Curtiss-Wright Reports 2004 Second Quarter and Six Month Financial
Results Sales Increased 22% and 21% and Operating Income 43% &
22% in the Second Quarter and First Half of 2004, Respectively
ROSELAND, N.J., July 29 /PRNewswire-FirstCall/ -- Curtiss-Wright
Corporation (NYSE:CWNYSE:CW.B) today announced financial results
for the second quarter and six months ended June 30, 2004. The
highlights for the periods are as follows: Second Quarter 2004
Operating Highlights * Net sales for the second quarter of 2004
increased 22% to $222.4 million from $182.9 million in the second
quarter of 2003. Acquisitions made in the second half of 2003 and
in 2004 contributed $30.2 million in incremental sales in the
second quarter of 2004. * Operating income in the second quarter of
2004 increased 43% to $25.6 million from $18.0 million in the
second quarter of 2003. Acquisitions made in the second half of
2003 and in 2004 contributed $2.7 million in incremental operating
income in the second quarter of 2004. The increase in operating
income was achieved despite a $0.6 million decrease in pension
income from the second quarter of 2003. * Net earnings for the
second quarter of 2004 increased 32% to $14.3 million, or $0.67 per
diluted share, from $10.9 million, or $0.52 per diluted share, in
the second quarter of 2003 (adjusted for the 2-for-1 stock split in
December 2003). The increase in 2004 second quarter net earnings
was achieved despite a $2.1 million increase in interest expense
(approximately $0.06 per diluted share). * New orders received in
the second quarter of 2004 were $208.1 million, up 12% compared to
the second quarter of 2003. Six Months 2004 Operating Highlights *
Net sales for the first six months of 2004 increased 21% to $437.4
million from $362.8 million in the first six months of 2003.
Acquisitions made in 2003 and 2004 contributed $58.4 million in
incremental sales in the first six months of 2004. * Operating
income in the first six months of 2004 increased 22% to $50.9
million from $41.8 million in the first six months of 2003.
Acquisitions made in 2003 and 2004 contributed $5.1 million in
incremental operating income in the first six months of 2004. The
increase in operating income was achieved despite a $1.1 million
decrease in pension income from the first six months of 2003. * Net
earnings for the first six months of 2004 increased 20% to $29.9
million, or $1.40 per diluted share, from $25.0 million, or $1.20
per diluted share, in the first six months of 2003 (adjusted for
the 2-for- 1 stock split in December 2003). In addition, the
increase in 2004 net earnings was achieved despite a $3.5 million
increase in interest expense (approximately $0.10 per diluted
share). * New orders received in the first six months of 2004 were
$443.5 million, up 13% compared to the first six months of 2003.
Backlog increased 11% to a new record high of $559.4 million from
$505.5 million at December 31, 2003. "We are pleased to again
report higher sales and operating income for the second quarter and
first half of 2004," commented Martin R. Benante, Chairman and CEO
of Curtiss-Wright Corporation. "We continue to grow operating
income faster than sales, which demonstrates our ability to
successfully integrate acquisitions while continuing to grow our
base businesses. Our diversification strategy has provided growth
in the first half of 2004 for both our core defense markets, which
grew 21%, and commercial and industrial markets, which grew 20%,
over the prior year period." Sales Sales growth in 2004 for the
three and six months ended June 30th as compared to 2003, was
driven by contributions from acquisitions and organic growth in
some of our base businesses. Acquisitions made in 2003 and 2004
have contributed $30.2 million and $58.4 million in incremental
sales for the quarter and six months ended June 30, 2004,
respectively, over the comparable periods in 2003. Excluding the
contribution from these acquisitions, we experienced overall
organic growth of 5% and 4% for the three and six months ended June
30, 2004, respectively, over the prior year periods. The organic
sales growth was driven by our Metal Treatment and Motion Control
segments, which experienced organic growth of 19% and 9%,
respectively, for the first six months of 2004. In our base
businesses, higher sales from our Motion Control segment to the
military aerospace market, higher sales from our Flow Control
segment to the commercial power generation and oil and gas
processing markets, and higher sales of global shot and laser
peening by our Metal Treatment segment, all contributed to the
organic growth. In addition, foreign currency translation favorably
impacted sales by $3.1 million and $7.7 million for the three and
six months ended June 30, 2004, respectively, compared to the prior
year periods. Operating Income Operating income for the three and
six months ended June 30, 2004 increased 43% and 22%, respectively,
over the 2003 prior year periods. The increases were due to higher
sales volumes, favorable sales mix and previously implemented cost
control initiatives. Overall, organic growth was 31% and 13% for
the three and six months ended June 30, 2004, respectively,
compared to the prior year periods. The strong year-to-date
performance of our Motion Control and Metal Treatment segments was
slightly offset by a decrease in the Flow Control segment. The
higher segment operating income was partially offset by lower
pension income of $0.6 million and $1.1 million for the three and
six months ended June 30, 2004, respectively, over the comparable
prior year periods. In addition, foreign currency translation
favorably impacted operating income by $0.5 million and $1.2
million for the three and six months ended June 30, 2004,
respectively, compared to the prior year periods. Net Earnings Net
earnings increased 32% and 20% for the three and six months ended
June 30, 2004, respectively, over the comparable prior year
periods. This was achieved by strong operating income from our
business segments, which increased $8.6 million and $10.7 million
over the prior year periods. Curtiss-Wright achieved strong growth
in the military aerospace, commercial power generation, and laser
and shot peening markets. Additionally Curtiss- Wright achieved
growth during the first six months of 2004 in oil and gas
processing, commercial repair and overhaul and certain industrial
markets, despite the continued softness in these markets overall.
