01—Abstract
Summary
Summary of the 10-K filed February 27, 2020. Cited figures are marked; the original filing is the authoritative source.
Curtiss-Wright Corporation (CW) reported solid performance in its 2019 10-K filing, demonstrating revenue growth driven by its Defense and Power segments.
The company's diversified business model, spanning defense, commercial aerospace, general industrial, and power generation markets, showcased resilience. Notably, the Defense segment saw increased sales from naval and aerospace programs, while the Power segment benefited from naval defense programs and aftermarket services for commercial nuclear power plants. The company also highlighted strategic acquisitions and a strong backlog, indicating positive future prospects.
Management's focus on margin improvement initiatives and operational efficiencies contributed to operating income growth. CW's financial health appears robust, with adequate liquidity and cash flow from operations to support ongoing investments and shareholder returns.
02—Key points
Key Highlights
- Total net sales increased by 3% to $2.49 billion in 2019 compared to 2018.
- Operating income increased by 8% to $404 million in 2019, with operating margin improving by 70 basis points to 15.8%.
- The Defense segment experienced a 12% increase in sales, driven by strong performance in naval and aerospace defense markets.
- Two strategic acquisitions were completed in 2019, contributing to sales growth and market expansion.
- The company ended the year with a significant backlog of $2.17 billion, indicating strong future demand for its products and services.
- Cash provided by operating activities increased by $85 million to $421 million in 2019.
- The company declared and paid dividends of $0.66 per share in 2019, an increase from $0.60 in 2018.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Curtiss Wright Corp kept $0.12.
- Revenue$2.49B100.0%
- Cost of revenue−$1.59B63.9%
- Gross profit$898.7M36.1%
- Operating costs−$494.8M19.9%
- Operating income$404.0M16.2%
- Interest, other & tax−$96.4M3.9%
- Net income$307.6M12.4%
Where FY2019 revenue went
$2.49B- Cost of revenue: $1.59B, 64% of revenue
- Other operating costs: $422.3M, 17% of revenue
- Net income: $307.6M, 12% of revenue
- R&D: $72.5M, 2.9% of revenue
- Interest, other & tax: $96.4M, 3.9% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 27, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $2.49B$2.41B | +3.2% |
| Cost of Revenue | $1.59B$1.54B | +3.2% |
| Gross Profit | $898.75M$871.26M | +3.2% |
| R&D Expenses | $72.52M$64.53M | +12.4% |
| Operating Income | $403.95M$373.63M | +8.1% |
| Interest Expense | $31.35M$33.98M | −7.8% |
| Net Income | $307.58M$275.75M | +11.5% |
| EPS (Basic) | $7.20$6.28 | +14.6% |
| EPS (Diluted) | $7.15$6.22 | +15.0% |
| Shares Outstanding (Basic) | 42.74M43.89M | −2.6% |
| Shares Outstanding (Diluted) | 43.02M44.32M | −2.9% |
05—Questions
Frequently Asked Questions
What are Curtiss-Wright's primary end markets?
Curtiss-Wright operates across three main segments: Commercial/Industrial, Defense, and Power. These segments serve a diverse range of end markets including defense (aerospace, ground, naval), commercial aerospace, power generation (commercial nuclear), and general industrial (transportation, oil & gas, medical, agriculture, construction).
How did the company's sales performance look in 2019?
In 2019, Curtiss-Wright reported total net sales of $2.49 billion, a 3% increase from $2.41 billion in 2018. This growth was supported by increases in sales across all three segments, particularly the Defense segment which saw a 12% rise in sales due to strong performance in naval and aerospace defense markets.
What is the company's outlook regarding defense spending?
Curtiss-Wright's Defense segment is significantly influenced by U.S. government funding and spending. The filing indicates a stabilized defense spending environment, with recent bipartisan budget agreements providing increased security to federal agencies and setting solid topline spending figures for 2020 and 2021. The company highlights continued solid funding for U.S. shipbuilding programs and increased funding levels for C4ISR, electronic warfare, and unmanned systems programs.
How does Curtiss-Wright manage its financial risks?
The company manages financial risks primarily through its operational strategies and, when deemed appropriate, through the use of derivative financial instruments. Key risks include interest rate fluctuations and foreign currency exchange rates. Curtiss-Wright uses forward foreign currency contracts and may use interest rate swaps to manage these exposures, and it maintains strong credit standards for counterparties.
06—Continue