10-KPeriod: FY2014

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2014

Filed February 19, 2015For Securities:CW

Summary

Curtiss-Wright Corporation's 2014 10-K filing reveals a company in a growth phase, driven significantly by strategic acquisitions across its Commercial/Industrial and Energy segments. The company reported a 6% increase in net sales to $2.24 billion, with strong performance in its Commercial/Industrial segment (+13%) and Energy segment (+8%), while the Defense segment saw a slight decline (-4%). Net earnings from continuing operations grew by a notable 22% to $170 million, demonstrating effective cost management and operational improvements. The company's strategy centers on diversification to mitigate business cycle volatility and leveraging its position in high-performance, technically sophisticated markets. Curtiss-Wright continued its acquisition strategy in 2014, acquiring three businesses to bolster its portfolio, and indicated plans for continued M&A activity. The report also highlights the company's commitment to returning capital to shareholders, evidenced by a 30% increase in its quarterly dividend and an authorized $300 million share repurchase program starting in 2015.

Financial Highlights

57 data points
Beta

Revenue

$2.24B

34.6% Gross Margin

Net Income

$113.34M

5.1% Net Margin

EPS (Diluted)

$2.31

Total Assets

$3.38B

Cash & Equivalents

$450.12M

Free Cash Flow

$264.65M

Financial Statements
Beta
Revenue$2.24B
Cost of Revenue$1.47B
Gross Profit$776.52M
R&D Expenses$67.84M
Operating Income$282.37M
Interest Expense$35.79M
Net Income$113.34M
EPS (Basic)$2.36
EPS (Diluted)$2.31
Shares Outstanding (Basic)48.02M
Shares Outstanding (Diluted)49.08M

Key Highlights

  • 1Net sales increased by 6% to $2.24 billion in 2014, driven by strong performance in the Commercial/Industrial and Energy segments.
  • 2Net earnings from continuing operations grew by 22% to $170 million, reflecting improved profitability and operational efficiency.
  • 3The company completed three strategic acquisitions in 2014 to expand its portfolio and market reach.
  • 4The Defense segment experienced a 4% decrease in sales, partly due to lower production levels on certain programs and a strategic shift towards commercial markets.
  • 5Curtiss-Wright increased its quarterly dividend by 30% and announced a significant share repurchase program for 2015.
  • 6The company faces risks related to U.S. government defense spending, contractual obligations, competition, and the integration of acquired businesses.

Frequently Asked Questions

Sales growth in 2014 was primarily driven by increases in the Commercial/Industrial segment, fueled by acquisitions and higher demand in commercial aerospace and the oil and gas markets. The Energy segment also contributed positively due to increased demand for industrial valves and pressure relief valves. The Defense segment experienced a slight decrease, impacted by lower sales in ground defense and changes in government spending priorities.

Curtiss-Wright actively pursued its acquisition strategy in 2014, acquiring three businesses for a total of $34.4 million. These acquisitions contributed $63 million in incremental sales and $5 million in incremental operating income to the Commercial/Industrial segment, significantly contributing to the segment's overall growth and profitability.

Key risks include the cyclical nature of U.S. defense spending, potential contract terminations or penalties, intense competition, the success of integrating acquired businesses, reliance on key personnel, and fluctuations in international operations due to economic and political instability. The company also noted potential liabilities related to a significant product liability claim and ongoing environmental remediation.

Curtiss-Wright demonstrated its commitment to shareholder returns by increasing its quarterly dividend by 30% in the first quarter of 2014. Furthermore, the company announced a new share repurchase program authorized by its board of directors to purchase up to $300 million of its common stock, beginning in 2015.