01—Abstract
Summary
Summary of the 10-K filed February 21, 2013. Cited figures are marked; the original filing is the authoritative source.
Curtiss-Wright Corporation's 2012 Form 10-K report details a robust year of strategic growth driven by a strong acquisition strategy.
The company successfully integrated eight new businesses, expanding its reach in key markets like defense, aerospace, oil & gas, and power generation. Despite a slight decline in defense revenue due to program wind-downs and budget uncertainties, the company saw significant growth in its commercial aerospace and power generation segments, bolstered by these acquisitions. The company's diversification across its three segments—Flow Control, Controls, and Surface Technologies—provides a resilient business model.
Management remains focused on operational efficiency, cost management, and innovation to navigate economic fluctuations and competitive pressures. The report highlights continued investment in research and development and a commitment to returning capital to shareholders through dividends and share repurchases, underscoring a positive outlook for continued financial strength and market leadership.
02—Key points
Key Highlights
- Curtiss-Wright reported a 4% increase in total sales to $2.1 billion in 2012, driven by acquisitions and growth in commercial markets, particularly aerospace and power generation.
- The company completed eight acquisitions in 2012, enhancing its product portfolio and market presence, with continued strategic focus on acquiring businesses that align with long-term growth.
- Defense sector sales saw a 6% decrease, primarily due to winding down of naval and ground defense programs and U.S. defense budget uncertainties, though the company maintains significant content on key platforms.
- Operating income decreased by 14% to $161 million, impacted by strike-related costs, restructuring charges, and additional investments in the AP1000 program within the Flow Control segment.
- The company’s backlog stood at $1.65 billion at year-end 2012, reflecting continued demand across its diverse end markets.
- Curtiss-Wright's proactive management of its capital structure is evident with $880 million in debt outstanding and a $500 million revolving credit facility, demonstrating a solid liquidity position.
- The company increased its quarterly dividend by 12.5% in 2012, signaling confidence in its financial performance and commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Curtiss Wright Corp kept $0.06.
- Revenue$1.82B100.0%
- Cost of revenue−$1.21B66.4%
- Gross profit$612.4M33.6%
- Operating costs−$431.0M23.6%
- Operating income$181.4M9.9%
- Interest, other & tax−$67.5M3.7%
- Net income$113.8M6.2%
Where FY2012 revenue went
$1.82B- Cost of revenue: $1.21B, 66% of revenue
- Other operating costs: $376.7M, 21% of revenue
- Net income: $113.8M, 6.2% of revenue
- R&D: $54.4M, 3.0% of revenue
- Interest, other & tax: $67.5M, 3.7% of revenue
Kept 6.2% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 21, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $1.82B$2.02B | −9.6% |
| Cost of Revenue | $1.21B$1.36B | −11.0% |
| Gross Profit | $612.42M$656.95M | −6.8% |
| R&D Expenses | $54.35M$62.12M | −12.5% |
| Operating Income | $181.39M$186.85M | −2.9% |
| Interest Expense | $26.30M$20.83M | +26.2% |
| Net Income | $113.84M$126.39M | −9.9% |
| EPS (Basic) | $2.44$2.73 | −10.6% |
| EPS (Diluted) | $2.41$2.69 | −10.4% |
| Shares Outstanding (Basic) | 46.74M46.37M | +0.8% |
| Shares Outstanding (Diluted) | 47.41M47.01M | +0.8% |
05—Questions
Frequently Asked Questions
What were Curtiss-Wright's primary growth drivers in 2012?
Curtiss-Wright's primary growth drivers in 2012 were its strategic acquisitions and the expansion of its commercial markets, particularly in commercial aerospace and power generation. The integration of eight new businesses strengthened its market position and product offerings.
How did the company's performance in the defense sector compare to its commercial segments?
The defense sector experienced a 6% decrease in sales due to program wind-downs and U.S. defense budget uncertainties. In contrast, the company's commercial segments, especially commercial aerospace and power generation, showed significant growth, contributing positively to overall sales.
What were the main factors impacting the company's operating income in 2012?
Operating income was impacted by several factors, including costs related to a strike at its Electro-Mechanical Division, restructuring charges in the Surface Technologies segment, additional investments in the AP1000 program, higher interest expenses, and increased effective tax rates.
What is the company's outlook regarding U.S. defense spending and its potential impact?
Curtiss-Wright acknowledges the uncertainty surrounding U.S. defense spending, particularly with the ongoing discussions around sequestration. Any significant reductions or changes in spending allocation could materially impact the company's revenues and results of operations. However, the company remains a key supplier on various high-performance defense programs.
06—Continue