10-QPeriod: Q1 FY2022

CURTISS WRIGHT CORP Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 5, 2022For Securities:CW

Summary

Curtiss-Wright Corporation reported a decrease in net sales and net earnings for the first quarter of 2022 compared to the same period in 2021. Total net sales were $559.5 million, down 6% year-over-year, while net earnings fell 32% to $40.7 million, resulting in diluted earnings per share of $1.05. The decline in performance was primarily driven by lower sales in the Defense Electronics and Naval & Power segments, impacted by factors such as unfavorable overhead absorption, unfavorable mix, and the timing of orders. Despite the overall revenue decline, the Aerospace & Industrial segment showed a 6% increase in sales and a significant 31% rise in operating income, demonstrating resilience. The company also saw an increase in new orders by 9%, reaching $634.3 million, indicating potential for future revenue growth. Management highlighted ongoing operational excellence initiatives as a key focus area to mitigate impacts from market fluctuations and supply chain disruptions.

Financial Highlights

52 data points
Beta

Revenue

$559.46M

36.0% Gross Margin

Net Income

$40.69M

7.3% Net Margin

EPS (Diluted)

$1.05

Total Assets

$4.09B

Cash & Equivalents

$136.68M

Free Cash Flow

-$135.21M

Financial Statements
Beta
Revenue$559.46M
Cost of Revenue$358.06M
Gross Profit$201.40M
R&D Expenses$20.55M
Operating Income$60.51M
Interest Expense$9.53M
Net Income$40.69M
EPS (Basic)$1.06
EPS (Diluted)$1.05
Shares Outstanding (Basic)38.46M
Shares Outstanding (Diluted)38.67M

Key Highlights

  • 1Total net sales decreased by 6% to $559.5 million in Q1 2022 compared to $597.1 million in Q1 2021.
  • 2Net earnings decreased by 32% to $40.7 million in Q1 2022, with diluted EPS at $1.05, down from $1.45 in the prior year.
  • 3The Defense Electronics segment experienced a significant sales decline of 21%, and the Naval & Power segment saw a 4% decrease in sales.
  • 4The Aerospace & Industrial segment was a bright spot, with sales up 6% and operating income up 31%.
  • 5New orders increased by 9% to $634.3 million in Q1 2022, suggesting a positive outlook for future revenue.
  • 6The company repurchased $18.9 million of its common stock during the quarter, continuing its capital return program.

Frequently Asked Questions

The primary drivers for the decrease in net earnings were lower sales in the Defense Electronics and Naval & Power segments. This was attributed to factors such as unfavorable overhead absorption on lower sales, unfavorable mix in certain markets, and the timing of orders, particularly in defense-related areas impacted by supply chain headwinds and budget timing.

The Aerospace & Industrial segment demonstrated the strongest performance, with a 6% increase in sales and a significant 31% rise in operating income. This growth was driven by higher demand in commercial aerospace and general industrial markets.

Curtiss-Wright's liquidity appears robust. The company ended the quarter with $136.7 million in cash and cash equivalents and had $267 million in unused borrowing capacity under its revolving credit facility. Management believes its cash flow from operations, available borrowings, and ability to raise additional capital are sufficient to meet its short-term and long-term capital needs.

New orders increased by 9% to $634.3 million in the first quarter of 2022 compared to the prior year. This increase, particularly in the Aerospace & Industrial and Naval & Power segments, suggests a positive trend and potential for future revenue growth, despite ongoing supply chain challenges that impacted order timing in the Defense Electronics segment.