SECURITIES and EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
Commission File Number 1-134
CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-0612970
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Wall Street West
Lyndhurst, New Jersey 07071
(Address of principal executive offices) (Zip Code)
(201) 896-8400
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $1.00 per share: 10,203,724 shares (as of July 31, 1998)
Page 1 of 41
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
TABLE of CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Stockholders' Equity 6
Notes to Consolidated Financial Statements 7 - 11
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 15
Forward-Looking Statements 16
PART II - OTHER INFORMATION
Item 5 - Other Information 17
Item 6 - Exhibits and Reports on Form 8-K 18
-2-
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
June 30, December 31,
1998 1997
Assets:
Cash and cash equivalents $ 9,495 $ 6,872
Short-term investments 64,608 61,883
Receivables, net 44,433 41,590
Deferred tax asset 8,191 8,806
Inventories 51,232 49,723
Other current assets 2,241 2,506
----------- -----------
Total current assets 180,200 171,380
----------- -----------
Property, plant and equipment, at cost 226,736 219,587
Less, accumulated depreciation 157,682 153,704
----------- -----------
Property, plant and equipment, net 69,054 65,883
Prepaid pension costs 40,621 38,674
Other assets 9,684 8,771
---------- -----------
Total assets $299,559 $284,708
========== ===========
Liabilities:
Accounts payable and accrued expenses $ 25,139 $ 24,540
Dividends payable 1,323
Income taxes payable 4,916 4,845
Other current liabilities 9,187 9,244
----------- -----------
Total current liabilities 40,565 38,629
----------- -----------
Long-term debt 10,347 10,347
Deferred income taxes 9,405 8,799
Other liabilities 22,136 22,080
---------- ----------
Total liabilities 82,453 79,855
---------- ----------
Stockholders' equity:
Common stock, $1 par value 15,000 15,000
Capital surplus 51,241 52,010
Retained earnings 330,133 318,474
Unearned portion of restricted stock (198) (342)
Accumulated other comprehensive
income (3,377) (3,289)
---------- -----------
392,799 381,853
Less, cost of treasury stock 175,693 177,000
--------- ---------
Total stockholders' equity 217,106 204,853
--------- ---------
Total liabilities and stockholders' equity $299,559 $284,708
========= ========
See notes to consolidated financial statements.
-3-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of EARNINGS
(UNAUDITED)
(In thousands except per share data)
Six Months Ended Three Months Ended
June 30, June 30,
------------------------- ------------------
1998 1997 1998 1997
---- ---- ---- ----
Net sales $120,251 $107,560 $59,405 $54,412
Cost of sales 80,380 71,791 37,656 35,287
---------- ---------- -------- --------
Gross margin 39,871 35,769 21,749 19,125
Research and development costs 591 946 286 348
Selling expenses 4,856 3,936 2,551 2,001
General and administrative 14,714 15,627 7,846 7,746
--------- ---------- --------- ---------
Operating income 19,710 15,260 11,066 9,030
Investment income, net 1,581 1,848 502 1,210
Rental income, net 1,763 1,741 850 801
Other income (expense), net 79 (251) (20) (144)
Interest expense 185 189 96 116
------------ ---------- ----------- ---------
Earnings before taxes 22,948 18,409 12,302 10,781
Provision for taxes 8,642 6,404 4,601 3,731
---------- ---------- --------- ---------
Net earnings $ 14,306 $ 12,005 $ 7,701 $ 7,050
========= ========= ======== =======
Weighted average number of
common shares outstanding 10,187 10,170 10,187 10,170
====== ====== ====== ======
Basic earnings per common share $1.40 $1.18 $0.76 $0.69
===== ===== ===== =====
Diluted earnings per common share $1.38 $1.17 $0.75 $0.69
===== ===== ===== =====
Dividends per common share $0.130 $0.125 $0.130 $0.125
====== ====== ====== ======
See notes to consolidated financial statements.
