01—Abstract
Summary
Summary of the 10-K filed February 22, 2023. Cited figures are marked; the original filing is the authoritative source.
Curtiss-Wright Corporation (CW) reported solid performance in its fiscal year 2022, driven by growth in its Aerospace & Industrial and Naval & Power segments.
Total sales increased by 2% to $2.56 billiona, with operating income rising 11% to $423 million, reflecting improved operating margins across key segments. The company continues to benefit from its strong position in defense markets, with significant revenue derived from U.S. government contracts. The Aerospace & Industrial segment saw a 6% increase in sales, primarily from general industrial and commercial aerospace markets, while the Naval & Power segment experienced a 4% sales increase, bolstered by acquisitions and demand in naval defense.
The Defense Electronics segment, however, saw a 5%b decline in sales due to ongoing supply chain challenges. Financially, Curtiss-Wright demonstrated strong cash flow generation and maintained a healthy balance sheet.
The company repurchased $57 millionc in stock and paid $29 million in dividends, indicating a commitment to returning capital to shareholders. Management expects continued growth in defense spending to support future performance, although it remains watchful of inflationary pressures and supply chain disruptions impacting its commercial businesses.
02—Key points
Key Highlights
- Total sales increased by 2% to $2.56 billion in 2022.
- Operating income increased by 11% to $423 million, with operating margin improving by 130 basis points.
- Aerospace & Industrial segment sales grew 6% to $836 million, driven by industrial and commercial aerospace markets.
- Naval & Power segment sales increased 4% to $1.03 billion, supported by acquisitions and strong defense demand.
- Defense Electronics segment sales decreased 5% to $690 million due to supply chain headwinds.
- The company ended the year with a strong backlog of $2.6 billion, up 18% year-over-year.
- Curtiss-Wright repurchased $57 million of its common stock and paid $29 million in dividends during 2022.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Curtiss Wright Corp kept $0.12.
- Revenue$2.56B100.0%
- Cost of revenue−$1.60B62.7%
- Gross profit$954.6M37.3%
- Operating costs−$531.2M20.8%
- Operating income$423.4M16.6%
- Interest, other & tax−$129.1M5.0%
- Net income$294.3M11.5%
Where FY2022 revenue went
$2.56B- Cost of revenue: $1.60B, 63% of revenue
- Other operating costs: $450.3M, 18% of revenue
- Net income: $294.3M, 12% of revenue
- R&D: $80.8M, 3.2% of revenue
- Interest, other & tax: $129.1M, 5.0% of revenue
Kept 12% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 22, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $2.56B$2.50B | +2.2% |
| Cost of Revenue | $1.60B$1.57B | +1.9% |
| Gross Profit | $954.61M$927.80M | +2.9% |
| R&D Expenses | $80.84M$88.49M | −8.6% |
| Operating Income | $423.44M$377.13M | +12.3% |
| Interest Expense | $46.98M$40.24M | +16.7% |
| Net Income | $294.35M$262.83M | +12.0% |
| EPS (Basic) | $7.67$6.50 | +18.0% |
| EPS (Diluted) | $7.62$6.47 | +17.8% |
| Shares Outstanding (Basic) | 38.39M40.42M | −5.0% |
| Shares Outstanding (Diluted) | 38.65M40.60M | −4.8% |
05—Questions
Frequently Asked Questions
What were the main drivers of Curtiss-Wright's revenue growth in 2022?
Revenue growth was primarily driven by the Aerospace & Industrial segment, which saw increased demand in general industrial and commercial aerospace markets, and the Naval & Power segment, benefiting from acquisitions and strong demand in naval defense. Growth in U.S. defense spending also contributed positively.
What challenges did Curtiss-Wright face in 2022?
The primary challenges faced by Curtiss-Wright included ongoing supply chain headwinds that negatively impacted the Defense Electronics segment, leading to lower sales volumes. The company also noted inflationary pressures on material, labor, and services, although it has generally been able to pass these costs on to customers.
How did Curtiss-Wright manage its capital allocation in 2022?
Curtiss-Wright focused on returning capital to shareholders by repurchasing $57 million of its common stock and paying $29 million in dividends. The company also invested in growth through acquisitions, spending $282 million on two businesses. Its balance sheet remained strong, with significant unused credit capacity.
What is Curtiss-Wright's outlook for defense spending?
The company anticipates a favorable demand environment and continued growth in global defense spending, particularly from U.S. DoD budgets and NATO countries. This outlook is supported by government spending on modernization efforts and emerging technological trends in defense.
06—Continue