial segment net sales for the third quarter of fiscal
2022 were $213 million, compared to $216 million, a decrease of 1
percent. Industrial sales for the third quarter of 2022 declined
primarily due to weakness in China natural gas engines and the
unfavorable impact of foreign currency exchange rates, partially
offset by higher marine sales driven by higher utilization of the
in-service fleet as well as increased industrial turbomachinery
sales supporting increasing demand for power generation and process
industries. The foreign currency exchange rates' unfavorable impact
on Industrial segment net sales for the third quarter of 2022 was
approximately $16 million.
Industrial segment earnings for the third quarter of 2022 were
$21 million, or 9.9 percent of segment net sales, compared to $27
million, or 12.6 percent of segment net sales. Industrial segment
earnings decreased primarily as a result of additional costs
incurred due to supply chain disruptions and training recent hires,
net inflationary impacts on material and labor costs, and
unfavorable foreign currency effects. These impacts were partially
offset by higher sales volume.
Nonsegment
Nonsegment expenses were $19 million for the third quarter of
fiscal 2022, compared to $14 million.
Year-to-Date Results
Net sales for the first nine months of 2022 were $1.74 billion,
compared to $1.68 billion. Net earnings for the first nine months
of 2022 were $118 million, or $1.84 per share, compared to $159
million, or $2.42 per share. Adjusted net earnings for the first
nine months of 2022 were $122 million, or $1.91 per share. There
were no adjustments to earnings in the prior year period.
The effective tax rate was 17.2 percent for the first nine
months of 2022, compared to 14.1 percent. The adjusted effective
tax rate for the first nine months of 2022 was 17.6 percent. There
were no adjustments to the effective tax rate in the first nine
months of the prior year.
Aerospace segment net sales for the first nine months of 2022
were $1.11 billion, compared to $1.03 billion. Aerospace segment
earnings for the first nine months of 2022 were $167 million, or
15.1 percent of segment net sales, compared to $169 million, or
16.4 percent of segment net sales.
Industrial segment net sales for the first nine months of 2022
were $632 million, compared to $648 million. Industrial segment
earnings for the first nine months of 2022 were $62 million, or 9.8
percent of segment net sales, compared to $88 million, or 13.6
percent of segment net sales.
Nonsegment expenses were $64 million for the first nine months
of 2022, compared to $47 million. Adjusted nonsegment expenses for
the first nine months of 2022 were $58 million. There were no
adjustments to nonsegment expense for the first nine months of the
prior year.
Cash Flow and Financial
Position
Net cash provided by operating activities for the first nine
months of fiscal year 2022 was $86 million, compared to $318
million. Payments for property, plant, and equipment for the first
nine months of 2022 were $37 million, compared to $21 million in
2021.
Free cash flow for the first nine months of 2022 was $49
million, compared to $297 million. Adjusted free cash flow for the
first nine months of 2022 was $52 million. There were no
adjustments to cash flow in the prior year. The decrease in free
cash flow and adjusted free cash flow was primarily related to
working capital increases as a result of production delays from
supply chain disruptions.
During the first nine months of 2022, $462 million was returned
to stockholders in the form of $34 million of dividends and $428
million of repurchased shares.
Total debt was $766 million at June 30, 2022, compared to $740
million at June 30, 2021. Debt-to-EBITDA1 leverage was 2.0 times
EBITDA at June 30, 2022, compared to 1.7 times EBITDA at June 30,
2021.
Fiscal Year 2022 Outlook
In light of the continuing global supply chain and labor
disruptions and net inflationary impacts, we are revising our FY22
guidance as follows:
Total net sales for 2022 are now expected to be between $2.35
billion and $2.40 billion. Aerospace sales growth is expected to be
between 8 and 10 percent. Industrial sales are expected to be
approximately flat.
Aerospace segment earnings as a percent of segment net sales are
now expected to be approximately 15 percent. Industrial segment
earnings as a percent of segment net sales are now expected to be
between 9 and 10 percent.