-4-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS
(UNAUDITED)
(In thousands)
Six Months Ended
June 30,
1998 1997
Cash flows from operating activities:
Net earnings $14,306 $12,005
------- -------
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 4,881 4,948
Net gains on short-term investments (170) (1,070)
Increase in deferred taxes 1,221 14
Changes in operating assets and liabilities:
Proceeds from sales of trading securities 197,151 135,263
Purchases of trading securities (197,895) (136,621)
Increase in receivables (2,218) (4,636)
(Increase) decrease in inventory 86 (1,603)
Decrease in progress payments (2,220) (1,684)
Increase (decease) in accounts payable
and accrued expenses 599 (253)
Increase in income taxes payable 71 2,672
Increase in other assets (3,027) (1,252)
Decrease in other liabilities (1,812) (873)
Other, net 1,381 (1,411)
--------- ---------
Total adjustments (1,952) (6,506)
--------- ---------
Net cash provided by operating activities 12,354 5,499
--------- ---------
Cash flows from investing activities:
Proceeds from sales of real estate and equipment 280 18
Additions to property, plant and equipment (2,581) (5,911)
Acquisition of Alpha Heat Treaters business (6,106)
--------- ---------
Net cash used by investing activities (8,407) (5,893)
--------- ---------
Cash flows from financing activities:
Dividends paid (1,324) (1,271)
--------- ----------
Net cash used by financing activities (1,324) (1,271)
--------- ----------
Net increase (decrease) in cash and cash
equivalents 2,623 (1,665)
Cash and cash equivalents at beginning of period 6,872 6,317
--------- ---------
Cash and cash equivalents at end of period $ 9,495 $ 4,652
========= =========
See notes to consolidated financial statements.
-5-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands)
Unearned Accumulated
Portion of Other
Common Capital Retained Restricted Comprehensive Treasury
Stock Surplus Earnings Stock Awards Income Stock
December 31, 1996 $10,000 $57,127 $299,740 $(608) $(1,506) $181,390
Net earnings 27,885
Common dividends (5,137)
Stock dividend (two for one split) 5,000 (5,000) (4,014) (4,014)
Stock options exercised, net (117) (376)
Amortization of earnings portion
of restricted stock 266
Translation adjustments, net (1,783)
-------- -------- --------- ------ -------- ---------
December 31, 1997 15,000 52,010 318,474 (342) (3,289) 177,000
Net earnings 14,306
Common dividends (2,647)
Stock options exercised, net (769) (1,307)
Amortization of earned portion
of restricted stock 144
Translation adjustment, net (88)
-------- --------- --------- ------ -------- ----------
June 30, 1997 $15,000 $51,241 $330,133 $(198) $(3,377) $175,693
======== ========= ========= ====== ======== ==========
See notes to consolidated financial statements.
-6-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS of PRESENTATION
Curtiss-Wright Corporation (the "Corporation") is a diversified
multi-national manufacturing and service concern that designs,
manufactures and overhauls precision components and systems and
provides highly engineered services to the aerospace, automotive,
shipbuilding, oil, petrochemical, agricultural equipment, power
generation, metal working and fire & rescue industries. The
Corporation's principal operations include four domestic manufacturing
facilities, thirty-five metal treatment service facilities located in
North America and Europe, and five component overhaul locations.
The information furnished in this report has been prepared in
conformity with generally accepted accounting principles and as such
reflects all adjustments, consisting primarily of normal recurring
accruals, which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented. The
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Corporation's 1997 Annual Report on Form 10-K.
The results of operations for these interim periods are not necessarily
indicative of the operating results for a full year. Certain
reclassifications of prior year amounts have been made in order to
conform to the current presentation.
2. ACQUISITIONS
On April 30, 1998, the Corporation purchased the Alpha Heat Treaters
("Alpha") division of Alpha-Beta Industries, Inc. Alpha services a
broad spectrum of customers from its York, Pennsylvania location and
provides a number of metal treating processes including carburizing,
surface hardening, stress relieving, induction hardening and black
oxide surface treatment services. The Corporation acquired the net
assets of Alpha for approximately $6.1 million in cash and has
accounted for the acquisition as a purchase. The excess of purchase
price over the fair value of the net assets is approximately $1.0
million and is expected to be amortized over 25 years. The fair value
of the net assets acquired was based on preliminary estimates and may
be revised at a later date.
Subsequent Event
On July 31, 1998, the Corporation purchased the assets of Enertech, LLC
(Enertech) which distributes, represents and manufactures a number of
products for sale into commercial nuclear power plants, both
domestically and internationally. Enertech also provides a broad range
of overhaul and maintenance services for such plants from its two
principal locations in Brea, California and Suwanne, Georgia. Enertech
has annual sales of about $25.0 million. The Corporation acquired the
net assets of Enertech for approximately
-7-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
$15.0 million in cash and will account for the acquisition as a
purchase in the third quarter of 1998. The excess of the purchase price
over the fair value of the net assets acquired will be recorded as
goodwill.
