10-QPeriod: Q1 FY2007

CURTISS WRIGHT CORP Quarterly Report for Q1 Ended Mar 31, 2007

Filed May 10, 2007For Securities:CW

Summary

Curtiss-Wright Corporation (CW) reported a strong first quarter for 2007, with net sales increasing by 17.7% to $332.6 million compared to $282.6 million in the prior year period. This growth was primarily driven by robust organic growth across its Motion Control and Metal Treatment segments, coupled with contributions from acquisitions made in 2006. Net earnings saw a significant jump of 59% to $19.5 million ($0.44 per diluted share) from $12.3 million ($0.28 per diluted share) in Q1 2006. The company's operating income also rose substantially by 42.7% to $35.1 million. The company's strategic focus on diversified niche markets, particularly in defense, commercial aerospace, and oil & gas, appears to be paying off. Despite a slight decrease in operating income for the Flow Control segment, the strong performance in Motion Control and Metal Treatment, along with overall margin expansion, indicates positive operational execution. The company also reaffirmed its commitment to growth through strategic acquisitions, with a notable acquisition of Scientech, LLC announced shortly after the quarter end.

Key Highlights

  • 1Net sales increased significantly by 17.7% to $332.6 million in Q1 2007, up from $282.6 million in Q1 2006.
  • 2Net earnings grew by 59% to $19.5 million ($0.44 per diluted share) in Q1 2007, compared to $12.3 million ($0.28 per diluted share) in Q1 2006.
  • 3Operating income surged by 42.7% to $35.1 million in Q1 2007.
  • 4Strong organic growth was observed, particularly in the Motion Control (22% sales growth) and Metal Treatment (19% sales growth) segments.
  • 5Backlog increased by 7.0% to $936.3 million at March 31, 2007, indicating strong future demand, with approximately 55% from military business.
  • 6The company announced the acquisition of Scientech, LLC for $57.8 million shortly after the quarter end, intended to bolster its Flow Control segment.
  • 7Overall operating margins improved by 190 basis points to 10.6% in Q1 2007.

Frequently Asked Questions

Revenue growth was primarily driven by strong organic growth across the Motion Control (22%) and Metal Treatment (19%) segments. The oil and gas and defense markets were key contributors to this growth, alongside a recovery in the commercial aerospace market. Acquisitions made in 2006 also contributed approximately $9.6 million in incremental sales.

Profitability improved significantly. Net earnings increased by 59% to $19.5 million, and diluted earnings per share rose to $0.44 from $0.28 in the prior year. Operating income grew by 42.7% to $35.1 million, and overall operating margins expanded by 190 basis points to 10.6%.

The company's backlog increased by 7.0% to $936.3 million as of March 31, 2007. This healthy backlog, with a significant portion (approximately 55%) from military business, suggests continued revenue generation and provides a positive outlook for future performance.

The company highlighted its strategy of balanced growth through internal development and disciplined acquisitions. A significant post-quarter event was the announced acquisition of Scientech, LLC for $57.8 million, which is expected to integrate into the Flow Control segment and enhance its offerings in the commercial nuclear power market. The company also mentioned ongoing investments in research and development for new technologies.