The adjusted effective tax rate is now expected to be
approximately 17 percent.
Adjusted free cash flow is now expected to be approximately $100
million to $120 million. Capital expenditures are still expected to
be approximately $60 million.
Adjusted earnings per share is now expected to be between $2.55
and $2.75 based on approximately 63 million of fully diluted
weighted average shares outstanding.
Conference Call
Woodward will hold an investor conference call at 4:30 p.m. EDT,
August 1, 2022, to provide an overview of the financial performance
for the third quarter of fiscal year 2022, business highlights, and
outlook for the remainder of fiscal 2022. You are invited to listen
to the live webcast of our conference call, or a recording, and
view or download accompanying presentation slides at our website,
www.woodward.com2.
You may also listen to the call by dialing 1-888-440-4531
(domestic) or 1-646-960-0808 (international). Participants should
call prior to the start time to allow for registration; the
Conference ID is 4278216. An audio replay will be available by
telephone from 7:30 p.m. EDT on August 1, 2022 until 11:59 p.m. EDT
on August 15, 2022. The telephone number to access the replay is
1-800-770-2030 (domestic) or 1-647-362-9199 (international),
reference Conference ID 4278216.
A webcast presentation will be available on the website by
selecting “Investors/Events & Presentations”.
About Woodward, Inc.
Woodward is the global leader in the design, manufacturing, and
service of energy conversion and control solutions for the
aerospace and industrial equipment markets. Together with our
customers, we are enabling the path to a cleaner, decarbonized
world. Our innovative fluid, combustion, electrical, propulsion and
motion control systems perform in some of the world’s harshest
environments. Woodward is a global company headquartered in Fort
Collins, Colorado, USA. Visit our website at www.woodward.com.
Cautionary Statement Information in this press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties, including, but not limited to, statements
regarding our business and financial outlook for fiscal year 2022,
including assumptions regarding our outlook, trends in our
business, statements about the continued and expected or potential
effects of global supply chain and labor disruptions, the ongoing
net inflationary pressures on our materials, labor and
manufacturing costs, inefficiencies related to training recent
hires, the potential impact of such disruptions, inefficiencies and
pressures on our business and the management of our business,
including our ability to effectively mitigate the effects of such
disruptions, inefficiencies and pressures to fully realize the
ongoing recovery in our end-markets, ongoing challenges in the
China natural gas truck market, the anticipated recovery in
aircraft passenger traffic and fleet utilization, continued demand
increases for power generation and process industries, our ability
to improve our operational execution, and expectations related to
the performance of our segments and specific markets within those
segments, and our future sales and the anticipated future sales
growth, earnings, earnings per share and adjusted earnings per
share, segment earnings as a percent of segment net sales, cash
flows, free cash flows and adjusted free cash flows, our
anticipated financial performance during the remainder of fiscal
year 2022. Readers are cautioned that these forward-looking
statements are only predictions and are subject to risks,
uncertainties, and assumptions that are difficult to predict.
Factors that could cause actual results and the timing of certain
events to differ materially from the forward-looking statements
include, but are not limited to: (1) uncertainties related to the
COVID-19 pandemic; (2) global economic uncertainty and instability
in the financial markets that affect Woodward, its customers, and
its supply chain; (3) risks related to continued constraints and
disruptions in the global supply chain and labor markets; (4)
Woodward’s long sales cycle; (5) risks related to Woodward’s
concentration of revenue among a relatively small number of
customers; (6) Woodward’s ability to implement and realize the
intended effects of any restructuring efforts; (7) Woodward’s
ability to successfully manage competitive factors including
expenses and fluctuations in sales; (8) changes and consolidations
in the aerospace market; (9) Woodward’s financial obligations
including debt obligations and tax expenses and exposures; (10)
risks related to Woodward’s U.S. government contracting activities
including potential changes in government spending patterns; (11)
Woodward’s ability to protect its intellectual property rights and
avoid infringing the intellectual property rights of others; (12)
changes in the estimates of fair value of reporting units or of
long-lived assets; (13) environmental risks; (14) Woodward’s
continued access to a stable workforce and favorable labor
relations with its employees; (15) Woodward’s ability to manage
various regulatory and legal matters; (16) risks from operating
internationally; (17) cybersecurity and other technological risks;
and other risk factors described in Woodward's filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the fiscal year ended September 30, 2021, any
subsequently filed Quarterly Report on Form 10-Q, as well as its
Quarterly Report on Form 10-Q for the third quarter ended June 30,
2022, which we expect to file shortly, and other risks described in
Woodward’s filings with the Securities and Exchange Commission.