Net earnings for the first six months 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
to fund our acquisition program and from higher interest rates.
Segment Performance Flow Control -- Sales for the second quarter of
2004 were $86.2 million, up 1% over the comparable period last
year. Sales growth was achieved in the commercial power generation,
oil and gas processing, and defense electronics markets. This
growth was mostly offset by lower sales of flow control products to
the US Navy primarily due to the timing of contractual revenues.
Sales of this business segment also benefited from favorable
foreign currency translation of $0.4 million in the second quarter
of 2004 as compared to the prior year period. Operating income for
this segment increased 1% in the second quarter of 2004 compared to
the prior year period. Despite the profit impact related to lower
flow control product sales to the US Navy, we achieved strong
growth in this segment's other businesses. Higher volume and
stronger sales mix for our commercial power generation and oil and
gas products, and higher volumes for our electronic products to the
US Navy were the drivers of this increase. Motion Control -- Sales
of $91.6 million for the second quarter of 2004 increased 50% over
last year, principally due to the contributions from the 2003 and
2004 acquisitions, and 8% organic sales growth. The organic growth
was driven mainly by an increase in sales of military aerospace
products for F/A-22 and V-22 production, F/A-22 spares, and the
Joint Strike Fighter development. In addition, this segment
experienced higher electronic sales for the 767 Refueler program
and higher sales associated with the repair and overhaul services
provided to the global airline industry. Sales of this business
segment also benefited from favorable foreign currency translation
of $1.7 million in the second quarter of 2004 as compared to the
prior year period. Operating income for this segment increased 144%
for the second quarter of 2004 compared to the prior year period.
The improvement was driven by higher sales volume previously
mentioned, favorable sales mix on various military programs, and
implemented cost control initiatives. Additionally, the operating
margins for the repair and overhaul business improved slightly over
the comparable period last year, mainly as a result of implemented
cost control initiatives. Metal Treatment -- Sales for the second
quarter of 2004 of $44.6 million were 23% higher than the
comparable period last year. The improvement was mainly due to
organic growth of 19% driven by higher overall laser and shot
peening revenues, and the contributions from the 2004 acquisitions.
We achieved exceptional sales growth from our new laser peening
technology as well as strong growth in our global shot peening
businesses. Favorable foreign currency translation positively
impacted sales by $1.1 million in the second quarter of 2004 as
compared to the prior year period. Operating income increased 51%
for the second quarter of 2004 as compared to the prior year
period. Margins improved substantially in our shot peening
businesses primarily as a result of higher sales volume, especially
for our higher margin laser peening sales. In addition, favorable
sales mix, cost reduction programs, and favorable foreign currency
translation also contributed to the higher operating income. Mr.
Benante concluded, "In 2004, we continue to demonstrate our ability
to generate long-term shareholder value by growing our sales and
earnings. We successfully increased sales and earnings due to our
diversification and ability to deliver the high performance,
technologically advanced products for which Curtiss-Wright is world
renowned. Our strong performance in the first half of 2004
exemplifies our ability to execute our strategy and achieve our
financial targets. We expect the second half of 2004 to be even
stronger, which will continue to provide opportunities to generate
growth in each of our three business segments. We look forward to
providing our investors with superior returns in 2004." The Company
will host a conference call to discuss the second quarter 2004
results at 10:00 EDT Friday, July 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 Six Months Ended June 30, June 30, 2004
2003 2004 2003 Net sales $222,428 $182,857 $437,361 $362,790 Cost
of sales 146,406 126,175 289,744 247,076 Gross profit 76,022 56,682
147,617 115,714 Research & development expenses 7,754 5,772
15,966 11,077 Selling expenses 14,743 10,307 27,347 19,275 General