3. RECEIVABLES
Receivables, at June 30, 1998 and December 31, 1997, include amounts
billed to customers and unbilled charges on long-term contracts
consisting of amounts recognized as sales but not billed at the dates
presented. Substantially all amounts of unbilled receivables are
expected to be billed and collected within a year. The composition of
receivables for those periods is as follows:
(In thousands)
June 30, December 31,
1998 1997
Accounts receivable, billed $50,881 $49,110
Less: progress payments applied 10,614 10,460
-------- --------
40,267 38,650
-------- --------
Unbilled charges on long-term
contracts 13,367 13,022
Less: progress payments applied 7,556 8,335
-------- --------
5,811 4,687
--------- ---------
Allowance for doubtful accounts (1,645) (1,747)
--------- ---------
Receivables, net $44,433 $41,590
======= =======
4. INVENTORIES
Inventories are valued at the lower of cost (principally average cost)
or market. The composition of inventories at June 30, 1998 and December
31, 1997 is as follows:
-8-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
(In thousands)
June 30, December 31,
1998 1997
Raw materials $ 6,829 $ 5,514
Work-in-process 20,891 22,686
Finished goods 22,550 21,782
Inventoried costs related to U.S.
Government and other long-term
contracts 5,173 5,547
--------- ---------
Total inventories 55,443 55,529
Less: progress payments applied,
principally related to long-term
contracts 4,211 5,806
--------- ---------
Net inventories $51,232 $49,723
======= =======
5. ENVIRONMENTAL MATTERS
The Corporation establishes a reserve for a potential environmental
responsibility when it concludes that a determination of legal
liability is probable. Such amounts, if quantified, reflect the
Corporation's estimate of the amount of that liability. If only a range
of potential liability can be estimated, a reserve will be established
at the low end of that range. Such reserves represent today's values of
anticipated remediation not reduced by any potential recovery from
insurance carriers or through contested third-party legal actions, and
are not discounted for the time value of money.
The Corporation is joined with many other corporations and
municipalities as potentially responsible parties (PRPs) in a number of
environmental cleanup sites, which include the Sharkey Landfill
Superfund Site, Parsippany, N. J., Caldwell Trucking Company Superfund
Site, Fairfield, N. J., and Pfohl Brothers Landfill Site, Cheektowaga,
N. Y., identified to date as the most significant sites. Other
environmental sites in which the Corporation is involved include but
are not limited to Chemsol, Inc. Superfund Site, Piscataway, N. J., and
PJP Landfill, Jersey City, N. J.
The Corporation believes that the outcome of any of these matters would
not have a material adverse effect on the Corporation's results of
operations or financial condition.
-9-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
6. COMPREHENSIVE INCOME
Effective January 1, 1998, the Corporation adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" (SFAS No. 130). SFAS No. 130 establishes standards for
reporting and displaying changes in equity from non-owner sources.
Total comprehensive income for the six months ended June 30, 1998 and
1997 is as follows:
(In thousands)
June 30, June 30,
1998 1997
Net earnings $14,306 $12,005
-------- --------
Equity adjustments from foreign
currency translations (88) (1,983)
Proforma tax effects (31) (694)
-------- --------
Net adjustments (57) (1,289)
-------- --------
Total comprehensive income $14,249 $10,716
======== ========
7. EARNINGS PER SHARE
The Corporation accounts for its earnings per share (EPS) in accordance
with Statement of Financial Accounting Standards No. 128, "Earnings per
Share" (SFAS No. 128). Diluted earnings per share were computed based
on the weighted average number of shares outstanding plus all
potentially dilutive common shares issuable for the periods. Dilutive
common shares for the second quarters of 1998 and 1997 were 14 and 50,
respectively, and were 148 and 121 for the six months ended June 30,
1998 and 1997, respectively, consisting primarily of outstanding stock
options. Prior year earnings per share information has been restated to
reflect a 2 for 1 stock split paid December 23, 1997.
