10-KPeriod: FY2013

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2013

Filed February 21, 2014For Securities:CW

Summary

Curtiss-Wright Corporation's (CW) 2013 10-K filing reveals a year of significant growth and strategic acquisitions across its three main segments: Flow Control, Controls, and Surface Technologies. The company reported a 20% increase in total sales to $2.51 billion, driven largely by a robust performance in its commercial markets, particularly in Oil & Gas and Commercial Aerospace, bolstered by five strategic acquisitions totaling $236 million. Despite a slight decrease in Defense sales, the overall revenue growth reflects successful diversification and expansion into growing commercial sectors. The company's net earnings from continuing operations saw a substantial increase of 50% to $138 million, or $2.88 per diluted share. This strong financial performance was supported by operational improvements, strategic acquisitions, and a reduction in certain prior-year charges. CW continues to focus on its strategy of being an integrated, market-facing global company, aiming for superior operating margins and return metrics, while maintaining a disciplined capital deployment strategy that includes reinvestment in the business and returning capital to shareholders.

Financial Highlights

57 data points
Beta

Revenue

$2.12B

34.7% Gross Margin

Net Income

$137.98M

6.5% Net Margin

EPS (Diluted)

$2.88

Total Assets

$3.46B

Cash & Equivalents

$175.29M

Free Cash Flow

$165.59M

Financial Statements
Beta
Revenue$2.12B
Cost of Revenue$1.38B
Gross Profit$735.84M
R&D Expenses$63.58M
Operating Income$237.12M
Interest Expense$37.05M
Net Income$137.98M
EPS (Basic)$2.94
EPS (Diluted)$2.88
Shares Outstanding (Basic)46.99M
Shares Outstanding (Diluted)47.91M

Key Highlights

  • 1Total sales increased by 20% to $2.51 billion in 2013, driven by acquisitions and growth in commercial markets.
  • 2Net earnings from continuing operations rose by 50% to $138 million, with diluted EPS reaching $2.88.
  • 3The company completed five strategic acquisitions in 2013 for a total of $236 million, strengthening its market positions.
  • 4Defense market sales experienced a slight decline of 2%, while commercial market sales grew by a significant 33%.
  • 5The Flow Control segment saw a 19% increase in sales, largely due to acquisitions, and a notable improvement in operating income.
  • 6The Controls segment reported a 24% sales increase and a 25% rise in operating income, driven by acquisitions and commercial aerospace demand.
  • 7Surface Technologies segment sales grew by 14%, with a substantial 85% increase in operating income due to operational benefits and reduced charges.
  • 8The company repurchased shares under its announced program but made no repurchases in 2013, while increasing its dividend by 11.1%.

Frequently Asked Questions

Curtiss-Wright demonstrated strong financial performance in 2013, with total sales increasing by 20% to $2.51 billion and net earnings from continuing operations rising by 50% to $138 million. Diluted earnings per share were $2.88.

The company completed five strategic acquisitions in 2013 for a total of $236 million. These acquisitions were a significant driver of the 20% increase in total sales, contributing incremental sales of $400.5 million across the segments, and also contributed $16.8 million to operating income. Acquisitions were noted as dilutive to operating margin in their first year due to purchase price accounting adjustments.

The company anticipates continued modest growth in its commercial and industrial markets, supported by moderate economic recovery. The defense sector outlook is described as flat to uncertain due to potential budget changes, though specific programs like naval shipbuilding and C4ISR are expected to be stable. Commercial aerospace is expected to continue its growth trajectory, while the oil and gas market anticipates a modest turnaround in large capital projects alongside continued MRO demand.

Key risks include the substantial dependence on U.S. government defense spending, which is subject to budget fluctuations and potential reductions. Other significant risks involve compliance with government procurement rules and regulations, the success of future acquisitions and integration, potential changes in long-term contract estimates, competition in highly competitive markets, and risks associated with international operations, including currency fluctuations and political/economic instability.