10-QPeriod: Q2 FY2011

CURTISS WRIGHT CORP Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 5, 2011For Securities:CW

Summary

Curtiss-Wright Corporation reported a strong second quarter and first half of 2011, with significant year-over-year increases in net sales, operating income, and net earnings across its diverse segments. The company saw robust growth driven by increased demand in both defense and commercial markets, particularly in aerospace, power generation, and general industrial sectors. Strategic acquisitions also contributed positively to revenue growth, with three businesses added in the first half of the year. The company maintains a solid financial position, with healthy working capital and available credit, indicating good liquidity to support ongoing operations and future investments. Key operational highlights include substantial revenue increases in the Metal Treatment and Motion Control segments, alongside steady growth in Flow Control. The company also experienced a significant rise in new orders, signaling continued demand for its specialized products and services. Despite some market-specific headwinds, such as a decline in oil and gas sales, Curtiss-Wright's diversified business model and focus on high-value engineering solutions appear to be driving positive financial performance.

Financial Statements
Beta

Key Highlights

  • 1Net sales increased by 11.4% to $514.9 million for the three months ended June 30, 2011, and by 8.1% to $976.8 million for the six months ended June 30, 2011, compared to the prior year periods.
  • 2Net earnings showed strong growth, rising 22.8% to $31.8 million for the quarter and 33.3% to $56.3 million for the first six months.
  • 3Operating income increased significantly by 19.0% to $51.7 million for the quarter and 25.3% to $93.4 million year-to-date, driven by higher sales volume and improved overhead absorption.
  • 4The Metal Treatment segment experienced exceptional growth with sales up 31.3% for the quarter and 61.2% in operating income.
  • 5The company completed three acquisitions in the first half of 2011 (BASF Surface Technologies, Douglas Equipment Ltd., and Predator Systems, Inc.), contributing positively to revenue and expanding capabilities.
  • 6New orders increased by $100 million for the quarter and $86 million year-to-date, indicating strong future revenue potential.
  • 7The company maintained a strong balance sheet with total assets of $2.38 billion and a current ratio of 2.4:1 as of June 30, 2011, demonstrating robust liquidity.

Frequently Asked Questions

Revenue growth in the second quarter of 2011 was primarily driven by increased sales volume across all segments, particularly in the Metal Treatment, Motion Control, and Flow Control segments. This growth was supported by strong demand in both defense and commercial markets, with notable increases in aerospace, power generation, and general industrial sectors. Acquisitions made in the last twelve months also contributed, as did favorable foreign currency translation.

Curtiss-Wright acquired three businesses in the first half of 2011: BASF Surface Technologies, Douglas Equipment Ltd., and Predator Systems, Inc. These acquisitions contributed positively to revenue growth, adding $19 million in the quarter and $26 million year-to-date. While their impact on operating income was minimal in the immediate quarter, they expanded the company's capabilities and market reach.

The company operates in three reportable segments: Flow Control, Motion Control, and Metal Treatment. All segments showed growth in sales and operating income. The Metal Treatment segment was a standout performer, with sales up 31.3% and operating income up 61.2% for the quarter. Motion Control saw strong sales growth (13.4%), and Flow Control demonstrated steady growth (5.9%).

The company reported healthy liquidity with cash and cash equivalents of $63.1 million and a working capital of $565.8 million as of June 30, 2011. The current ratio stood at a strong 2.4:1. The company also has significant available borrowing capacity under its revolving credit agreement, which expires in August 2012. Management believes its cash flow, cash on hand, and available credit are sufficient to meet its capital needs.