Curtiss-Wright Reports First Quarter 2004 Financial Results Sales
and Operating Income Up 19% & 6%, Respectively; Backlog at
Record Levels ROSELAND, N.J., April 29 /PRNewswire-FirstCall/ --
Curtiss-Wright Corporation today announced financial results for
the first quarter ended March 31, 2004. The highlights for the
first quarter are as follows: * Net sales for the first quarter of
2004 increased 19% to $214.9 million from $179.9 million in the
first quarter of 2003. Acquisitions made in 2003 and 2004
contributed $29.6 million in incremental sales in the first quarter
of 2004. * Operating income in the first quarter of 2004 increased
6% to $25.3 million from $23.9 million in the first quarter of
2003. Acquisitions made in 2003 and 2004 contributed $2.3 million
in incremental operating income in the first quarter of 2004. * Net
earnings for the first quarter of 2004 increased 11% to $15.6
million, or $0.74 per diluted share, from $14.1 million, or $0.68
per diluted share (adjusted for the 2-for-1 stock split in December
2003). The net earnings for the first quarter include a one-time
tax benefit of $1.5 million resulting from a change in legal
structure of one of our subsidiaries. In addition, the increase in
2004 net earnings was achieved despite a $1.4 million increase in
interest expense (approximately $0.04 per diluted share) and a $0.6
million decrease in pension income from the first quarter of 2003.
* Backlog increased 10% to a new record high of $558.0 million from
$505.5 million at December 31, 2003. "We are pleased to again
report higher sales and operating income for the first quarter of
2004 over the same period last year," commented Martin R. Benante,
Chairman and CEO of Curtiss-Wright Corporation. "Our strong
performance is due to our diversification strategy and growth in
our core markets, particularly defense, specifically defense
electronics, and in our metal treatment segment, specifically laser
and shot peening. We successfully increased sales and earnings,
despite a slowdown in some of our markets, due to our ability to
deliver to our customers the high performance, technologically
advanced products for which Curtiss-Wright is world renowned."
Sales The 19% improvement in sales for the first quarter 2004
compared to the prior year period resulted from solid organic
growth and the contributions of $29.6 million in incremental sales
from our 2003 and 2004 acquisitions. Excluding the contributions
from the acquisitions consummated in 2003 and 2004, we experienced
4% overall organic growth in the first quarter of 2004 over the
prior year period. We experienced organic growth of 17% in our
Metal Treatment segment and 10% in our Motion Control segment,
partially offset by an overall decrease in the Flow Control segment
sales due to the shipment of two large completed projects in the
first quarter of 2003 that did not reoccur in 2004. In our base
businesses, higher sales from our military aerospace and domestic
ground defense businesses, higher sales of flow control products to
the commercial power generation and the nuclear navy markets, and
higher sales from our laser peening and global shot peening
businesses, all contributed to the organic growth. In addition,
foreign currency translation favorably impacted sales for the first
quarter of 2004 by $4.8 million as compared to the prior year
period. Operating Income Operating income for the first quarter
2004 increased 6% over 2003 due to higher sales volumes and a
favorable sales mix. We experienced organic growth of 51% in our
Metal Treatment segment and 39% in our Motion Control segment,
offset by an overall decrease in the Flow Control segment due to
the margin related to the two large completed projects in the first
quarter of 2003 that did not reoccur in 2004. This increase was
partially offset by lower volume for our European ground defense
business and lower pension income. Net Earnings Net earnings for
the first quarter of 2004 year increased 11% over the comparable
prior year period, highlighted by strong operating income from our
business segments, which increased $2.1 million. The net earnings
for the first quarter include a one-time tax benefit of $1.5
million resulting from a change in legal structure of one of our
subsidiaries. These improvements were partially offset by higher
interest expense associated with the debt incurred for our
acquisition program. Overall, Curtiss-Wright achieved strong growth
in the military aerospace, domestic land-based military, commercial
power generation, and laser and shot peening markets. Additionally
Curtiss-Wright achieved growth during the first quarter of 2004 in
oil and gas processing and certain industrial markets, despite the
sluggish performance of these markets overall. "Our position on
many key defense programs, which include a mix of high performance
products for aerospace, land-based and naval platforms, produced
17% higher sales in the first quarter of 2004 as compared to the
comparable prior year period, and should continue to provide
opportunities for us in the future," said Mr. Benante. "Our
balanced blend of defense and commercial businesses is expected to
continue to provide both short and long-term benefits to our
shareholders. In addition, our recent acquisitions have achieved
better-than-expected results while increasing our market
penetration, particularly within the defense electronics sector,
and expanded our geographic reach and technological capabilities."
