10-KPeriod: FY2000

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2000

Filed March 19, 2001For Securities:CW

Summary

Curtiss-Wright Corporation's 2000 10-K filing reveals a significant corporate restructuring event: a proposed recapitalization to facilitate a tax-free distribution of company shares held by Unitrin, Inc. This recapitalization will introduce a Class B common stock, granting Unitrin's shareholders voting rights for at least 80% of the board, while existing shareholders retain their common stock with rights to elect the remaining directors. The company operates across three segments: Motion Control, Metal Treatment, and Flow Control, serving diverse industries including aerospace, defense, automotive, and power generation. Financially, the company is positioned with a solid market capitalization, though specific financial performance metrics for 2000 are largely incorporated by reference into the Annual Report to Stockholders. The filing also highlights the company's exposure to market risks, particularly interest rate and foreign currency fluctuations, and its strategies for mitigation. Significant customer relationships exist, especially with The Boeing Company in the Motion Control segment and the U.S. Navy in the Flow Control segment, with a notable dependence on Bechtel Group, Inc. for a substantial portion of the Flow Control backlog.

Key Highlights

  • 1Significant corporate restructuring proposed involving a recapitalization to allow Unitrin, Inc. to distribute its stake in Curtiss-Wright to its own shareholders, introducing Class B common stock with enhanced board representation rights.
  • 2Operations are organized into three distinct segments: Motion Control (aerospace actuation systems), Metal Treatment (shot-peening, heat treating), and Flow Control (engineered valves for nuclear and power generation).
  • 3The Motion Control segment is heavily reliant on major customers like Boeing and U.S. Government sales, with a substantial portion of its backlog expected to be shipped in the near term.
  • 4The Flow Control segment's backlog is significantly tied to U.S. Navy contracts via prime contractor Bechtel Group, Inc., representing 19% of gross sales in 2000.
  • 5The company faces competition across all segments, often from larger competitors with broader product lines and resources, with competition based on engineering, quality, delivery, and price.
  • 6Curtiss-Wright is exposed to market risks, including interest rate and foreign currency fluctuations, which it aims to manage through operational activities and derivative instruments.
  • 7Research and development expenditures increased significantly from 1999 to 2000, indicating investment in future product development.

Frequently Asked Questions

Curtiss-Wright is proposing a recapitalization to enable Unitrin, Inc. to distribute its shares. This will involve creating a Class B common stock. Unitrin's shareholders will receive Class B shares, which will grant them the right to elect at least 80% of the board. Existing shareholders will retain their common stock and will elect the remaining board members. All other rights, including voting on fundamental transactions, will be identical between the two classes of stock.

The Motion Control segment is significantly dependent on sales to The Boeing Company and U.S. Government contracts. The Flow Control segment has a substantial portion of its backlog tied to U.S. Navy contracts through Bechtel Group, Inc., which accounted for 19% of gross sales in 2000. The loss of these key customers could have a material adverse effect on the respective segments.

Curtiss-Wright is exposed to market risks primarily from changes in interest rates and foreign currency exchange rates. The company seeks to minimize these risks through its normal operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. They do not use these instruments for trading or speculative purposes.

Research and development expenditures have increased steadily. They were $1.346 million in 1998, rose to $2.801 million in 1999, and further increased to $3.443 million in 2000, indicating an ongoing investment in innovation and development.