and administrative expenses 27,789 23,166 53,038 44,580
Environmental remediation and administrative expenses, net 51 - 291
- Pension expense (income), net 42 (528) 82 (1,053) Operating
income 25,643 17,965 50,893 41,835 Other income (expenses), net 293
515 (196) 273 Interest expense (3,018) (942) (5,283) (1,793)
Earnings before income taxes 22,918 17,538 45,414 40,315 Provision
for income taxes 8,594 6,665 15,481 15,320 Net earnings $14,324
$10,873 $29,933 $24,995 Basic earnings per share $0.68 $0.53 $1.42
$1.21 Diluted earnings per share $0.67 $0.52 $1.40 $1.20 Dividends
per share $0.09 $0.08 $0.18 $0.15 Weighted average shares
outstanding: Basic 21,136 20,602 21,013 20,584 Diluted 21,460
20,862 21,330 20,834 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (In thousands, except per share
data) Three Months Six Months Change Change $ % $ % Net sales
$39,571 21.64% $74,571 20.55% Cost of sales 20,231 16.03% 42,668
17.27% Gross profit 19,340 34.12% 31,903 27.57% Research &
development expenses 1,982 34.34% 4,889 44.14% Selling expenses
4,436 43.04% 8,072 41.88% General and administrative expenses 4,623
19.96% 8,458 18.97% Environmental remediation and administrative
expenses, net 51 N/A 291 N/A Pension expense (income), net 570
-107.95% 1,135 -107.79% Operating income 7,678 42.74% 9,058 21.65%
Other income (expenses), net (222) -43.11% (469) -171.79% Interest
expense (2,076) 220.38% (3,490) 194.65% Earnings before income
taxes 5,380 30.68% 5,099 12.65% Provision for income taxes 1,929
28.95% 161 1.05% Net earnings $3,451 31.74% $4,938 19.75% 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) June 30, December 31,
Change 2004 2003 $ % Assets Current Assets: Cash and cash
equivalents $36,830 $98,672 $(61,842) -62.7% Receivables, net
174,538 143,362 31,176 21.7% Inventories, net 114,769 97,880 16,889
17.3% Deferred income taxes 24,269 23,630 639 2.7% Other current
assets 13,660 10,979 2,681 24.4% Total current assets 364,066
374,523 (10,457) -2.8% Property, plant, and equipment, net 248,496
238,139 10,357 4.3% Prepaid pension costs 77,845 77,877 (32) 0.0%
Goodwill, net 316,114 220,058 96,056 43.7% Other intangible assets,
net 95,010 48,268 46,742 96.8% Other assets 15,956 14,800 1,156
7.8% Total Assets $1,117,487 $973,665 $143,822 14.8% Liabilities
Current Liabilities: Short-term debt $1,002 $997 $5 0.5% Accounts
payable 56,551 43,776 12,775 29.2% Accrued expenses 49,144 44,938
4,206 9.4% Income taxes payable 5,229 6,748 (1,519) -22.5% Other
current liabilities 43,486 39,424 4,062 10.3% Total current
liabilities 155,412 135,883 19,529 14.4% Long-term debt 300,999
224,151 76,848 34.3% Deferred income taxes 20,318 21,798 (1,480)
-6.8% Accrued pension & other postretirement benefit costs
77,566 75,633 1,933 2.6% Long-term portion of environmental
reserves 19,774 21,083 (1,309) -6.2% Other liabilities 20,860
16,236 4,624 28.5% Total Liabilities 594,929 494,784 100,145 20.2%
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 51,522 52,998 (1,476) -2.8% Retained earnings 569,792
543,670 26,122 4.8% Unearned portion of restricted stock (45) (55)
10 -18.9% Accumulated other comprehensive income 22,219 22,634
(415) -1.8% 668,864 644,623 24,241 3.8% Less: cost of treasury
stock 146,306 165,742 (19,436) -11.7% Total Stockholders' Equity
522,558 478,881 43,677 9.1% Total Liabilities and Stockholders'
Equity $1,117,487 $973,665 $143,822 14.8% CURTISS-WRIGHT
CORPORATION and SUBSIDIARIES SEGMENT INFORMATION (In thousands)
Three Months Ended Six Months Ended June 30, June 30, % % 2004 2003
Change 2004 2003 Change Sales: Flow Control $86,205 $85,617 0.7%
$175,600 $178,958 -1.9% Motion Control 91,578 60,984 50.2% 174,922
118,024 48.2% Metal Treatment 44,645 36,256 23.1% 86,839 65,808
32.0% Total Sales $222,428 $182,857 21.6% $437,361 $362,790 20.6%
Operating Income: Flow Control $8,846 $8,748 1.1% $19,277 $23,066
-16.4% Motion Control 10,012 4,107 143.8% 18,301 9,197 99.0% Metal
Treatment 7,577 5,030 50.6% 14,154 8,781 61.2% Total Segments
26,435 17,885 47.8% 51,732 41,044 26.0% Pension Income (42) 528
-108.0% (82) 1,053 -107.8% Corporate & Other (750) (448) 67.4%
(757) (262) 188.9% Total Operating Income $25,643 $17,965 42.7%
$50,893 $41,835 21.7% Operating Margins: Flow Control 10.3% 10.2%
11.0% 12.9% Motion Control 10.9% 6.7% 10.5% 7.8% Metal Treatment
17.0% 13.9% 16.3% 13.3% Total Curtiss-Wright 11.5% 9.8% 11.6% 11.5%
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 5,100 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 Deignan of
Curtiss-Wright Corporation, +1-973-597-4734, Web site:
http://www.curtisswright.com/
Copyright