[CURTISS WRIGHT LOGO] [CW LISTED NYSE LOGO]
NEWS RELEASE
FOR IMMEDIATE RELEASE
CURTISS-WRIGHT REPORTS FIRST QUARTER 2004
FINANCIAL RESULTS
- - -
Sales and Operating Income up 19% & 6%, Respectively;
Backlog at Record Levels
ROSELAND, NJ - April 29, 2004 - Curtiss-Wright Corporation (NYSE: CW, CW.B)
today announced financial results for the first quarter ended March 31, 2004.
The highlights for the first quarter are as follows:
o Net sales for the first quarter of 2004 increased 19% to $214.9 million
from $179.9 million in the first quarter of 2003. Acquisitions made in 2003
and 2004 contributed $29.6 million in incremental sales in the first
quarter of 2004.
o Operating income in the first quarter of 2004 increased 6% to $25.3 million
from $23.9 million in the first quarter of 2003. Acquisitions made in 2003
and 2004 contributed $2.3 million in incremental operating income in the
first quarter of 2004.
o Net earnings for the first quarter of 2004 increased 11% to $15.6 million,
or $0.74 per diluted share, from $14.1 million, or $0.68 per diluted share
(adjusted for the 2-for-1 stock split in December 2003). The net earnings
for the first quarter include a one-time tax benefit of $1.5 million
resulting from a change in legal structure of one of our subsidiaries. In
addition, the increase in 2004 net earnings was achieved despite a $1.4
million increase in interest expense (approximately $0.04 per diluted
share) and a $0.6 million decrease in pension income from the first quarter
of 2003.
o Backlog increased 10% to a new record high of $558.0 million from $505.5
million at December 31, 2003.
Curtiss-Wright Corporation, Page 2
"We are pleased to again report higher sales and operating income for the first
quarter of 2004 over the same period last year," commented Martin R. Benante,
Chairman and CEO of Curtiss-Wright Corporation. "Our strong performance is due
to our diversification strategy and growth in our core markets, particularly
defense, specifically defense electronics, and in our metal treatment segment,
specifically laser and shot peening. We successfully increased sales and
earnings, despite a slowdown in some of our markets, due to our ability to
deliver to our customers the high performance, technologically advanced products
for which Curtiss-Wright is world renowned."
Sales
The 19% improvement in sales for the first quarter 2004 compared to the prior
year period resulted from solid organic growth and the contributions of $29.6
million in incremental sales from our 2003 and 2004 acquisitions. Excluding the
contributions from the acquisitions consummated in 2003 and 2004, we experienced
4% overall organic growth in the first quarter of 2004 over the prior year
period. We experienced organic growth of 17% in our Metal Treatment segment and
10% in our Motion Control segment, partially offset by an overall decrease in
the Flow Control segment sales due to the shipment of two large completed
projects in the first quarter of 2003 that did not reoccur in 2004.
In our base businesses, higher sales from our military aerospace and domestic
ground defense businesses, higher sales of flow control products to the
commercial power generation and the nuclear navy markets, and higher sales
from our laser peening and global shot peening businesses, all contributed to
the organic growth. In addition, foreign currency translation favorably impacted
sales for the first quarter of 2004 by $4.8 million as compared to the prior
year period.
Operating Income
Operating income for the first quarter 2004 increased 6% over 2003 due to higher
sales volumes and a favorable sales mix. We experienced organic growth of 51% in
our Metal Treatment segment and 39% in our Motion Control segment, offset by an
overall decrease in the Flow Control segment due to the margin related to the
two large completed projects in the first quarter of 2003 that did not reoccur
in 2004. This increase was partially offset by lower volume for our European
ground defense business and lower pension income.
Net Earnings
Net earnings for the first quarter of 2004 year increased 11% over the
comparable prior year period, highlighted by strong operating income from our
business segments, which increased $2.1 million. The net earnings for the first
quarter include a one-time tax benefit of $1.5 million resulting from a change
in legal structure of one of our subsidiaries. These improvements were partially
offset by higher interest expense associated with the debt incurred for our
acquisition program. Overall, Curtiss-Wright achieved strong growth in the
military aerospace, domestic land-based military, commercial power generation,
and laser and shot peening markets. Additionally Curtiss-
Curtiss-Wright Corporation, Page 3
Wright achieved growth during the first quarter of 2004 in oil and gas
processing and certain industrial markets, despite the sluggish performance of
these markets overall.
"Our position on many key defense programs, which include a mix of high
performance products for aerospace, land-based and naval platforms, produced 17%
higher sales in the first quarter of 2004 as compared to the comparable prior
year period, and should continue to provide opportunities for us in the future,"
said Mr. Benante. "Our balanced blend of defense and commercial businesses is
expected to continue to provide both short and long-term benefits to our
shareholders. In addition, our recent acquisitions have achieved
better-than-expected results while increasing our market penetration,
particularly within the defense electronics sector, and expanded our geographic
reach and technological capabilities."