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
|
(Unaudited - in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended |
|
|
Nine-Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
614,332 |
|
|
$ |
556,675 |
|
|
$ |
1,742,757 |
|
|
$ |
1,675,615 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
480,403 |
|
|
|
422,457 |
|
|
|
1,352,979 |
|
|
|
1,258,340 |
|
Selling, general, and administrative expenses |
|
|
46,490 |
|
|
|
48,021 |
|
|
|
152,920 |
|
|
|
148,461 |
|
Research and development costs |
|
|
32,224 |
|
|
|
29,765 |
|
|
|
90,000 |
|
|
|
89,388 |
|
Interest expense |
|
|
8,533 |
|
|
|
8,397 |
|
|
|
25,036 |
|
|
|
25,552 |
|
Interest income |
|
|
(353 |
) |
|
|
(308 |
) |
|
|
(1,494 |
) |
|
|
(1,086 |
) |
Other (income) expense, net |
|
|
(3,252 |
) |
|
|
(10,355 |
) |
|
|
(18,813 |
) |
|
|
(29,809 |
) |
Total costs and expenses |
|
|
564,045 |
|
|
|
497,977 |
|
|
|
1,600,628 |
|
|
|
1,490,846 |
|
Earnings before income
taxes |
|
|
50,287 |
|
|
|
58,698 |
|
|
|
142,129 |
|
|
|
184,769 |
|
Income taxes |
|
|
10,841 |
|
|
|
9,837 |
|
|
|
24,472 |
|
|
|
26,025 |
|
Net
earnings |
|
$ |
39,446 |
|
|
$ |
48,861 |
|
|
$ |
117,657 |
|
|
$ |
158,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.65 |
|
|
$ |
0.77 |
|
|
$ |
1.90 |
|
|
$ |
2.51 |
|
Diluted earnings per
share |
|
$ |
0.64 |
|
|
$ |
0.74 |
|
|
$ |
1.84 |
|
|
$ |
2.42 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,506 |
|
|
|
63,559 |
|
|
|
62,052 |
|
|
|
63,215 |
|
Diluted |
|
|
62,088 |
|
|
|
65,910 |
|
|
|
63,937 |
|
|
|
65,499 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share paid
to Woodward common stockholders |
$ |
0.1900 |
|
|
$ |
0.1625 |
|
|
0.5425 |
|
|
$ |
0.4063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
September 30, |
|
|
|
2022 |
|
2021 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
99,701 |
|
$ |
448,462 |
|
Accounts receivable |
|
|
587,546 |
|
|
523,051 |
|
Inventories |
|
|
503,664 |
|
|
419,971 |
|
Income taxes receivable |
|
|
13,408 |
|
|
12,071 |
|
Other current assets |
|
|
49,396 |
|
|
61,168 |
|
Total current assets |
|
|
1,253,715 |
|
|
1,464,723 |
|
Property, plant, and equipment, net |
|
|
913,468 |
|
|
950,569 |
|
Goodwill |
|
|
779,144 |
|
|
805,333 |
|
Intangible assets, net |
|
|
484,867 |
|
|
559,289 |
|
Deferred income tax assets |
|
|
13,481 |
|
|
14,066 |
|
Other assets |
|
|
311,114 |
|
|
297,024 |
|
Total
assets |
|
$ |
3,755,789 |
|
$ |
4,091,004 |
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Short-term debt |
|
$ |
49,200 |
|
$ |
- |
|
