10-KPeriod: FY2004

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2004

Filed March 16, 2005For Securities:CW

Summary

Curtiss-Wright Corporation's 2004 Form 10-K filing indicates a diversified industrial conglomerate with a significant focus on defense and aerospace markets, operating across three main segments: Flow Control, Motion Control, and Metal Treatment. The company's revenue is substantially driven by government contracts, particularly with the U.S. Navy, accounting for approximately 47% of total revenues. This reliance on government spending presents both opportunities and risks, including potential impacts from defense budget changes and contract terminations. The company's strategic focus includes growth through acquisitions, as evidenced by recent acquisitions in the Flow Control and Motion Control segments. Curtiss-Wright is also investing in technological advancements, such as laser peening in its Metal Treatment segment, and is positioning itself for future opportunities like the Joint Strike Fighter program. While the company emphasizes its engineered products and services, investors should be aware of the inherent risks associated with government contracting, competitive markets, potential supply chain dependencies, and the integration of acquired businesses.

Key Highlights

  • 1Diversified operations across Flow Control, Motion Control, and Metal Treatment segments.
  • 2Significant revenue dependence (47%) on U.S. Government contracts, with a large portion attributed to the U.S. Navy.
  • 3Strategic growth through acquisitions, with recent examples in Flow Control and Motion Control segments.
  • 4Investment in advanced technologies like laser peening for enhanced metal treatment.
  • 5Exposure to aerospace and defense markets, including participation in key programs like the Joint Strike Fighter.
  • 6Acknowledged risks include U.S. Government spending changes, contract terminations, and competitive pressures.
  • 7Company is actively managing foreign currency exchange rate volatility and potential political risks in international operations.

Frequently Asked Questions

Curtiss-Wright's revenue is significantly driven by its three segments: Flow Control, Motion Control, and Metal Treatment. A substantial portion of its revenue (approximately 47% in 2004) comes from government contracts, particularly with the U.S. government and the U.S. Navy. The company also has exposure to the commercial aerospace, defense, and industrial equipment markets.

Key risks include the company's heavy reliance on U.S. Government spending, which can be subject to budget changes, contract modifications, or terminations. Other risks include competition from larger entities, the dependency on sole-source suppliers, the successful integration of acquired businesses, and potential impacts from foreign currency fluctuations and international political risks.

Curtiss-Wright's growth strategy involves a combination of organic growth and strategic acquisitions. The company has made recent acquisitions to expand its capabilities in the Flow Control and Motion Control segments and is actively seeking further opportunities to enter new markets or strengthen its position in existing ones.

Curtiss-Wright acknowledges ongoing environmental compliance costs and potential liabilities from past and present operations, including investigation and remediation activities. The company also mentions being named in asbestos litigation but believes its limited use of asbestos and the condition of its products make material liability unlikely, and it maintains insurance coverage.