Curtiss-Wright Reports First Quarter 2005 Financial Results Sales
up 20%; Backlog at Record Level; Reaffirms Full-Year Guidance
ROSELAND, N.J., April 28 /PRNewswire-FirstCall/ -- Curtiss-Wright
Corporation (NYSE:CWNYSE:CW.B) today reports financial results for
the quarter ended March 31, 2005. The highlights are as follows: *
Net sales for the first quarter of 2005 increased 20% to $258.5
million from $214.9 million in the first quarter of 2004.
Acquisitions made in 2005 and 2004 contributed $35.8 million in
incremental sales in the first quarter of 2005. * Operating income
in the first quarter of 2005 decreased 3% to $24.6 million from
$25.3 million in the first quarter of 2004. Acquisitions made in
2005 and 2004 contributed $0.1 million in incremental operating
income in the first quarter of 2005. * Net earnings for the first
quarter of 2005 decreased 7% to $14.5 million, or $0.67 per diluted
share, from $15.6 million, or $0.74 per diluted share, in the first
quarter of 2004. Net earnings for the first quarter of 2005 include
a net after tax gain of $1.5 million (approximately $0.07 per
diluted share), related to the sale of non-operating property. In
addition, the net earnings for the first quarter of 2004 included
nonrecurring tax benefits of $1.5 million (approximately $0.07 per
diluted share). * New orders received in the first quarter of 2005
were $325.8 million, up 38% compared to the first quarter of 2004.
* Backlog reached a new record high level of $748.2 million, up 19%
from $627.7 million at December 31, 2004. "We are pleased to report
continued sales growth in 2005 and again attaining a new record
level of backlog," commented Martin R. Benante, Chairman and CEO of
Curtiss-Wright Corporation. "Our new orders were strong in both the
first quarter of 2005 and fourth quarter of last year which
provides us with good momentum for the rest of the year. We
experienced strong organic sales and operating income growth of 13%
and 17%, respectively, from our Metal Treatment segment in the
first quarter of 2005. In addition, we also had strong organic
sales growth in the oil and gas, commercial aerospace, and power
generation markets. Many of our military programs are in the early
stages of the procurement cycle and the ramp-up in the second half
of the year will improve those margins. In addition, we recently
won several developmental contracts that have begun but generally
produce lower margins than production contracts; however, these
contracts should provide us future opportunities. We are continuing
to integrate our acquisitions and experience some business
consolidation costs during the first quarter. However, we expect
these integration efforts to lead to reduced costs and improved
profitability in the future." Sales Sales growth in first quarter
of 2005 as compared to the prior year period was mainly driven by
the contributions from our 2004 and 2005 acquisitions. Acquisitions
made in 2004 and 2005 contributed $35.8 million in incremental
sales for the quarter ended March 31, 2005 over the comparable
period in 2004. The base businesses generated overall organic
growth of 4% in the first quarter of 2005. This organic sales
growth was driven by our Metal Treatment and Motion Control
segments, which experienced organic growth of 13% and 5%,
respectively, compared to the prior year period. Our Flow Control
segment's organic sales declined 1% in the first quarter of 2005 as
compared to the prior year period. In our base businesses, higher
sales from our Metal Treatment segment of global shot peening
services, higher global commercial aerospace and general industrial
sales from our Motion Control segment, and higher sales from our
Flow Control segment to the oil and gas and commercial power
generation markets, all contributed to the organic growth. In
addition, foreign currency translation favorably impacted sales by
$2.2 million for the quarter ended March 31, 2005, compared to the
prior year period. Operating Income Operating income for the first
quarter of 2005 decreased 3% over the comparable prior year period.
The decline was due to lower organic operating income of 2%, offset
somewhat by our 2004 and 2005 acquisitions, which contributed $0.1
million of incremental operating income in the first quarter of
2005. The decline in organic operating income was caused primarily
by unfavorable sales mix in our Flow Control and Motion Control
segments. This decline was partially offset by organic operating
income growth of 17% in the Metal Treatment segment. Operating
income was also negatively impacted by $0.5 million higher pension
expense from the Curtiss-Wright pension plans in the first quarter
2005 as compared to the prior year. In addition, foreign currency
translation favorably impacted operating income by $0.4 million for
the first quarter 2005, as compared to the prior year period. Net
Earnings Net earnings decreased 7% for the quarter ended March 31,
2005, from the comparable prior year period. Net earnings for the
first quarter of 2005 include a net after tax gain of $1.5 million
(approximately $0.07 per diluted share), related to the sale of
non-operating property. Higher interest expense, due to both higher
debt levels and higher interest rates, lowered net earnings in the
first quarter of 2005. In addition, net earnings for the first
quarter of 2004 included nonrecurring tax benefits of $1.5 million
(approximately $0.07 per diluted share). Segment Performance Flow
Control -- Sales for the first quarter of 2005 were $109.4 million,
up 22% over the comparable period last year due to contributions
from the 2004 acquisitions. This segment experienced an overall
decline in organic growth of 1% primarily resulting from lower
overall sales to the U.S. Navy due to timing of customer driven
delivery schedules, offset partially by higher sales to the oil and
gas and commercial power generation markets. Sales of this business
segment also benefited from favorable foreign currency translation
of $0.4 million in the first quarter of 2005 compared to the prior
year period. Operating income for this segment decreased 1% in the
first quarter of 2005 compared to the prior year period. The
decline was due to the lower sales volume to the U.S. Navy,
decreased higher margin spares sales to the oil and gas market,
increased sales of generic electronics products and development
programs, which generate lower margins, mostly offset by
contributions from the 2004 acquisitions. Motion Control -- Sales
for the first quarter of 2005 of $100.1 million increased 20% over
last year, principally due to the contributions from the 2004 and
2005 acquisitions. Sales from the base businesses increased 5% in
the first quarter of 2005 as compared to the prior year period.