Segment Performance
Flow Control - Sales for the first quarter of 2004 were $89.4 million, down 4%
over the comparable period last year. Lower overall sales were mainly due to the
completion in 2003 of two large projects, which did not reoccur in 2004. These
projects generated approximately $14 million in sales in the first quarter of
2003. The loss of sales from these two large projects was partially offset by a
12% increase in sales for this segment's remaining businesses over the
comparable prior year period. Higher sales to the commercial power generation
market, higher sales of flow control and electronic products to the nuclear
naval market and higher sales of our coke de-heading valve to the oil and gas
industry partially offset the decrease in sales resulting from the
aforementioned projects. Sales of this business segment also benefited from
favorable foreign currency translation of $0.8 million in the first quarter
of 2004 as compared to the prior year period.
Operating income for this segment decreased 27% in the first quarter of 2004
compared to the prior year period. The reduction was primarily due to lower
volume and the profit impact related to the two large higher margin contracts
in the first quarter of 2003 that did not reoccur in 2004. The loss in operating
income from these two large projects was partially offset by a 6% increase in
operating income for this segment's remaining businesses over the comparable
prior year period. Also contributing to the lower operating income was less
favorable sales mix of electronic components and lower margin on certain valve
orders for the nuclear navy. Operating income improvements for our commercial
power generation and oil and gas products were due to higher volume and stronger
sales mix.
Motion Control - Sales of $83.3 million for the first quarter of 2004 increased
46% over last year, principally due to the contributions from the 2003 and 2004
acquisitions, and 10% organic sales growth. The organic sales growth was driven
mainly by an increase in sales of military aerospace products for F-16 spares,
F/A-22 production and Joint Strike Fighter development. In addition, this
segment experienced higher electronic sales for the Global Hawk program and
slightly higher land-based military and European sensor and drive sales. These
higher sales were partially offset by lower European ground defense sales
resulting from expedited delivery schedules in 2003 and lower sales associated
with the overhaul and repair services provided to the global airline industry.
Sales
Curtiss-Wright Corporation, Page 4
of this business segment also benefited from favorable foreign currency
translation of $2.1 million in the first quarter of 2004 as compared to the
prior year period.
Operating income for this segment increased 63% for the first quarter of 2004
compared to the prior year period. The improvement was driven by higher sales
volume as mentioned above, favorable sales mix on various military programs, and
cost controls. These improvements were partially offset by lower margins at our
European ground defense business. Additionally, the operating margins for the
overhaul and repair business improved slightly over the comparable period last
year, mainly as a result of implemented cost control initiatives.
Metal Treatment - Sales for the first quarter of 2004 of $42.2 million were 43%
higher than the comparable period last year. The improvement was mainly due to
organic growth of 17% driven by higher overall shot peening revenues and the
contributions from the 2003 and 2004 acquisitions. The improvement in shot
peening revenue was due to exceptional sales growth from our new laser peening
technology as well as strong growth in our core shot peening services in both
North America and Europe. Favorable foreign currency translation positively
impacted sales by $2.0 million in the first quarter of 2004 as compared to the
prior year period.
Operating income increased 75% for the first quarter of 2004 as compared to the
first quarter last year. Margins improved substantially in our shot peening
businesses primarily as a result of higher sales volume. In addition, favorable
sales mix, cost reduction programs, and favorable foreign currency translation
also contributed to the higher operating income.
Mr. Benante concluded, "We begin the year 2004 confident in our ability to
generate long-term shareholder value by continuing to grow our sales and
earnings. Although 2004 is likely to be challenging, our first quarter results
were better-than-expected and exemplify our ability to execute our strategy
and achieve our financial targets. Our diversification and growth strategy and
keen focus on technology will continue to generate growth opportunities in each
of our three business segments. We look forward to generating another strong
performance in 2004 and to providing our investors with superior returns."
**********
The Company will host a conference call to discuss the first quarter 2004
results at 10:00 EDT Friday, April 30, 2004. 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)
Curtiss-Wright Corporation, Page 5
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Three Months Ended
March 31, Change
2004 2003 $ %
-------- -------- ------- -----
Net sales $214,933 $179,933 $35,000 19.45%
Cost of sales 143,338 120,901 22,437 18.56%
-------- -------- -------
Gross profit 71,595 59,032 12,563 21.28%
Research & development expenses 8,212 5,305 2,907 54.80%
Selling expenses 12,604 8,968 3,636 40.54%
General and administrative expenses 25,249 21,414 3,835 17.91%
Environmental remediation and administrative
expenses, net 240 0 240 N/A
Pension expense (income), net 40 (525) 565 -107.62%
-------- -------- -------
Operating income 25,250 23,870 1,380 5.78%
Other income (expenses), net (489) (242) (247) 102.07%
Interest expense (2,265) (851) (1,414) 166.16%
-------- -------- -------
Earnings before income taxes 22,496 22,777 (281) -1.23%
Provision for income taxes 6,887 8,655 (1,768) -20.43%
-------- -------- -------
Net earnings $ 15,609 $ 14,122 $ 1,487 10.53%
======== ======== =======
Basic earnings per share $ 0.75 $ 0.69
======== ========
Diluted earnings per share $ 0.74 $ 0.68
======== ========
Dividends per share $ 0.09 $ 0.08
======== ========
Weighted average shares outstanding:
Basic 20,881 20,564
Diluted 21,206 20,816
Share and per share amounts have been restated to reflect the Corporation's
2-for-1 stock split on December 17, 2003.
