10-QPeriod: Q3 FY2023

CURTISS WRIGHT CORP Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 2, 2023For Securities:CW

Summary

Curtiss-Wright Corporation reported strong financial results for the third quarter and the first nine months of 2023, demonstrating significant revenue and earnings growth across its key segments. Total net sales increased by 15% year-over-year for the quarter and 14% for the nine-month period, driven by robust performance in Aerospace & Industrial, Defense Electronics, and Naval & Power segments. The company's operational efficiency is highlighted by a notable increase in operating income, up 23% for the quarter and 22% for the nine months, with a corresponding expansion in operating margins, particularly in the Defense Electronics segment. Key drivers for this growth include strong demand in defense markets, continued recovery in commercial aerospace, and increased activity in power and process sectors. The company also benefited from the positive impact of acquisitions and favorable overhead absorption. While facing some headwinds like unfavorable naval contract adjustments and product mix in certain areas, the overall financial health appears robust. The balance sheet shows solid liquidity, with substantial cash and cash equivalents and significant availability under its credit facility, supporting continued investment in growth and returns to shareholders.

Financial Highlights

54 data points
Beta

Revenue

$724.33M

38.9% Gross Margin

Net Income

$96.78M

13.4% Net Margin

EPS (Diluted)

$2.51

Total Assets

$4.41B

Cash & Equivalents

$148.81M

Free Cash Flow

$136.99M

Financial Statements
Beta
Revenue$724.33M
Cost of Revenue$442.86M
Gross Profit$281.47M
R&D Expenses$23.46M
Operating Income$132.52M
Interest Expense$12.50M
Net Income$96.78M
EPS (Basic)$2.53
EPS (Diluted)$2.51
Shares Outstanding (Basic)38.28M
Shares Outstanding (Diluted)38.56M

Key Highlights

  • 1Total net sales grew 15% year-over-year in Q3 2023 to $724.3 million, and 14% for the nine months to $2.06 billion.
  • 2Operating income increased significantly by 23% in Q3 2023 to $132.5 million and 22% for the nine months to $323.9 million.
  • 3The Defense Electronics segment showed exceptional growth, with sales up 34% in Q3 and operating income up 54%.
  • 4Aerospace & Defense markets accounted for 68% of total net sales in Q3 2023, demonstrating the company's strategic focus.
  • 5The company has sufficient liquidity, with $148.8 million in cash and cash equivalents and $728 million in unused credit availability as of September 30, 2023.
  • 6Dividend payments increased, with a quarterly dividend of $0.20 per share, reflecting commitment to shareholder returns.
  • 7New orders remain strong, increasing 3% in Q3 and 8% for the nine months, indicating continued demand across segments.

Frequently Asked Questions

Curtiss-Wright's revenue growth is primarily driven by strong demand across its key end markets, including Aerospace & Defense, Defense Electronics, and Naval & Power. The company has seen increased demand in tactical battlefield communications, embedded computing, flight test instrumentation, commercial aerospace actuation and sensors, and industrial valves for the power and process markets.

Curtiss-Wright repaid $203 million of its 2013 Notes in February 2023. As of September 30, 2023, the company had $1.05 billion in long-term debt and significant unused credit availability of $728 million under its credit facility, indicating a healthy liquidity position and the capacity to manage its debt obligations while supporting future growth initiatives.

While the report highlights strong performance, potential challenges include unfavorable naval contract adjustments and product mix in the Naval & Power segment. Additionally, like many global companies, Curtiss-Wright is subject to market fluctuations, supply chain disruptions, and economic conditions, as noted in the forward-looking statements section.

Curtiss-Wright returns capital to shareholders through dividends and share repurchases. The company increased its quarterly dividend to $0.20 per share and repurchased approximately 0.2 million shares of common stock for $37 million during the first nine months of 2023.