8. RECENTLY ISSUED ACCOUNTING STANDARDS
On June 15, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivatives and Hedging Activities" (SFAS No. 133). SFAS No. 133 is
effective for all fiscal quarters of all fiscal years beginning after
June 15, 1999 (January 1, 2000 for the Corporation). SFAS No. 133
requires that all derivative instruments be
-10-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
recorded on the balance sheet at their fair value. Changes in the fair
value of derivatives are recorded each period in current earnings or
other comprehensive income, depending on whether a derivative is
designated as part of a hedge transaction and, if it is, the type of
hedge transaction. Management of the Corporation anticipates that, due
to its limited use of derivative instruments, the adoption of SFAS No.
133 will not have a significant effect on its results of operations or
its financial position.
-11-
PART I - ITEM 2
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS
RESULTS of OPERATIONS
Curtiss-Wright posted net earnings for the second quarter of 1998
totaling $7.7 million, or $.75 per diluted share, 9% above net earnings reported
for the second quarter of 1997. In the aggregate, operating earnings totaled
$11.1 million for the second quarter of 1998, a 23% increase over the same
quarter of last year. Sales totaled $59.4 million for the 1998 second quarter
compared with sales of $54.4 million for the prior year period. New orders
received during the 1998 period also increased, reaching $59.8 million, compared
with orders of $53.4 million received in the same period of 1997. Increases in
sales, new orders, and net earnings reflect the continued improvements generated
by our business segments.
For the first six months of 1998 Curtiss-Wright posted consolidated net
earnings of $14.3 million, or $1.38 per share, a 19% improvement as compared
with net earnings of $12.0 million, or $1.17 per share, posted for the first six
months of 1997. Sales for the 1998 first half were $120.3 million, 12% higher
than sales of $107.6 million posted for the first half of 1997. Operating income
rose 29%, to $19.7 million for the first six months of 1998, compared with
operating income of $15.3 million for the same 1997 period. New orders received
in the first half of 1998 totaled $116.7 million, compared with new orders of
$99.0 million received during the first half of 1997.
Operating Performance
The Corporation's metal-treating businesses achieved substantial
increases in sales for the second quarter of 1998 as compared with the same
period of 1997. These sales improvements reflect a continuing increase in the
number of applications for metal-treating services across a variety of worldwide
markets, a contribution from the recently acquired Alpha Heat Treaters business,
and newly opened facilities in Germany, England and the United States. For the
first six months of 1998, sales of metal-treating services increased 14% over
the first six-months of 1997. Operating income for these product lines also
improved over the prior year for both the second quarter and first half of 1998,
generally reflecting the improved sales in most markets served.
Sales of aerospace component overhaul and repair services for the
second quarter increased from the level posted for the same prior year period.
Despite the improvement, operating income for the period was on a par with the
prior year period. Over the first six-months of 1998, the Company's sales of
overhaul and repair services in the aggregate have improved 11% compared with
the prior year period, while operating income has declined, reflecting inventory
and related adjustments recorded in the first quarter of 1998.
-12-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
Sales generated by aerospace actuation product lines increased in the
second quarter of 1998, compared with the second quarter of 1997, primarily
reflecting the continued high level of original equipment manufactured (OEM)
products for the Boeing Company. Increases in sales of actuation components and
systems for commercial customers for the first six months of 1998 also reflect
Boeing's high production rates. In addition, sales of commercial actuation spare
parts showed considerable growth in both the second quarter and first six-month
periods of 1998 as compared with those same respective periods of 1997.
Operating income attributable to this commercial business increased as a result
of these sales increases. Sales of military actuation products declined in the
second quarter of 1998 reflecting the end of an F-16 Hill Air Force retrofit
shafts contract and lower foreign military sale procurements. Military sales for
the first half of 1998 benefited from the completion of "safety of flight
testing" on certain F-22 components, but sales of military programs overall
remained below first half 1997 levels. In the aggregate, operating income for
military OEM production programs declined for the three and six-month 1998
periods, the result of inefficiencies, higher-than-expected manufacturing costs,
inventory write-offs, and provisions for higher anticipated costs related to
development program test efforts.
The Corporation's valve product lines posted slight declines in sales
and operating income on a year-over-year basis for both the second quarter and
first half. These declines primarily reflect reduced sales of military valve
products on a comparative basis due, in part, to a test program during the first
quarter of 1997, that did not recur in 1998. Increased sales of commercial valve
products largely offset the decline in military product sales.
Non-Operating Revenues and Costs
For the second quarter of 1998, the Corporation recorded other
non-operating net revenue totaling $1.3 million, compared with $1.9 million for
the second quarter of 1997, reflecting a reduction in investment income.