Current portion of long-term debt |
|
|
458 |
|
|
728 |
|
Accounts payable |
|
|
195,402 |
|
|
170,909 |
|
Income taxes payable |
|
|
18,713 |
|
|
11,481 |
|
Accrued liabilities |
|
|
160,701 |
|
|
183,139 |
|
Total current liabilities |
|
|
424,474 |
|
|
366,257 |
|
Long-term debt, less current portion |
|
|
716,744 |
|
|
734,122 |
|
Deferred income tax liabilities |
|
|
150,469 |
|
|
157,936 |
|
Other liabilities |
|
|
554,489 |
|
|
617,908 |
|
Total liabilities |
|
|
1,846,176 |
|
|
1,876,223 |
|
Stockholders’ equity |
|
|
1,909,613 |
|
|
2,214,781 |
|
Total liabilities and
stockholders’ equity |
|
$ |
3,755,789 |
|
$ |
4,091,004 |
|
Woodward, Inc. and Subsidiaries |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Months Ended |
|
|
|
June 30, |
|
|
|
2022 |
|
|
2021 |
|
Net cash provided by
operating activities |
|
$ |
86,016 |
|
|
$ |
317,915 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Payments for purchase of
property, plant, and equipment |
|
|
(37,105 |
) |
|
|
(21,347 |
) |
Proceeds from sale of
assets |
|
|
4 |
|
|
|
141 |
|
Proceeds from business
divestiture |
|
|
6,000 |
|
|
|
- |
|
Payments for purchases of
short-term investments |
|
|
(9,619 |
) |
|
|
(14,326 |
) |
Proceeds from sales of
short-term investments |
|
|
11,305 |
|
|
|
16,566 |
|
Net cash used in
investing activities |
|
|
(29,415 |
) |
|
|
(18,966 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Cash dividends paid |
|
|
(33,572 |
) |
|
|
(25,734 |
) |
Proceeds from sales of
treasury stock |
|
|
20,283 |
|
|
|
32,219 |
|
Purchase of treasury
stock |
|
|
(440,233 |
) |
|
|
- |
|
Borrowings on revolving lines
of credit and short-term borrowings |
|
|
477,400 |
|
|
|
74,400 |
|
Payments on revolving lines of
credit and short-term borrowings |
|
|
(428,200 |
) |
|
|
(74,400 |
) |
Payments of long-term debt and
finance lease obligations |
|
|
(644 |
) |
|
|
(101,214 |
) |
Net cash used in
financing activities |
|
|
(404,966 |
) |
|
|
(94,729 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(396 |
) |
|
|
4,517 |
|
Net change in cash and
cash equivalents |
|
|
(348,761 |
) |
|
|
208,737 |
|
Cash and cash equivalents at
beginning of year |
|
|
448,462 |
|
|
|
153,270 |
|
Cash and cash equivalents at
end of period |
|
$ |
99,701 |
|
|
$ |
362,007 |
|
Woodward, Inc. and Subsidiaries |
|
SEGMENT NET SALES AND EARNINGS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended June 30, |
|
|
Nine-Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
401,712 |
|
|
$ |
340,912 |
|
|
$ |
1,110,904 |
|
|
$ |
1,027,285 |
|
Industrial |
|
|
212,620 |
