Curtiss-Wright (CW) 8-K Curtiss-wright Reports 2005 Third Quarter and Nine Month Financial Results

	FOR IMMEDIATE RELEASE

CURTISS-WRIGHT REPORTS 2005 THIRD QUARTER AND NINE
MONTH FINANCIAL RESULTS

-   - -

Sales Increased 15%, Operating Income 27%, and Net Earnings 19% in the Third Quarter
of 2005, Respectively;

Backlog at Record Level

ROSELAND, NJ – October 27, 2005 –Curtiss-Wright Corporation (NYSE: CW) today reports financial results for the third quarter and nine months ended September 30, 2005. The highlights are as follows:

Third Quarter 2005 Operating Highlights

Ÿ	Net sales for the third quarter of 2005 increased 15% to $271.4 million from $236.6 million in the third quarter of 2004.
Ÿ	Operating income in the third quarter of 2005 increased 27% to $32.4 million from $25.5 million in the third quarter of 2004. In the third quarter of 2004, the Company incurred approximately $1.3 million of costs related to compliance with Sarbanes-Oxley Section 404.
Ÿ	Net earnings for the third quarter of 2005 increased 19% to $17.5 million, or $0.80 per diluted share, from $14.7 million, or $0.68 per diluted share, in the third quarter of 2004. The increase in the 2005 third quarter net earnings included a $1.1 million after-tax increase in interest expense (approximately $0.05 per diluted share). The net earnings for the third quarter of 2004 include a tax benefit of $0.6 million (approximately $0.03 per diluted share).
Ÿ	New orders received in the third quarter of 2005 were $277.2 million, up 16% compared to the third quarter of 2004.

Nine Months 2005 Operating Highlights

Ÿ Net sales for the first nine months of 2005 increased 21% to $813.0 million from $673.9 million in the first nine months of 2004.

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Ÿ	Operating income in the first nine months of 2005 increased 22% to $93.1 million from $76.0 million in the first nine months of 2004. Operating income in the first nine months of 2005 includes a gain of $2.8 million related to the sale of non-operating property. In the first nine months of 2004, the Company incurred approximately $1.7 million of costs related to compliance with Sarbanes-Oxley Section 404.
Ÿ	Net earnings for the first nine months of 2005 increased 12% to $50.0 million, or $2.28 per diluted share, from $44.7 million, or $2.08 per diluted share in the first nine months of 2004. The increase in the 2005 net earnings included a $3.5 million after-tax increase in interest expense (approximately $0.16 per diluted share).
Ÿ	New orders received in the first nine months of 2005 were $888.0 million, up 30% compared to the first nine months of 2004. At September 30, 2005, backlog increased 20% to a new record high of $752.1 million from $627.7 million at December 31, 2004.

“We are pleased to report higher sales, operating income, and net earnings for the third quarter and first nine months of 2005,” commented Martin R. Benante, Chairman and CEO of Curtiss-Wright Corporation. “Our new orders were strong for the first nine months of 2005 and our backlog is at a new record level, which provides us with good momentum for the rest of the year and into 2006. We experienced strong overall organic growth in sales and operating income of 8% and 19%, respectively, in the first nine months of 2005. Our strong organic sales growth occurred primarily in the oil and gas and commercial and defense aerospace markets. Many of our military programs are progressing through the procurement cycle and we expect a ramp-up in the fourth quarter of this year. In addition, we continue to progress on several developmental contracts that should provide us future opportunities with improved profitability. We are continuing to integrate our acquisitions and these integration efforts are beginning to improve profitability that is expected to continue throughout the remainder of the year and into the future.” 

Sales

Sales growth in 2005 for the three and nine months ended September 30, 2005 compared to 2004 was achieved through a combination of organic growth in some of our base businesses and the contributions from our 2004 and 2005 acquisitions. Overall organic growth was 8% for both the three and nine months ended September 30, 2005 over the prior year periods. This organic sales growth was led by our Metal Treatment segment, which experienced strong organic growth of 11%, followed by our Motion Control and Flow Control segments at 7% and 6%, respectively, for the first nine months of 2005. Acquisitions made since June 30, 2004 contributed $17.3 million and $84.8 million in incremental sales for the quarter and nine months ended September 30, 2005, respectively, over the comparable prior year periods.

In our base businesses, higher sales from our Metal Treatment segment of global shot peening services, higher sales from our Motion Control segment to the military aerospace, global commercial aerospace OEM and repair and overhaul, and general industrial markets, and higher

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sales from our Flow Control segment to the oil and gas market, all contributed to the organic growth in the first nine months of 2005. In addition, foreign currency translation favorably impacted sales by $0.2 million and $4.5 million for the three and nine months ended September 30, 2005, as compared to the prior year periods.