Non-operating revenue totaled $3.4 million for the six-month 1998 period and
$3.3 million for the same 1997 period. Administrative expenses for the second
quarter and first half of 1998 and 1997 were reduced by accrued income generated
from the Corporation's overfunded pension plan. Net pension income totaled $1.8
million for the first half of both years.
-13-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
Acquisitions
As discussed in Note 2 to the Consolidated Financial Statements, the
Corporation purchased the Alpha Heat Treaters ("Alpha") division of Alpha-Beta
Industries, Inc., in April 1998 for approximately $6.0 million in cash. Alpha
services a broad spectrum of customers from its York, Pennsylvania location and
provides a number of metal treating processes including carburizing, surface
hardening, stress relieving, induction hardening and black oxide surface
treatment services. Alpha has annual sales of approximately $4.0 million.
Subsequent to the end of the second quarter of 1998, the Corporation
completed the purchase of the assets of Enertech, LLC, (Enertech). Enertech
distributes, represents, and manufactures a number of products for sale into
commercial nuclear power plants, both domestically and internationally, and
provides a broad range of overhaul and maintenance services for such plants. The
acquired operation generates annual sales of about $25.0 million from its two
principle locations in Brea, California and Suwanne, Georgia. The Corporation
acquired the net assets of Enertech for approximately $15.0 million in cash and
will account for the acquisition as a purchase in the third quarter of 1998.
CHANGES IN FINANCIAL CONDITION:
Liquidity and Capital Resources:
The Corporation's working capital was $139.6 million at June 30, 1998,
5% above working capital at December 31, 1997 of $132.8 million. The ratio of
current assets to current liabilities was 4.4 to 1 at June 30 1998, even with
the current ratio of at December 31, 1997. Cash, cash equivalents and short-term
investments totaled $74.1 million in aggregate at June 30, 1998, increasing from
$68.8 million at the prior year end.
Changes in working capital reflect an increase in accounts receivable
from trade customers largely due to the continued increase in sales. Net
unbilled receivables also increased at June 30, 1998, over the prior year-end,
due to a reduction in progress payments received on long-term valve contracts.
Net inventory also increased slightly as the result of reduction in offsetting
progress payments received during the first half of 1998. Working capital was
reduced by accrued dividends payable for the second quarter of 1998.
-14-
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
The Corporation continues to maintain its $22.5 million revolving
credit lending facility and its $22.5 million short-term credit agreement, which
provide additional sources of capital to the Corporation. The revolving credit
agreement, of which $11.0 million remains unused at June 30, 1998, encompasses
various letters of credit issued primarily in connection with outstanding
industrial revenue bonds. There were no cash borrowings during the first half of
1998 and no outstanding balances for borrowed funds under the agreement at June
30, 1998.
During the half of 1998, internally generated funds were adequate to
meet capital expenditures of $2.6 million. Expenditures incurred during the
first six months were primarily for machinery and equipment needed for the
expansion of our metal treating operations. Internally generated funds were also
used for the April 1998 purchase of Alpha Heat Treaters, and to purchase the
assets of Enertech, LLC, on July 31, 1998, as detailed above. Approximately $10
million of capital expenditures are anticipated for the balance of the year to
be used primarily for purchasing machinery and equipment for our operations. An
additional $.8 million of expenditures connected with environmental remediation
programs at the Corporation's Wood-Ridge, New Jersey Business Complex are
anticipated in the remaining six months of the year.
RECENTLY ISSUED ACCOUNTING STANDARDS:
As discussed in Note 7 to the Consolidated Financial Statements, the
Corporation is reviewing the requirements for the adoption of Statement of
Financial Accounting Standards No. 133, "Accounting for Derivatives and Hedging
Activities." It is anticipated that the statement will not have a material
effect on the Corporation's results of operations or financial condition due to
the limited use of derivative instruments. The statement is effective for the
Corporation beginning January 1, 2000.
YEAR 2000:
The Corporation continues to take steps to address its exposures
related to the impact on its computer systems of the year 2000. Modification of
key financial and operating systems are currently being effectuated. The
Corporation does not expect these system changes to have a material effect on
its consolidated financial position, results of operations or cash flows.