This organic growth increase was due primarily to higher sales of
industrial sensor products, higher sales of electronic products for
military helicopters and mobile gun systems, and higher sales of
OEM and spares products and repair and overhaul services to the
commercial aerospace market, as compared to the prior year period.
Partially offsetting these increases are lower sales of F-16
spares, and lower sales of tilting train systems in Europe due to
expiration of this program in 2004. Sales of this business segment
also benefited from favorable foreign currency translation of $1.0
million in the first quarter of 2005 as compared to the prior year
period. Operating income for this segment decreased 23% for the
first quarter of 2005 compared to the prior year period. The
decline was driven primarily by decreased higher margin sales, such
as the F-16 spares and tilting train program, and higher
development work which generates lower margins. In addition, this
segment experienced increased business consolidation costs,
primarily in the embedded computing group, which are anticipated to
produce reduced costs and improved profitability in the future.
Metal Treatment -- Sales for the first quarter of 2005 of $49.0
million were 16% higher than the comparable period last year. The
improvement was mainly due to organic growth of 13% driven by
higher global shot peening revenues from the aerospace and
automotive markets. Favorable foreign currency translation
positively impacted sales by $0.8 million in the first quarter of
2005 as compared to the prior year period. Operating income
increased 19% for the first quarter of 2005 as compared to the
prior year period, primarily as a result of the higher sales
volume. The 2004 acquisitions and favorable foreign currency
translation also contributed to the increase in operating income.
2005 Management Guidance We reaffirm our 2005 full-year guidance of
revenues in the range of $1.05 billion to $1.10 billion; operating
income in the range of $130 - $138 million, which includes $2
million of pension expense from the Curtiss-Wright pension plan;
and earnings per share in the range of $3.24 to $3.45 per share.
This guidance reflects our expectations of 10-15% growth in
revenue, 15-20% growth in operating income, and 10-15% growth in
EPS, excluding $0.16 per share of nonrecurring tax benefits
reported in 2004. Full year free cash flow (defined as cash flow
from operating activities less capital expenditures) is expected to
be between $55 and $60 million for 2005. EPS guidance is based on
estimated fully diluted shares outstanding of 22 million shares for
the full year 2005. 2005 guidance includes an estimate for costs
associated with the continuation of Sarbanes-Oxley compliance, but
it does not assume any acquisitions completed in 2005. Mr. Benante
concluded, "Much of our revenues are dependant upon customer
delivery schedules which result in variability from quarter to
quarter. We anticipated and previously indicated that our first
quarter would be the lightest in 2005 and we have reaffirmed our
full year 2005 guidance. Our backlog is strong and at a new record
level. In 2005, we should once again demonstrate our ability to
generate long-term shareholder value by growing our sales and
earnings. Over the past several years our operating income has been
growing faster than our sales while we executed a very active, yet
disciplined, acquisition program. Our historical performance
demonstrates our ability to execute our strategy and achieve our
financial targets. We continue to experience increasing demand for
our new technologies, many of which are only at the beginning of
their life cycles, which should continue to provide superior
returns to our shareholders into the future. Our diversification
strategy, the continued successful integration of our acquisitions,
and ongoing emphasis on technology will continue to generate growth
opportunities in each of our three business segments in 2005 and
beyond." The Company will host a conference call to discuss the
first quarter 2005 results at 9:00 EDT Friday, April 29, 2005. A
live webcast of the call can be heard on the Internet by visiting
the company's website at http://www.curtisswright.com/ and clicking
on the investor information page or by visiting other websites that
provide links to corporate webcasts. CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (In thousands,
except per share data) Three Months Ended Three Months March 31,
Change 2005 2004 $ % Net sales $258,487 $214,933 $43,554 20.26%