Segment Performance Flow Control -- Sales for the first quarter of
2004 were $89.4 million, down 4% over the comparable period last
year. Lower overall sales were mainly due to the completion in 2003
of two large projects, which did not reoccur in 2004. These
projects generated approximately $14 million in sales in the first
quarter of 2003. The loss of sales from these two large projects
was partially offset by a 12% increase in sales for this segment's
remaining businesses over the comparable prior year period. Higher
sales to the commercial power generation market, higher sales of
flow control and electronic products to the nuclear naval market
and higher sales of our coke de-heading valve to the oil and gas
industry partially offset the decrease in sales resulting from the
aforementioned projects. Sales of this business segment also
benefited from favorable foreign currency translation of $0.8
million in the first quarter of 2004 as compared to the prior year
period. Operating income for this segment decreased 27% in the
first quarter of 2004 compared to the prior year period. The
reduction was primarily due to lower volume and the profit impact
related to the two large higher margin contracts in the first
quarter of 2003 that did not reoccur in 2004. The loss in operating
income from these two large projects was partially offset by a 6%
increase in operating income for this segment's remaining
businesses over the comparable prior year period. Also contributing
to the lower operating income was less favorable sales mix of
electronic components and lower margin on certain valve orders for
the nuclear navy. Operating income improvements for our commercial
power generation and oil and gas products were due to higher volume
and stronger sales mix. Motion Control -- Sales of $83.3 million
for the first quarter of 2004 increased 46% over last year,
principally due to the contributions from the 2003 and 2004
acquisitions, and 10% organic sales growth. The organic sales
growth was driven mainly by an increase in sales of military
aerospace products for F-16 spares, F/A-22 production and Joint
Strike Fighter development. In addition, this segment experienced
higher electronic sales for the Global Hawk program and slightly
higher domestic land-based military and European sensor and drive
sales. These higher sales were partially offset by lower European
ground defense sales resulting from expedited delivery schedules in
2003 and lower sales associated with the overhaul and repair
services provided to the global airline industry. Sales of this
business segment also benefited from favorable foreign currency
translation of $2.1 million in the first quarter of 2004 as
compared to the prior year period. Operating income for this
segment increased 63% for the first quarter of 2004 compared to the
prior year period. The improvement was driven by higher sales
volume as mentioned above, favorable sales mix on various military
programs, and cost controls. These improvements were partially
offset by lower margins at our European ground defense business.
Additionally, the operating margins for the overhaul and repair
business improved slightly over the comparable period last year,
mainly as a result of implemented cost control initiatives. Metal
Treatment -- Sales for the first quarter of 2004 of $42.2 million
were 43% higher than the comparable period last year. The
improvement was mainly due to organic growth of 17% driven by
higher overall shot peening revenues and the contributions from the
2003 and 2004 acquisitions. The improvement in shot peening revenue
was due to exceptional sales growth from our new laser peening
technology as well as strong growth in our core shot peening
services in both North America and Europe. Favorable foreign
currency translation positively impacted sales by $2.0 million in
the first quarter of 2004 as compared to the prior year period.