|
|
|
215,763 |
|
|
|
631,853 |
|
|
|
648,330 |
|
Total consolidated net
sales |
|
$ |
614,332 |
|
|
$ |
556,675 |
|
|
$ |
1,742,757 |
|
|
$ |
1,675,615 |
|
Segment
earnings*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
56,566 |
|
|
$ |
53,167 |
|
|
$ |
167,458 |
|
|
$ |
168,641 |
|
As a percent of segment net
sales |
|
|
14.1 |
% |
|
|
15.6 |
% |
|
|
15.1 |
% |
|
|
16.4 |
% |
Industrial |
|
|
21,102 |
|
|
|
27,166 |
|
|
|
62,029 |
|
|
|
87,925 |
|
As a percent of segment net
sales |
|
|
9.9 |
% |
|
|
12.6 |
% |
|
|
9.8 |
% |
|
|
13.6 |
% |
Total segment
earnings |
|
|
77,668 |
|
|
|
80,333 |
|
|
|
229,487 |
|
|
|
256,566 |
|
Nonsegment expenses |
|
|
(19,201 |
) |
|
|
(13,546 |
) |
|
|
(63,816 |
) |
|
|
(47,331 |
) |
EBIT |
|
|
58,467 |
|
|
|
66,787 |
|
|
|
165,671 |
|
|
|
209,235 |
|
Interest expense, net |
|
|
(8,180 |
) |
|
|
(8,089 |
) |
|
|
(23,542 |
) |
|
|
(24,466 |
) |
Consolidated earnings
before income taxes |
|
$ |
50,287 |
|
|
$ |
58,698 |
|
|
$ |
142,129 |
|
|
$ |
184,769 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*This schedule
reconciles segment earnings, which exclude certain costs, to
consolidated earnings before taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property,
plant and equipment |
$ |
12,955 |
|
|
$ |
8,034 |
|
|
37,105 |
|
|
$ |
21,347 |
|
Depreciation
expense |
$ |
20,618 |
|
|
$ |
21,717 |
|
|
62,674 |
|
|
$ |
66,244 |
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF EARNINGS TO ADJUSTED
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended |
|
Three-Months Ended |
|
|
June 30, 2022 |
|
June 30, 2021 |
|
|
BeforeIncome Tax |
|
Net ofIncome Tax |
|
Per Share,Net ofIncome Tax |
|
BeforeIncome Tax |
|
Net ofIncome Tax |
|
Per Share,Net ofIncome Tax |
Earnings (U.S.
GAAP) |
|
$ |
50,287 |
|
$ |
39,446 |
|
$ |
0.64 |
|
$ |
58,698 |
|
$ |
48,861 |
|
$ |
0.74 |
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Business development activities |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Total non-U.S. GAAP
adjustments |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
Adjusted earnings
(Non-U.S. GAAP) |
|
$ |
50,287 |
|
$ |
39,446 |
|
$ |
0.64 |
|
$ |
58,698 |
|
$ |
48,861 |
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF EARNINGS TO ADJUSTED
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Months Ended |
|
Nine-Months Ended |
|
|
June 30, 2022 |
|
June 30, 2021 |
|
|
BeforeIncome Tax |
|
Net ofIncome Tax |
|
Per Share,Net ofIncome Tax |
|
BeforeIncome Tax |
|
Net ofIncome Tax |
|
Per Share,Net ofIncome Tax |
Earnings (U.S.