Operating Income

Operating income for the three and nine months ended September 30, 2005 increased 27% and 22%, respectively, over the 2004 prior year periods. The increases were due to higher sales volumes and previously implemented cost control initiatives. Our consolidated operating income margins were 12.0% and 11.5% for the three and nine months ended September 30, 2005, respectively, an improvement over the comparable prior year periods. Overall, organic operating income organic growth was 28% and 19% for the three and nine months ended September 30, 2005, respectively, compared to the prior year periods. All three operating segments experienced strong organic operating income growth, led by our Metal Treatment segment, at 28% and 19% for the three and nine months ended September 30, 2005, respectively, over the prior year periods. Operating income for the nine months ended September 30, 2005 includes a gain of $2.8 million related to the sale of non-operating property. The higher segment operating income was partially offset by higher pension expense from the Curtiss-Wright Pension Plans of $0.2 million and $1.1 million for the three and nine months ended September 30, 2005, respectively, over the comparable prior year periods. In addition, foreign currency translation favorably impacted operating income by $0.1 million and $0.9 million for the three and nine months ended September 30, 2005, respectively, compared to the prior year periods.

Net Earnings

Net earnings increased 19% and 12% for the three and nine months ended September 30, 2005, respectively, over the comparable prior year periods. The improvement was due to strong operating income from our business segments, which increased $6.6 million and $14.3 million for the three and nine months ended September 30, 2005, respectively, over the prior year periods. Curtiss-Wright achieved strong growth in the oil and gas, shot peening, military aerospace, and commercial power generation markets. Higher interest expense, due to both higher debt levels and higher interest rates, lowered net earnings in the third quarter and first nine months of 2005 by $1.1 million and $3.5 million, respectively.

Segment Performance

Flow Control – Sales for the third quarter of 2005 were $112.1 million, up 19% over the comparable period last year due to solid organic growth and the contributions from the 2004 acquisitions. Sales from the base businesses increased 10% in the third quarter of 2005 as compared to the prior year period. The organic sales growth was primarily from higher sales to the oil and gas market, led by higher demand for the Coker valve products, and higher sales of valves

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and development contract work to the U.S. Navy. The improvement was partially offset by lower sales of electromechanical pump products to the U.S. Navy due to the timing of customer driven delivery schedules. Sales of this business segment also benefited from favorable foreign currency translation of $0.3 million in the third quarter of 2005 compared to the prior year period.

Operating income for this segment increased 40% in the third quarter of 2005 compared to the prior year period mainly due to the strong organic operating income growth of 32%. The improvement was due to the higher sales volume and favorable sales mix for our oil and gas products, previously implemented cost control initiatives, higher sales volume for our valve products to the U.S. Navy, and the contributions from the 2004 acquisitions.

Motion Control – Sales for the third quarter of 2005 of $110.2 million increased 13% over last year, principally due to organic growth and the contributions from the 2004 and 2005 acquisitions. Sales from the base businesses increased 4% in the third quarter of 2005 as compared to the prior year period. This organic sales growth was due primarily to higher sales of OEM and spares products and repair and overhaul services to the commercial aerospace market and increased F/A-22 production and F-16 spares sales to the military aerospace market, as compared to the prior year period. Partially offsetting these increases are lower sales of embedded computing products to the aerospace and ground defense markets. Foreign currency translation had minimal negative impact on sales for the third quarter of 2005 as compared to the prior year period.

Operating income for this segment increased 8% for the third quarter of 2005 compared to the prior year period mainly due to the strong organic operating income growth of 15%. The increase was driven primarily by higher sales volume mentioned above and previously implemented cost control initiatives. The improvement was partially offset by cost overruns on certain military contract work, mainly for the 767 Tanker program.

Metal Treatment – Sales for the third quarter of 2005 of $49.0 million were 10% higher than the comparable period last year. The improvement, all of which was organic, was driven by higher global shot peening revenues from the aerospace market. In addition, sales for the coatings division also increased due to improved economic conditions. Foreign currency translation negatively impacted sales by $0.1 million in the third quarter of 2005 as compared to the prior year period.

Operating income increased 27% for the third quarter of 2005 as compared to the prior year period, primarily as a result of the higher sales volume and lower medical insurance costs.

