10-KPeriod: FY2007

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2007

Filed February 27, 2008For Securities:CW

Summary

Curtiss-Wright Corporation (CW) demonstrated robust financial performance in 2007, marked by significant growth in net sales and net earnings compared to the previous year. Net sales increased by approximately 24%, reaching $1.59 billion, while net earnings saw a substantial rise of nearly 30% to $104.3 million. This growth was driven by strategic acquisitions and strong performance across its diverse industrial segments, including Flow Control, Motion Control, and Metal Treatment. The company's balance sheet reflects a significant increase in total assets, largely due to substantial goodwill and other intangible assets arising from acquisitions, indicating an aggressive growth strategy. While long-term debt increased to fund these acquisitions, the company maintained a healthy debt-to-capitalization ratio, well within its covenants. Investors should note the increased investments in property, plant, and equipment, alongside continued research and development, underscoring a commitment to future growth and innovation.

Key Highlights

  • 1Net sales increased by 24.2% to $1.59 billion in 2007 from $1.28 billion in 2006.
  • 2Net earnings grew by 29.5% to $104.3 million in 2007, up from $80.6 million in 2006.
  • 3Diluted Earnings Per Share (EPS) rose to $2.32 in 2007 from $1.82 in 2006.
  • 4The company completed four acquisitions in 2007, significantly expanding its asset base and goodwill.
  • 5Total assets grew from $1.59 billion in 2006 to $1.99 billion in 2007, driven by acquisitions.
  • 6Long-term debt increased substantially from $359 million to $511 million, primarily to finance acquisitions.
  • 7Cash provided by operating activities remained strong at $139.1 million in 2007, although slightly down from $143.9 million in 2006.

Frequently Asked Questions

Revenue and earnings growth in 2007 were primarily driven by a combination of organic growth across its key industrial segments (Flow Control, Motion Control, and Metal Treatment) and the strategic acquisition of four new businesses. These acquisitions significantly expanded the company's operational footprint and product/service offerings.

The company primarily financed its 2007 acquisitions through a combination of its revolving credit facility and existing cash. This led to a notable increase in its long-term debt, which rose from $359 million to $511 million.

The substantial increase in Goodwill and other intangible assets, from $570.4 million in 2006 to $811.3 million in 2007 (sum of Goodwill and Other Intangible Assets), is a direct result of the company's aggressive acquisition strategy. This indicates that Curtiss-Wright has been actively pursuing growth through acquiring other businesses, paying a premium over the fair value of their net tangible and intangible assets.

The company increased its capital expenditures in 2007 to $54.4 million from $40.2 million in 2006, indicating ongoing investment in its facilities and equipment. Research and development costs also increased to $47.9 million in 2007 from $38.8 million in 2006, showing a continued focus on innovation and new product development to support future growth.