10-QPeriod: Q3 FY2011

CURTISS WRIGHT CORP Quarterly Report for Q3 Ended Sep 30, 2011

Filed November 4, 2011For Securities:CW

Summary

Curtiss-Wright Corporation (CW) reported a solid increase in net sales and net earnings for the nine months ended September 30, 2011, compared to the same period in 2010. Total sales grew by 9.0% to $1.49 billion, while net earnings surged by 29.5% to $90.7 million. This growth was driven by a combination of organic sales increases across its segments, particularly in Metal Treatment, and the impact of strategic acquisitions made during the period. The company demonstrated strong operational execution, with a significant increase in operating income by 17.1% year-over-year, benefiting from improved absorption of overhead costs and acquisitions. Operationally, the company experienced substantial growth in its Metal Treatment segment, with sales up 28.3% and operating income soaring by 81.2%. The Motion Control segment also showed healthy sales growth of 10.3%, though operating income remained relatively flat due to strategic investments and unfavorable currency impacts. The Flow Control segment saw modest sales growth of 3.9% but a slight decrease in operating income, impacted by delays in oil and gas capital projects. The company's liquidity remains adequate, supported by operating cash flow and available borrowings, despite a notable increase in short-term debt related to the upcoming maturity of its credit agreement.

Financial Highlights

55 data points
Beta

Revenue

$509.12M

32.9% Gross Margin

Net Income

$34.49M

6.8% Net Margin

EPS (Diluted)

$0.73

Total Assets

$2.45B

Cash & Equivalents

$54.98M

Free Cash Flow

$15.01M

Financial Statements
Beta
Revenue$509.12M
Cost of Revenue$341.79M
Gross Profit$167.33M
R&D Expenses$17.70M
Operating Income$46.11M
Interest Expense$5.03M
Net Income$34.49M
EPS (Basic)$0.74
EPS (Diluted)$0.73
Shares Outstanding (Basic)46.47M
Shares Outstanding (Diluted)46.94M

Key Highlights

  • 1Net sales for the nine months ended September 30, 2011, increased by 9.0% to $1.49 billion, compared to $1.37 billion in the prior year.
  • 2Net earnings for the nine months ended September 30, 2011, rose by 29.5% to $90.7 million, translating to $1.93 diluted earnings per share, up from $1.51 in the prior year.
  • 3The Metal Treatment segment showed robust performance, with sales up 28.3% and operating income up 81.2% for the nine-month period.
  • 4Curtiss-Wright completed five acquisitions during the first nine months of 2011, contributing $52 million to sales and adding $62 million in goodwill.
  • 5Operating income for the nine months increased by 17.1% to $143.5 million, driven by higher sales volumes and improved absorption of overhead costs.
  • 6The company ended the quarter with a strong balance sheet, although current liabilities increased significantly due to a reclassification of the revolving credit agreement to short-term debt as its August 2012 maturity approaches.
  • 7New orders for the nine-month period increased by 14.8% to $1.56 billion, indicating strong demand across key markets.

Frequently Asked Questions

The primary drivers are a combination of robust organic growth across its business segments, particularly in the Metal Treatment segment, and the impact of five strategic acquisitions completed during the period. These acquisitions contributed significantly to sales and the company's goodwill balance.

The five acquisitions made in the first nine months of 2011 contributed approximately $52 million in sales and added $62 million in goodwill. They also boosted operating income and new orders, especially in the Metal Treatment and Motion Control segments.

The increase in short-term debt is primarily due to the reclassification of the company's revolving credit agreement as it approaches its August 2012 maturity. While this increases current liabilities, the company states that its cash and cash equivalents, cash flow from operations, and available borrowings are sufficient to meet its short-term and long-term capital needs.

The Metal Treatment segment showed exceptional growth in sales and operating income. The Motion Control segment experienced strong sales growth but flat operating income due to strategic investments and currency impacts. The Flow Control segment saw modest sales growth with a slight decrease in operating income, mainly affected by delays in oil and gas projects.