Mr. Benante concluded, “In 2005, we continue to demonstrate our ability to generate long-term shareholder value by growing our sales and earnings. Our historical performance has demonstrated our ability to execute our strategy and achieve our financial targets. Our strong performance in 2005 continues this trend as we have grown operating profit at a pace greater than our sales. We expect the fourth quarter of 2005 to be strong as many of our defense programs ramp up, our commercial markets continue to strengthen, and we realize the benefits of integration efforts. Our diversification strategy and emphasis on new technologies, many of which are only at the

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beginning of their life cycles, should continue to generate growth opportunities in each of our three business segments for the remainder of 2005 and beyond.”

2005 Management Guidance

We are tightening our full year 2005 guidance range to reflect current market conditions. We expect to achieve revenues in the range of $1,100 million to $1,125 million, operating income in the range of $135 - $140 million, which includes $2 million of pension expense from the Curtiss-Wright Pension Plans, and earnings per share in the range of $3.30 to $3.45 per share. Events occurred in the third quarter which will impact our annual results. First is the Boeing strike. Second is a procurement decision by the U.S. Navy to only acquire one new Recovery Assist, Secure and Traverse (RAST) system in 2005. Previously, the U.S. Navy had indicated that three new systems would be purchased in 2005 which we included in our previous guidance. The revised guidance above reflects the expected impact of these two previously unforeseen events.

This guidance reflects our expectations of 15-20% growth in revenue, 20-25% growth in operating income, and 10 – 15% growth in EPS. EPS guidance is based on estimated fully diluted shares outstanding of 22 million for the full year 2005. Full year free cash flow (cash flow from operating activities less capital expenditures) is expected to be between $40 and $50 million for 2005.

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The Company will host a conference call to discuss the third quarter 2005 results at 9:00 EST Friday, October 28, 2005. A live webcast of the call can be heard on the Internet by visiting the company’s website at www.curtisswright.com and clicking on the investor information page or by visiting other websites that provide links to corporate webcasts.

(Tables to Follow)

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Change						Nine Months Change
	2005			2004			2005			2004			$			%			$			%
Net sales	$	271,355		$	236,574		$	813,035		$	673,935		$	34,781			14.70	%	$	139,100			20.64	%
Cost of sales		177,840			154,725			533,452			444,469			23,115			14.94	%		88,983			20.02	%
Gross profit		93,515			81,849			279,583			229,466			11,666			14.25	%		50,117			21.84	%
Research & development expenses		8,504			8,443			30,312			24,409			61			0.72	%		5,903			24.18	%
Selling expenses		16,738			17,413			51,633			44,760			(675	)		-3.88	%		6,873			15.36	%
General and administrative expenses		35,046			30,033			105,015			83,071			5,013			16.69	%		21,944			26.42	%
Environmental remediation and administrative    expenses, net		188			200			844			491			(12	)		-6.00	%		353			71.89	%
Pension expense, net		500			295			1,500			377			205			69.49	%		1,123			297.88	%
Loss (Gain) on sale of real estate and fixed assets.		98			(6	)		(2,827	)		311			104			-1733.33	%		(3,138	)		1009.00	%
Operating income		32,441			25,471			93,106			76,047			6,970			27.36	%		17,059			22.43	%
Other income (expenses), net		279			179			(421	)		300			100			55.87	%		(721	)		-240.33	%
Interest expense		(4,912	)		(3,135	)		(13,993	)		(8,418	)		(1,777	)		56.68	%		(5,575	)		66.23	%
Earnings before income taxes		27,808			22,515			78,692			67,929			5,293			23.51	%		10,763			15.84	%
Provision for income taxes		10,289			7,795			28,716			23,276			2,494			31.99	%		5,440			23.37	%
Net earnings	$	17,519		$	14,720		$	49,976		$	44,653		$	2,799			19.02	%	$	5,323			11.92	%
Basic earnings per share	$	0.81		$	0.69		$	2.31		$	2.11
Diluted earnings per share	$	0.80		$	0.68		$	2.28		$	2.08
Dividends per share	$	0.09		$	0.09		$	0.27		$	0.27
Weighted average shares outstanding:
Basic		21,688			21,359			21,603			21,122
Diluted		21,973			21,715			21,890			21,476

Certain prior year information has been reclassified to conform to current presentation.