Operating income increased 75% for the first quarter of 2004 as
compared to the first quarter last year. Margins improved
substantially in our shot peening businesses primarily as a result
of higher sales volume. In addition, favorable sales mix, cost
reduction programs, and favorable foreign currency translation also
contributed to the higher operating income. Mr. Benante concluded,
"We begin the year 2004 confident in our ability to generate
long-term shareholder value by continuing to grow our sales and
earnings. Although 2004 is likely to be challenging, our first
quarter results were better-than-expected and exemplify our ability
to execute our strategy and achieve our financial targets. Our
diversification and growth strategy and keen focus on technology
will continue to generate growth opportunities in each of our three
business segments. We look forward to generating another strong
performance in 2004 and to providing our investors with superior
returns." The Company will host a conference call to discuss the
first quarter 2004 results at 10:00 EDT Friday, April 30, 2004. 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 March 31, Change 2004
2003 $ % Net sales $214,933 $179,933 $35,000 19.45% Cost of sales
143,338 120,901 22,437 18.56% Gross profit 71,595 59,032 12,563
21.28% Research & development expenses 8,212 5,305 2,907 54.80%
Selling expenses 12,604 8,968 3,636 40.54% General and
administrative expenses 25,249 21,414 3,835 17.91% Environmental
remediation and administrative expenses, net 240 0 240 N/A Pension
expense (income), net 40 (525) 565 -107.62% Operating income 25,250
23,870 1,380 5.78% Other income (expenses), net (489) (242) (247)
102.07% Interest expense (2,265) (851) (1,414) 166.16% Earnings
before income taxes 22,496 22,777 (281) -1.23% Provision for income
taxes 6,887 8,655 (1,768) -20.43% Net earnings $15,609 $14,122
$1,487 10.53% Basic earnings per share $0.75 $0.69 Diluted earnings
per share $0.74 $0.68 Dividends per share $0.09 $0.08 Weighted
average shares outstanding: Basic 20,881 20,564 Diluted 21,206
20,816 Share and per share amounts have been restated to reflect
the Corporation's 2-for-1 stock split on December 17, 2003. Certain
prior year information has been reclassified to conform to current
presentation. CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31,
Change 2004 2003 $ % Assets Current Assets: Cash and cash
equivalents $33,322 $98,672 $(65,350) -66.2% Receivables, net
164,137 143,362 20,775 14.5% Inventories, net 104,929 97,880 7,049
7.2% Deferred income taxes 24,377 23,630 747 3.2% Other current
assets 12,661 10,979 1,682 15.3% Total current assets 339,426
374,523 (35,097) -9.4% Property, plant, and equipment, net 246,301
238,139 8,162 3.4% Prepaid pension costs 77,861 77,877 (16) 0.0%
Goodwill, net 284,217 220,058 64,159 29.2% Other intangible assets,
net 78,829 48,268 30,561 63.3% Other assets 19,431 14,800 4,631
31.3% Total Assets $1,046,065 $973,665 $72,400 7.4% Liabilities
Current Liabilities: Short-term debt $1,034 $997 $37 3.7% Accounts
payable 47,630 43,776 3,854 8.8% Accrued expenses 39,966 44,938
(4,972) -11.1% Income taxes payable 10,756 6,748 4,008 59.4% Other
current liabilities 35,890 39,424 (3,534) -9.0% Total current
liabilities 135,276 135,883 (607) -0.4% Long-term debt 276,508
224,151 52,357 23.4% Deferred income taxes 20,660 21,798 (1,138)
-5.2% Accrued pension & other postretirement benefit costs
76,340 75,633 707 0.9% Long-term portion of environmental reserves
20,564 21,083 (519) -2.5% Other liabilities 19,829 16,236 3,593
22.1% Total Liabilities 549,177 494,784 54,393 11.0% Stockholders'
Equity Common stock, $1 par value 16,611 16,611 0 0.0% Class B
common stock, $1 par value 8,765 8,765 0 0.0% Capital surplus
49,698 52,998 (3,300) -6.2% Retained earnings 557,390 543,670
13,720 2.5% Unearned portion of restricted stock (50) (55) 5 -9.1%
Accumulated other comprehensive income 23,387 22,634 753 3.3%
655,801 644,623 11,178 1.7% Less: cost of treasury stock 158,913
165,742 (6,829) -4.1% Total Stockholders' Equity 496,888 478,881
18,007 3.8% Total Liabilities and Stockholders' Equity $1,046,065
$973,665 $72,400 7.4% Certain prior year information has been
reclassified to conform to current presentation. CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES SEGMENT INFORMATION (In thousands)
Three Months Ended March 31, % 2004 2003 Change Sales: Flow Control
$89,395 $93,341 -4.2% Motion Control 83,344 57,040 46.1% Metal
Treatment 42,194 29,552 42.8% Total Sales $214,933 $179,933 19.5%
Operating Income: Flow Control $10,431 $14,318 -27.1% Motion
Control 8,289 5,090 62.8% Metal Treatment 6,577 3,751 75.3% Total
Segments 25,297 23,159 9.2% Pension Income (40) 525 -107.6%
Corporate & Other (7) 186 -103.8% Total Operating Income
$25,250 $23,870 5.8% Operating Margins: Flow Control 11.7% 15.3%
Motion Control 9.9% 8.9% Metal Treatment 15.6% 12.7% Total
Curtiss-Wright 11.7% 13.3% 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
4,900 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, 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 Magnuson of the Curtiss-Wright
Corporation, +1-973-597-4734, Web site:
http://www.curtisswright.com/
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