10-KPeriod: FY2011

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2011

Filed February 24, 2012For Securities:CW

Summary

Curtiss-Wright Corporation's 2011 10-K filing highlights a strong year with a 9% increase in sales, reaching $2.05 billion, driven by growth across all three segments: Flow Control, Motion Control, and Metal Treatment. The company's diversified portfolio, with a significant portion of revenue derived from defense and commercial aerospace, contributed to a 22% increase in net earnings to $130.4 million. Strategic acquisitions throughout the year bolstered performance, particularly in the Metal Treatment segment, which saw a 28% sales increase. The company maintained a robust backlog of $1.7 billion, indicating continued demand for its highly engineered products and services. Management is focused on organic growth supplemented by strategic acquisitions. The defense sector, representing approximately 40% of revenues, is navigating a period of expected moderation in government spending, but demand for C4ISR and unmanned systems remains strong. The commercial markets, particularly commercial aerospace and power generation, are experiencing solid growth, driven by increased aircraft production and the need for nuclear power plant maintenance and upgrades. The company's financial position remains strong, with significant operating cash flow and available credit, supporting ongoing investment in capital expenditures and strategic initiatives.

Financial Highlights

57 data points
Beta

Revenue

$2.02B

32.6% Gross Margin

Net Income

$126.39M

6.3% Net Margin

EPS (Diluted)

$2.69

Total Assets

$2.64B

Cash & Equivalents

$194.39M

Free Cash Flow

$117.53M

Financial Statements
Beta
Revenue$2.02B
Cost of Revenue$1.36B
Gross Profit$656.95M
R&D Expenses$62.12M
Operating Income$186.85M
Interest Expense$20.83M
Net Income$126.39M
EPS (Basic)$2.73
EPS (Diluted)$2.69
Shares Outstanding (Basic)46.37M
Shares Outstanding (Diluted)47.01M

Key Highlights

  • 1Total sales increased by 9% to $2.05 billion in 2011, driven by growth across all segments.
  • 2Net earnings rose by 22% to $130.4 million, demonstrating improved profitability.
  • 3The Metal Treatment segment showed exceptional growth, with sales up 28% due to increased demand in commercial markets.
  • 4A substantial portion of revenue (40%) is derived from the defense sector, though future government spending is expected to moderate.
  • 5Commercial aerospace and power generation segments experienced strong growth, indicating positive trends in these key markets.
  • 6Backlog remained strong at $1.7 billion, providing visibility for future revenue.
  • 7The company continued its acquisition strategy, integrating eight new businesses in 2011.

Frequently Asked Questions

Curtiss-Wright's sales growth in 2011 was primarily driven by increased volume across all three segments: Flow Control, Motion Control, and Metal Treatment. Key contributing factors included strong demand in the commercial aerospace market due to increased production by manufacturers like Boeing and Airbus, robust activity in the power generation sector, particularly supporting nuclear plant operations, and increased demand for metal treatment services. Defense sector sales also saw modest growth, supported by specific programs.

Curtiss-Wright's acquisition strategy played a significant role in its 2011 performance. The company acquired eight businesses throughout the year, which contributed incremental sales and expanded its capabilities, particularly in the Metal Treatment segment. These acquisitions are aligned with the company's strategy to grow through diversification in complementary markets that demand high performance and engineered products and services.

A primary risk identified is the company's substantial reliance on U.S. government defense spending, which is subject to budget fluctuations and potential reductions. Other significant risks include intense market competition, the company's dependence on key personnel, potential disruptions from international operations, product liability risks, and the need to manage integration of acquired businesses successfully. The company also faces challenges related to fluctuating operating results and the potential for asset impairment charges.

The company anticipates continued growth in its commercial markets, with commercial aerospace expected to benefit from ongoing aircraft production increases and the power generation market to grow due to maintenance and upgrade requirements for nuclear plants. The oil and gas market is expected to see a rebound driven by maintenance and repair activities. In the defense sector, while overall spending is expected to moderate, demand for C4ISR and unmanned systems is projected to remain strong, providing opportunities for the company's embedded computing technologies.