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)

	September 30, 2005			December 31, 2004			Change
							$			%
Assets
Current Assets:
Cash and cash equivalents	$	47,685		$	41,038		$	6,647		16.2	%
Receivables, net		245,437			214,084			31,353		14.6	%
Inventories, net		147,862			115,979			31,883		27.5	%
Deferred income taxes		26,157			25,693			464		1.8	%
Other current assets		9,922			12,460			(2,538	)	-20.4	%
Total current assets		477,063			409,254			67,809		16.6	%
Property, plant, and equipment, net		268,224			265,243			2,981		1.1	%
Prepaid pension costs		76,339			77,802			(1,463	)	-1.9	%
Goodwill, net		391,623			364,313			27,310		7.5	%
Other intangible assets, net		157,707			140,369			17,338		12.4	%
Other assets		14,226			21,459			(7,233	)	-33.7	%
Total Assets	$	1,385,182		$	1,278,440		$	106,742		8.3	%
Liabilities
Current Liabilities:
Short-term debt	$	909		$	1,630		$	(721	)	-44.2	%
Accounts payable		65,979			65,364			615		0.9	%
Accrued expenses		58,766			63,413			(4,647	)	-7.3	%
Income taxes payable		19,317			13,895			5,422		39.0	%
Other current liabilities		41,379			52,793			(11,414	)	-21.6	%
Total current liabilities		186,350			197,095			(10,745	)	-5.5	%
Long-term debt		409,060			340,860			68,200		20.0	%
Deferred income taxes		49,050			40,043			9,007		22.5	%
Accrued pension & other postretirement benefit costs		73,795			80,612			(6,817	)	-8.5	%
Long-term portion of environmental reserves		22,829			23,356			(527	)	-2.3	%
Other liabilities		26,686			20,860			5,826		27.9	%
Total Liabilities		767,770			702,826			64,944		9.2	%
Stockholders’ Equity
Common stock, $1 par value		25,493			16,646			8,847		53.1	%
Class B common stock, $1 par value		—			8,765			(8,765	)	-100.0	%
Additonal paid in capital		59,699			55,885			3,814		6.8	%
Retained earnings		645,195			601,070			44,125		7.3	%
Unearned portion of restricted stock		(17	)		(34	)		17		-50.0	%
Accumulated other comprehensive income		23,218			36,797			(13,579	)	-36.9	%
		753,588			719,129			34,459		4.8	%
Less: cost of treasury stock		136,176			143,515			(7,339	)	-5.1	%
Total Stockholders’ Equity		617,412			575,614			41,798		7.3	%
Total Liabilities and Stockholders’ Equity	$	1,385,182		$	1,278,440		$	106,742		8.3	%

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CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)

	Three Months Ended September 30,									Nine Months Ended September 30,
	2005			2004			% Change			2005			2004			% Change
Sales:
Flow Control	$	112,126		$	94,204			19.0	%	$	335,863		$	269,804			24.5	%
Motion Control		110,242			97,727			12.8	%		328,180			272,649			20.4	%
Metal Treatment		48,987			44,643			9.7	%		148,992			131,482			13.3	%
Total Sales	$	271,355		$	236,574			14.7	%	$	813,035		$	673,935			20.6	%
Operating Income:
Flow Control	$	13,800		$	9,845			40.2	%	$	36,905		$	28,930			27.6	%
Motion Control		11,203			10,417			7.5	%		30,331			28,731			5.6	%
Metal Treatment		8,618			6,805			26.6	%		25,547			20,821			22.7	%
Total Segments		33,621			27,067			24.2	%		92,783			78,482			18.2	%
Pension Expense		(500	)		(295	)		69.5	%		(1,500	)		(377	)		297.9	%
Corporate & Other		(680	)		(1,301	)		-47.7	%		1,823			(2,058	)		-188.6	%
Total Operating Income	$	32,441		$	25,471			27.4	%	$	93,106		$	76,047			22.4	%
Operating Margins:
Flow Control		12.3	%		10.5	%					11.0	%		10.7	%
Motion Control		10.2	%		10.7	%					9.2	%		10.5	%
Metal Treatment		17.6	%		15.2	%					17.1	%		15.8	%
Total Curtiss-Wright		12.0	%		10.8	%					11.5	%		11.3	%

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About Curtiss-Wright

Curtiss-Wright Corporation is a diversified company headquartered in Roseland, New Jersey. The Company designs, manufactures and overhauls products for motion control and flow control applications and provides a variety of metal treatment services. The firm employs approximately 5,900 people. More information on Curtiss-Wright can be found at www.curtisswright.com.

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Certain statements made in this release, including statements about future revenue, organic revenue growth, annual revenue, net income, organic operating income growth, future business opportunities, and cost saving initiatives, and future cash flow from operations, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004 and subsequent reports filed with the Securities and Exchange Commission.

This press release and additional information is available at www.curtisswright.com.

Contact: Alexandra M. Deignan   
(973) 597-4734           
adeignan@curtisswright.com