GAAP) |
|
$ |
142,129 |
|
$ |
117,657 |
|
$ |
1.84 |
|
$ |
184,769 |
|
$ |
158,744 |
|
$ |
2.42 |
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
|
3,272 |
|
|
2,454 |
|
|
0.04 |
|
|
- |
|
|
- |
|
|
- |
Business development activities |
|
|
2,982 |
|
|
2,236 |
|
|
0.03 |
|
|
- |
|
|
- |
|
|
- |
Total non-U.S. GAAP
adjustments |
|
|
6,254 |
|
|
4,690 |
|
|
0.07 |
|
|
- |
|
|
- |
|
|
- |
Adjusted earnings
(Non-U.S. GAAP) |
|
$ |
148,383 |
|
$ |
122,347 |
|
$ |
1.91 |
|
$ |
184,769 |
|
$ |
158,744 |
|
$ |
2.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO
EBIT1 AND ADJUSTED
EBIT1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Three-Months Ended June 30, |
|
|
Nine-Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net earnings (U.S. GAAP) |
|
$ |
39,446 |
|
|
$ |
48,861 |
|
|
$ |
117,657 |
|
|
$ |
158,744 |
|
Income taxes |
|
|
10,841 |
|
|
|
9,837 |
|
|
|
24,472 |
|
|
|
26,025 |
|
Interest expense |
|
|
8,533 |
|
|
|
8,397 |
|
|
|
25,036 |
|
|
|
25,552 |
|
Interest income |
|
|
(353 |
) |
|
|
(308 |
) |
|
|
(1,494 |
) |
|
|
(1,086 |
) |
EBIT
(Non-U.S. GAAP) |
|
|
58,467 |
|
|
|
66,787 |
|
|
|
165,671 |
|
|
|
209,235 |
|
Non-U.S. GAAP
adjustments* |
|
|
- |
|
|
|
- |
|
|
|
6,254 |
|
|
|
- |
|
Adjusted EBIT
(Non-U.S. GAAP) |
|
$ |
58,467 |
|
|
$ |
66,787 |
|
|
$ |
171,925 |
|
|
$ |
209,235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See Reconciliation
of Earnings to Adjusted Earnings1 table above for the list of
Non-U.S. GAAP adjustments made in the applicable periods. |
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO
EBITDA1AND ADJUSTED
EBITDA1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Three-Months Ended June 30, |
|
|
Nine-Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net earnings (U.S. GAAP) |
|
$ |
39,446 |
|
|
$ |
48,861 |
|
|
$ |
117,657 |
|
|
$ |
158,744 |
|
Income taxes |
|
|
10,841 |
|
|
|
9,837 |
|
|
|
24,472 |
|
|
|
26,025 |
|
Interest expense |
|
|
8,533 |
|
|
|
8,397 |
|
|
|
25,036 |
|
|
|
25,552 |
|
Interest income |
|
|
(353 |
) |
|
|
(308 |
) |
|
|
(1,494 |
) |
|
|
(1,086 |
) |
Amortization of intangible
assets |
|
|
9,309 |
|
|
|
10,526 |
|
|
|
28,584 |
|
|
|
31,555 |
|
Depreciation expense |
|
|
20,618 |
|
|
|
21,717 |
|
|
|
62,674 |
|
|
|
66,244 |
|
EBITDA (Non-U.S. GAAP) |
|
|
88,394 |
|
|
|
99,030 |
|
|
|
256,929 |
|
|
|
307,034 |
|
Non-U.S. GAAP
adjustments* |
|
|
- |
|
|
|
- |
|
|
|
6,254 |
|
|
|
- |
|
Adjusted
EBITDA (Non-U.S. GAAP) |
|
$ |
88,394 |
|
|
$ |
99,030 |
|
|
$ |
263,183 |
|
|
$ |
307,034 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See
Reconciliation of Earnings to Adjusted Earnings1table above for the
list of Non-U.S. GAAP adjustments made in the applicable
periods. |
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED
NONSEGMENT EXPENSES1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended June 30, |
|
Nine-Months Ended June 30, |
|
|
2022 |
|
2021 |
|
2022 |
|
|
2021 |
Nonsegment expenses (U.S.
