10-QPeriod: Q2 FY2005

CURTISS WRIGHT CORP Quarterly Report for Q2 Ended Jun 30, 2005

Filed August 9, 2005For Securities:CW

Summary

Curtiss-Wright Corporation reported strong financial performance for the quarter ended June 30, 2005, with significant year-over-year increases in net sales and net earnings. Net sales rose by 27.3% to $283.2 million, driven by robust organic growth across all three segments and contributions from recent acquisitions. Net earnings showed a substantial increase of 25% to $17.9 million, translating to $0.82 per diluted share, up from $0.67 in the prior year's comparable quarter. The company's strategic focus on growth through acquisitions, particularly the recent acquisition of Indal Technologies, Inc., appears to be paying off, as reflected in both top-line revenue and bottom-line profitability. The diversified business model, serving markets such as defense, commercial aerospace, and oil & gas, demonstrated resilience and achieved organic growth in nearly all its markets, highlighting strong operational execution. Investors can take note of the company's increasing backlog and its ability to generate operating income growth, which was partially offset by higher interest expenses related to its acquisition funding.

Key Highlights

  • 1Net sales for the quarter increased by 27.3% to $283.2 million compared to the prior year period.
  • 2Net earnings grew by 25% to $17.9 million, with diluted EPS reaching $0.82, up from $0.67.
  • 3The company completed a significant acquisition, Indal Technologies, Inc., in May 2005, contributing to revenue growth.
  • 4Operating income increased by 30.6% to $33.2 million, reflecting strong sales volumes and cost management.
  • 5Backlog increased by 18% to $740.6 million, indicating strong future demand, with approximately 70% from military business.
  • 6The company experienced double-digit organic growth in all three operating segments (Flow Control, Motion Control, and Metal Treatment).
  • 7Cash and cash equivalents increased to $48.0 million at June 30, 2005, from $41.0 million at December 31, 2004.

Frequently Asked Questions

The revenue increase was driven by a combination of factors. Acquisitions made since March 31, 2004, contributed significantly with $31.6 million in incremental sales. Additionally, the company achieved 12% overall organic growth, fueled by strong performance in the commercial aerospace and oil & gas markets. Favorable foreign currency translation also contributed positively.

The acquisition strategy is showing positive results. The acquisition of Indal Technologies, Inc. in May 2005, along with other acquisitions made in 2004, contributed significantly to both sales growth and incremental operating income. The company utilized its revolving credit facilities to fund these acquisitions, which also led to an increase in interest expense.

The company's backlog increased by 18% to $740.6 million at June 30, 2005. Approximately 70% of this backlog is derived from military business, indicating a strong demand pipeline. The company is seeing growth across various markets, including commercial aerospace, oil and gas, and defense aerospace.

Curtiss-Wright has a $400 million revolving credit agreement and has also issued Senior Notes. At June 30, 2005, borrowings under the credit agreement were $185 million, with $189.1 million in unused credit available. The company is in compliance with its debt covenants, which include a debt-to-capitalization limit. Future acquisitions will be funded through existing cash, available credit, or new financing alternatives.