10-KPeriod: FY2002

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2002

Filed March 31, 2003For Securities:CW

Summary

Curtiss-Wright Corporation's 2002 Form 10-K outlines a diversified industrial company operating across three key segments: Motion Control, Flow Control, and Metal Treatment. The company demonstrates a strategic focus on both organic growth, evidenced by R&D investments and new product development, and inorganic growth through strategic acquisitions in its core segments. These acquisitions, particularly in 2002, expanded its capabilities and market reach within aerospace, defense, and industrial sectors. Financially, the company appears to be navigating a period of growth, with increasing government sales contributing significantly to segment performance, especially in Motion Control and Flow Control. Management's discussion of results highlights the impact of these acquisitions and the ongoing efforts to integrate them. Investors should note the significant reliance of certain segments on specific large customers, such as Boeing in Motion Control and Bechtel in Flow Control, which presents a degree of customer concentration risk. The company also emphasizes its compliance with environmental regulations and its proactive management of controls and procedures.

Key Highlights

  • 1Curtiss-Wright operates through three primary segments: Motion Control, Flow Control, and Metal Treatment, serving diverse industries including aerospace, defense, and industrial equipment.
  • 2Significant strategic acquisitions were made in 2002, notably in the Motion Control and Flow Control segments, to expand product lines and market presence.
  • 3Government sales, both direct and indirect, represent a growing portion of consolidated sales, increasing from 17% in 2000 to 39% in 2002.
  • 4The Motion Control segment shows a significant customer concentration risk, with sales to Boeing accounting for 15% in 2002 (down from 32% in 2001), and a material adverse effect if lost.
  • 5The Flow Control segment has a substantial backlog increase, with approximately 33% comprised of orders from Bechtel Plant Machinery, Inc., highlighting customer concentration.
  • 6Research and development expenditures saw a notable increase in 2002, rising to $11.6 million from $4.4 million in 2001, indicating investment in future growth.
  • 7The company has relocated its corporate headquarters to Roseland, NJ, in early 2003.

Frequently Asked Questions

Curtiss-Wright's primary business segments are Motion Control, Flow Control, and Metal Treatment. The filing indicates that Motion Control and Flow Control segments saw increased government sales, contributing significantly to their performance. The Metal Treatment segment also expanded its network of facilities. While detailed financial performance metrics for each segment are incorporated by reference into the Annual Report, the 10-K highlights strategic acquisitions and backlog developments within these segments.

Yes, the company has notable customer concentration in certain segments. For the Motion Control segment, sales to Boeing accounted for 15% of segment sales in 2002, down from 32% in 2001, and a loss of this customer would have a material adverse effect. In the Flow Control segment, approximately 33% of the backlog is from Bechtel Plant Machinery, Inc., and a loss of this customer would also have a material adverse effect on the segment.

Curtiss-Wright pursues growth through both organic means, such as R&D investments and new product development (evidenced by increased R&D spending in 2002), and inorganic growth via strategic acquisitions. The filing details several acquisitions in 2002 across its key segments. Information regarding the specific funding of these activities, including debt and credit facilities, is detailed in the incorporated financial statements and Management's Discussion and Analysis.

Government contracts are increasingly significant. Direct sales to the U.S. Government and sales for U.S. and foreign government end-use averaged about 29% of consolidated sales from 2000-2002. This percentage rose notably to 39% in 2002, driven by recent acquisitions, and is expected to increase slightly in 2003, particularly within the Motion Control and Flow Control segments.