GAAP) |
|
$ |
19,201 |
|
$ |
13,546 |
|
$ |
63,816 |
|
|
$ |
47,331 |
Non-recurring matter unrelated
to the ongoing operations of the business |
|
|
- |
|
|
- |
|
|
(3,272 |
) |
|
|
- |
Business development
activities |
|
|
- |
|
|
- |
|
|
(2,982 |
) |
|
|
- |
Adjusted nonsegment
expenses (Non-U.S. GAAP) |
|
$ |
19,201 |
|
$ |
13,546 |
|
$ |
57,562 |
|
|
$ |
47,331 |
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO
FREE CASH FLOW1AND ADJUSTED FREE
CASH FLOW1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Months Ended June 30, |
|
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities (U.S. GAAP) |
|
$ |
86,016 |
|
|
$ |
317,915 |
|
Payments for property, plant,
and equipment |
|
|
(37,105 |
) |
|
|
(21,347 |
) |
Free cash
flow (Non-U.S. GAAP) |
|
|
48,911 |
|
|
|
296,568 |
|
Cash paid for business
development activities |
|
|
2,982 |
|
|
|
- |
|
Cash paid for restructuring
charges |
|
|
505 |
|
|
|
- |
|
Adjusted free cash
flow (Non-U.S. GAAP) |
|
$ |
52,398 |
|
|
$ |
296,568 |
|
1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net
earnings, adjusted earnings per share, adjusted EBIT, adjusted
EBITDA, adjusted effective tax rate, and adjusted nonsegment
expenses exclude, as applicable, (i) costs related to business
development activities and (ii) a charge and partial reversal
related to a non-recurring matter unrelated to the ongoing
operations of the business. Woodward believes that these items are
short-term costs or charges and are otherwise not related to the
ongoing operations of the business. Therefore, Woodward uses them
to illustrate more clearly how the underlying business of Woodward
is performing. Adjusted free cash flow is free cash flow (defined
below) plus the cash payments for costs related to business
development activities and restructuring activities. Management
believes these adjustments to free cash flow better portray
Woodward’s operating performance. Guidance with respect to non-U.S.
GAAP measures as provided in this release excludes, as applicable,
costs, charges and payments related to (i) business development
activities, and (ii) restructuring activities.
EBIT (earnings before interest and taxes), EBITDA (earnings
before interest, taxes, depreciation and amortization), free cash
flow, adjusted free cash flow, adjusted net earnings, adjusted
earnings per share, adjusted EBIT, adjusted EBITDA, adjusted
effective tax rate, and adjusted nonsegment expenses are financial
measures not prepared and presented in accordance with accounting
principles generally accepted in the United States of America (U.S.
GAAP). Management uses EBIT and adjusted EBIT to evaluate
Woodward’s operating performance without the impacts of financing
and tax related considerations. Management uses EBITDA and adjusted
EBITDA in evaluating Woodward’s operating performance, making
business decisions, including developing budgets, managing
expenditures, forecasting future periods, and evaluating capital
structure impacts of various strategic scenarios. Management also
uses free cash flow, which is derived from net cash provided by or
used in operating activities less payments for property, plant, and
equipment, as well as adjusted free cash flow (as described above),
in reviewing the financial performance of Woodward’s various
business segments and evaluating cash generation levels. Securities
analysts, investors, and others frequently use EBIT, EBITDA and
free cash flow in their evaluation of companies, particularly those
with significant property, plant, and equipment, and intangible
assets that are subject to amortization. The use of any of these
non-U.S. GAAP financial measures is not intended to be considered
in isolation of, or as a substitute for, the financial information
prepared and presented in accordance with U.S. GAAP. Because EBIT,
EBITDA, adjusted EBIT, and adjusted EBITDA exclude certain
financial information compared with net earnings, the most
comparable U.S. GAAP financial measure, users of this financial
information should consider the information that is excluded. Free
cash flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of our ability
to fund our cash needs. Management’s calculations of EBIT, EBITDA,
adjusted net earnings, adjusted earnings per share, adjusted EBIT,
adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment
expenses, free cash flow, and adjusted free cash flow may differ
from similarly titled measures used by other companies, limiting
their usefulness as comparative measures.
2Website, Facebook, Twitter: Woodward has used, and intends
to continue to use, its Investor Relations website, its Facebook
page and its Twitter handle as means of disclosing material
non-public information and for complying with its disclosure
obligations under Regulation FD.
Contact: |
Dan Provaznik Director, Investor
Relations970-498-3849Dan.Provaznik@woodward.com |
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