Certain prior year information has been reclassified to conform to current
presentation.
Curtiss-Wright Corporation, Page 6
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December 31, Change
2004 2003 $ %
---------- -------- -------- ---
Assets
Current Assets:
Cash and cash equivalents $ 33,322 $ 98,672 $(65,350) -66.2%
Receivables, net 164,137 143,362 20,775 14.5%
Inventories, net 104,929 97,880 7,049 7.2%
Deferred income taxes 24,377 23,630 747 3.2%
Other current assets 12,661 10,979 1,682 15.3%
---------- -------- --------
Total current assets 339,426 374,523 (35,097) -9.4%
---------- -------- --------
Property, plant, and equipment, net 246,301 238,139 8,162 3.4%
Prepaid pension costs 77,861 77,877 (16) 0.0%
Goodwill, net 284,217 220,058 64,159 29.2%
Other intangible assets, net 78,829 48,268 30,561 63.3%
Other assets 19,431 14,800 4,631 31.3%
---------- -------- --------
Total Assets $1,046,065 $973,665 $ 72,400 7.4%
========== ======== ========
Liabilities
Current Liabilities:
Short-term debt $ 1,034 $ 997 $ 37 3.7%
Accounts payable 47,630 43,776 3,854 8.8%
Accrued expenses 39,966 44,938 (4,972) -11.1%
Income taxes payable 10,756 6,748 4,008 59.4%
Other current liabilities 35,890 39,424 (3,534) -9.0%
---------- -------- --------
Total current liabilities 135,276 135,883 (607) -0.4%
Long-term debt 276,508 224,151 52,357 23.4%
Deferred income taxes 20,660 21,798 (1,138) -5.2%
Accrued pension & other postretirement benefit costs 76,340 75,633 707 0.9%
Long-term portion of environmental reserves 20,564 21,083 (519) -2.5%
Other liabilities 19,829 16,236 3,593 22.1%
---------- -------- --------
Total Liabilities 549,177 494,784 54,393 11.0%
---------- -------- --------
Stockholders' Equity
Common stock, $1 par value 16,611 16,611 0 0.0%
Class B common stock, $1 par value 8,765 8,765 0 0.0%
Capital surplus 49,698 52,998 (3,300) -6.2%
Retained earnings 557,390 543,670 13,720 2.5%
Unearned portion of restricted stock (50) (55) 5 -9.1%
Accumulated other comprehensive income 23,387 22,634 753 3.3%
---------- -------- --------
655,801 644,623 11,178 1.7%
Less: cost of treasury stock 158,913 165,742 (6,829) -4.1%
---------- -------- --------
Total Stockholders' Equity 496,888 478,881 18,007 3.8%
---------- -------- --------
Total Liabilities and Stockholders' Equity $1,046,065 $973,665 $ 72,400 7.4%
========== ======== ========
Curtiss-Wright Corporation, Page 7
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
Three Months Ended
March 31,
------------------------------------
%
2004 2003 Change
--------- ---------- ---------
Sales:
Flow Control $ 89,395 $ 93,341 -4.2%
Motion Control 83,344 57,040 46.1%
Metal Treatment 42,194 29,552 42.8%
-------- --------
Total Sales $214,933 $179,933 19.5%
Operating Income:
Flow Control $ 10,431 $ 14,318 -27.1%
Motion Control 8,289 5,090 62.8%
Metal Treatment 6,577 3,751 75.3%
-------- --------
Total Segments 25,297 23,159 9.2%
Pension Income (40) 525 -107.6%
Corporate & Other (7) 186 -103.8%
-------- --------
-------- -------- -------
Total Operating Income $ 25,250 $ 23,870 5.8%
======== ======== =======
Operating Margins:
Flow Control 11.7% 15.3%
Motion Control 9.9% 8.9%
Metal Treatment 15.6% 12.7%
Total Curtiss-Wright 11.7% 13.3%
Curtiss-Wright Corporation, Page 8
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 4,900 people. More information on
Curtiss-Wright can be found at www.curtisswright.com.
###
Forward-looking statements in this release are made pursuant to the Safe Harbor
provisions of the Private Securities Litigation Reform Act of 1995. 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, marine, and industrial companies. Please refer
to the Company's current SEC filings under the Securities and Exchange Act of
1934, as amended, for further information.
This press release and additional information is available at
www.curtisswright.com.
Contact: Alexandra Magnuson
(973) 597-4734
amagnuson@curtisswright.com
---------------------------