Cost of sales 172,718 143,338 29,380 20.50% Gross profit 85,769
71,595 14,174 19.80% Research & development expenses 10,228
8,212 2,016 24.55% Selling expenses 16,924 12,604 4,320 34.27%
General and administrative expenses 33,468 25,249 8,219 32.55%
Environmental remediation and administrative expenses, net 83 240
(157) -65.42% Pension expense (income), net 500 40 460 1150.00%
Operating income 24,566 25,250 (684) -2.71% Other income
(expenses), net 2,789 (489) 3,278 -670.35% Interest expense (4,303)
(2,265) (2,038) 89.98% Earnings before income taxes 23,052 22,496
556 2.47% Provision for income taxes 8,529 6,887 1,642 23.84% Net
earnings $14,523 $15,609 ($1,086) -6.96% Basic earnings per share
$0.68 $0.75 Diluted earnings per share $0.67 $0.74 Dividends per
share $0.09 $0.09 Weighted average shares outstanding: Basic 21,511
20,881 Diluted 21,814 21,206 CURTISS-WRIGHT CORPORATION and
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) March 31,
December 31, Change 2005 2004 $ % Assets Current Assets: Cash and
cash equivalents $41,783 $41,038 $745 1.8% Receivables, net 251,917
214,084 37,833 17.7% Inventories, net 128,144 115,979 12,165 10.5%
Deferred income taxes 23,699 25,693 (1,994) -7.8% Other current
assets 11,923 12,460 (537) -4.3% Total current assets 457,466
409,254 48,212 11.8% Property, plant, and equipment, net 269,235
265,243 3,992 1.5% Prepaid pension costs 77,313 77,802 (489) -0.6%
Goodwill, net 392,240 364,313 27,927 7.7% Other intangible assets,
net 155,872 140,369 15,503 11.0% Other assets 14,565 21,459 (6,894)
-32.1% Total Assets $1,366,691 $1,278,440 $88,251 6.9% Liabilities
Current Liabilities: Short-term debt $981 $1,630 $(649) -39.8%
Accounts payable 64,158 65,364 (1,206) -1.8% Accrued expenses
47,245 63,413 (16,168) -25.5% Income taxes payable 18,324 13,895
4,429 31.9% Other current liabilities 52,405 52,793 (388) -0.7%
Total current liabilities 183,113 197,095 (13,982) -7.1% Long-term
debt 419,083 340,860 78,223 22.9% Deferred income taxes 46,934
40,043 6,891 17.2% Accrued pension & other postretirement
benefit costs 82,317 80,612 1,705 2.1% Long-term portion of
environmental reserves 24,194 23,356 838 3.6% Other liabilities
22,651 20,860 1,791 8.6% Total Liabilities 778,292 702,826 75,466
10.7% Stockholders' Equity Common stock, $1 par value 16,682 16,646
36 0.2% Class B common stock, $1 par value 8,765 8,765 0 0.0%
Capital surplus 56,005 55,885 120 0.2% Retained earnings 613,649
601,070 12,579 2.1% Unearned portion of restricted stock (28) (34)
6 -17.6% Accumulated other comprehensive income 33,004 36,797
(3,793) -10.3% 728,077 719,129 8,948 1.2% Less: cost of treasury
stock 139,678 143,515 (3,837) -2.7% Total Stockholders' Equity
588,399 575,614 12,785 2.2% Total Liabilities and Stockholders'
Equity $1,366,691 $1,278,440 $88,251 6.9% CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES SEGMENT INFORMATION (In thousands)
Three Months Ended March 31, % 2005 2004 Change Sales: Flow Control
$109,413 $89,395 22.4% Motion Control 100,084 83,344 20.1% Metal
Treatment 48,990 42,194 16.1% Total Sales $258,487 $214,933 20.3%
Operating Income: Flow Control $10,349 $10,431 -0.8% Motion Control
6,390 8,289 -22.9% Metal Treatment 7,817 6,577 18.9% Total Segments
24,556 25,297 -2.9% Pension (Expense)/Income (500) (40) 1150.0%
Corporate & Other 510 (7) -7385.7% Total Operating Income
$24,566 $25,250 -2.7% Operating Margins: Flow Control 9.5% 11.7%
Motion Control 6.4% 9.9% Metal Treatment 16.0% 15.6% Total
Curtiss-Wright 9.5% 11.7% About Curtiss-Wright Curtiss-Wright
Corporation is a diversified company headquartered in Roseland, New
Jersey. The Company designs, manufactures and overhauls products
for motion control and flow control applications and provides a
variety of metal treatment services. The firm employs approximately
5,800 people. More information on Curtiss-Wright can be found at
http://www.curtisswright.com/. Forward-looking statements in this
release are made pursuant to the Safe Harbor provisions of the
Private Securities Litigation Reform Act of 1995. 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 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.
Please refer to the Company's current SEC filings under the
Securities and Exchange Act of 1934, as amended, for further
information. This press release and additional information is
available at http://www.curtisswright.com/. DATASOURCE:
Curtiss-Wright Corporation CONTACT: Alexandra M. Deignan of
Curtiss-Wright Corporation, +1-973-597-4734, Web site:
http://www.curtisswright.com/
Copyright