-15-
FORWARD-LOOKING STATEMENTS
Because forward-looking statements involve risks and uncertainties,
actual results may differ materially from those which are expressed or implied.
Such statements in this report include those contained in (a) environmental
costs referred to in the Environmental Matters note to the Consolidated
Financial Statements and in the Results of Operations portion of the Management
Discussion and Analysis ("MD&A") section hereof, (b) projections relative to the
costs of compliance with SFAS No. 133, referred to in a note to the Consolidated
Financial Statements and in the Results of Operations portion of the
Management's Discussion and Analysis section and (c) information relating to
future capital expenditures contained in the Changes in Financial Condition
portion of the MD&A section hereof. Important factors that could cause the
actual results to differ materially from those in these forward-looking
statements include, among other items, (i) unanticipated environmental
remediation expenses or claims; (ii) a reduction in anticipated orders; (iii) an
economic downturn; (iv) changes in the need for additional machinery and
equipment and/or in the cost for the expansion of the Corporation's operations;
(v) changes in the competitive marketplace and/or customer requirements; (vi) an
inability to perform customer contracts at anticipated cost levels and (vii)
other factors that generally affect the business of aerospace and industrial
companies.
-16-
PART II - OTHER INFORMATION
Item 5. OTHER INFORMATION
(a) On July 31, 1998, Curtiss-Wright Flow Control Corporation, a
wholly owned subsidiary of the Registrant, completed the
acquisiiton of privately-held Enertech, LLC. The transaction
was structured as an asset acquisition.
Enertech, headquartered in Brea, California, is a provider of
flow control equipment to the commercial nuclear power
industry. Enertech has annual sales of about $25.0 million.
The Company manufactures, represents and distributes flow
control products including advanced valves, actuators,
snubbers and hydraulic systems for sale into commercial
nuclear power plants both domestically and internationally.
Additionally, Enertech provides value-added services including
diagnostic testing, predictive maintenance, parts repair and
rebuilding, as well as training, engineering programs and
staff augmentation to reduce downtime and improve plant
efficiency. Enertech also serves the commercial hydraulics
industry through its Paul-Munroe Enertech (PME) division. The
Corportion acquired the Enertech assets for approximately
$15.0 million in cash. The business will retain the Enertech
and PME names, and its management team will remain in place to
continue to service customers from its principal locations in
Brea, California and Suwanee, Georgia. The acquired business
unit will be a division of Curtiss-Wright Flow Control
Corporation.
(b) In the event a shareholder proposal is intended to be
presented at the Corporation's 1999 Annual Meeting of
Shareholders and inclusion has not been sought in the
Corporation's proxy material pursuant to Rule 14a-8, the
proposal must be received by the Secretary of the Corporation,
Dana M. Taylor, Jr., Curtiss-Wright Corporation, Suite 501,
1200 Wall Street West, Lyndhurst, New Jersey 07071 by January
27, 1999. Pursuant to amended SEC Rule 14a-4(c)(1), the
Corporation shall exercise discretionary voting authority to
the extent conferred by proxy with respect to shareholder
proposals received after that date.
-17-
OTHER INFORMATION, Continued
Item 6. EXHIBITS and REPORTS on FORM 8-K
(a) Exhibits
Exhibit 10 - Material Contracts
(i) Standard Severance Protection Agreement dated June
19, 1998 between the Registrant and Officers of the
Registrant. The Agreement signed by David Lasky is
attached. The other seven are substantially identical
except that the signing officers were Martin R.
Benante, Gary J. Benschip, Robert A. Bosi, George J.
Yohrling, Gerald Nachman, Kenneth P. Slezak and Dana
M. Taylor, and that the contract with Dana M. Taylor
was attested on behalf of Registrant by Stephen R.
Bosin, Assistant Secretary.
(ii) Amendments to Curtiss-Wright Retirement Plan dated
April 1, 1998, April 29, 1998, April 30, 1998 and
June 30, 1998.
Exhibit 27 - Financial Data Schedules (Page 41)
(b) Reports on Form 8-K
The Registrant did not file any report on Form 8-K during the
quarter ended June 30, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undesigned thereunto duly authorized.
CURTISS-WRIGHT CORPORATION
(Registrant)
By: S/Robert A. Bosi
----------------------
Robert A. Bosi
Vice President-Finance
By: S/Kenneth P. Slezak
----------------------
Kenneth P. Slezak
Dated: August 14, 1998 Controller
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