10-KPeriod: FY2021

CURTISS WRIGHT CORP Annual Report, Year Ended Dec 31, 2021

Filed February 24, 2022For Securities:CW

Summary

Curtiss-Wright Corporation (CW) reported solid performance in its 2021 10-K filing, demonstrating revenue growth driven primarily by its Defense Electronics and Naval & Power segments. The company's diversified business model, serving both aerospace & defense and critical commercial markets, appears to be a key strength in navigating market fluctuations. Significant investments in acquisitions, particularly in the Defense Electronics segment, contributed to growth. While facing some headwinds in the commercial aerospace market due to the lingering effects of the pandemic and supply chain disruptions, the company maintained a strong backlog and indicated positive outlooks for its key end markets, especially within defense spending. Financially, CW showed improved operating income and margins, supported by operational excellence initiatives and cost-saving measures stemming from prior restructuring. The company also actively managed its capital resources through share repurchases and dividend payments. However, investors should note the ongoing risks associated with government contract dependence, supply chain volatility, and potential impacts from global economic conditions and geopolitical events.

Financial Highlights

54 data points
Beta

Revenue

$2.50B

37.1% Gross Margin

Net Income

$262.83M

10.5% Net Margin

EPS (Diluted)

$6.47

Total Assets

$4.10B

Cash & Equivalents

$171.00M

Free Cash Flow

$346.56M

Financial Statements
Beta
Revenue$2.50B
Cost of Revenue$1.57B
Gross Profit$927.80M
R&D Expenses$88.49M
Operating Income$377.13M
Interest Expense$40.24M
Net Income$262.83M
EPS (Basic)$6.50
EPS (Diluted)$6.47
Shares Outstanding (Basic)40.42M
Shares Outstanding (Diluted)40.60M

Key Highlights

  • 1Total sales increased by 5% to $2.51 billion in 2021, driven by strong performance in Defense Electronics and Naval & Power segments.
  • 2Operating income saw a significant increase of 32% to $383 million, with operating margins expanding by 320 basis points, reflecting operational efficiencies and strategic initiatives.
  • 3The Defense Electronics segment experienced robust sales growth of 19%, largely due to the incremental impact of the PacStar acquisition.
  • 4New orders increased by 11% to $2.58 billion, indicating continued demand for CW's products and services across its segments.
  • 5The company ended the year with a backlog of $2.23 billion, providing visibility into future revenue streams.
  • 6Curtiss-Wright actively returned capital to shareholders through share repurchases totaling $343 million and dividend payments of $29 million in 2021.
  • 7The company's financial position remains strong, with $171 million in cash and cash equivalents and ample borrowing capacity under its credit facility.

Frequently Asked Questions

Curtiss-Wright has a significant reliance on U.S. Government contracts. For 2021, approximately 50% of its total net sales were derived from or related to U.S. defense programs. This makes the company sensitive to changes in U.S. defense spending and government procurement policies.

Revenue growth in 2021 was primarily driven by the Defense Electronics segment, which saw a 19% increase in sales, significantly boosted by the acquisition of PacStar. The Naval & Power segment also contributed positively with a 2% increase in sales. The Aerospace & Industrial segment experienced a slight decrease in sales.

Key risks include dependence on U.S. government defense spending, potential disruptions in the global supply chain (exacerbated by the COVID-19 pandemic), competition in highly engineered product markets, product liability, warranty obligations, and risks associated with its acquisition strategy. The company also faces market risks related to the commercial aerospace and power & process industries.

As of December 31, 2021, Curtiss-Wright had $1.0 billion in debt outstanding and was in compliance with its debt covenants. The company maintained a strong liquidity position with $171 million in cash and cash equivalents and $385 million in unused borrowing capacity under its credit facility. Management continuously evaluates cash utilization for share repurchases, acquisitions, and dividends.