[CURTISS-WRIGHT LOGO] NEWS RELEASE
==============================================================
FOR IMMEDIATE RELEASE
CURTISS-WRIGHT REPORTS 2004 SECOND QUARTER
AND SIX MONTH FINANCIAL RESULTS
- - -
Sales Increased 22% and 21% and Operating Income 43% & 22%
in the Second Quarter and First Half of 2004, Respectively
Backlog at Record Level
ROSELAND, NJ - July 29, 2004 - Curtiss-Wright Corporation (NYSE: CW, CW.B) today
announced financial results for the second quarter and six months ended June 30,
2004. The highlights for the periods are as follows:
Second Quarter 2004 Operating Highlights
o Net sales for the second quarter of 2004 increased 22% to $222.4 million
from $182.9 million in the second quarter of 2003. Acquisitions made in the
second half of 2003 and in 2004 contributed $30.2 million in incremental
sales in the second quarter of 2004.
o Operating income in the second quarter of 2004 increased 43% to $25.6
million from $18.0 million in the second quarter of 2003. Acquisitions made
in the second half of 2003 and in 2004 contributed $2.7 million in
incremental operating income in the second quarter of 2004. The increase in
operating income was achieved despite a $0.6 million decrease in pension
income from the second quarter of 2003.
o Net earnings for the second quarter of 2004 increased 32% to $14.3 million,
or $0.67 per diluted share, from $10.9 million, or $0.52 per diluted share,
in the second quarter of 2003 (adjusted for the 2-for-1 stock split in
December 2003). The increase in 2004 second quarter net earnings was
achieved despite a $2.1 million increase in interest expense (approximately
$0.06 per diluted share).
o New orders received in the second quarter of 2004 were $208.1 million, up
12% compared to the second quarter of 2003.
Six Months 2004 Operating Highlights
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o Net sales for the first six months of 2004 increased 21% to $437.4 million
from $362.8 million in the first six months of 2003. Acquisitions made in
2003 and 2004 contributed $58.4 million in incremental sales in the first
six months of 2004.
o Operating income in the first six months of 2004 increased 22% to $50.9
million from $41.8 million in the first six months of 2003. Acquisitions
made in 2003 and 2004 contributed $5.1 million in incremental operating
income in the first six months of 2004. The increase in operating income
was achieved despite a $1.1 million decrease in pension income from the
first six months of 2003.
o Net earnings for the first six months of 2004 increased 20% to $29.9
million, or $1.40 per diluted share, from $25.0 million, or $1.20 per
diluted share, in the first six months of 2003 (adjusted for the 2-for-1
stock split in December 2003). In addition, the increase in 2004 net
earnings was achieved despite a $3.5 million increase in interest expense
(approximately $0.10 per diluted share).
o New orders received in the first six months of 2004 were $443.5 million, up
13% compared to the first six months of 2003. Backlog increased 11% to a
new record high of $559.4 million from $505.5 million at December 31, 2003.
"We are pleased to again report higher sales and operating income for the second
quarter and first half of 2004," commented Martin R. Benante, Chairman and CEO
of Curtiss-Wright Corporation. "We continue to grow operating income faster than
sales,which demonstrates our ability to successfully integrate acquisitions
while continuing to grow our base businesses. Our diversification strategy has
provided growth in the first half of 2004 for both our core defense markets,
which grew 21%, and commercial and industrial markets, which grew 20%, over the
prior year period."
Sales
Sales growth in 2004 for the three and six months ended June 30th as compared to
2003, was driven by contributions from acquisitions and organic growth in some
of our base businesses. Acquisitions made in 2003 and 2004 have contributed
$30.2 million and $58.4 million in incremental sales for the quarter and six
months ended June 30, 2004, respectively, over the comparable periods in 2003.
Excluding the contribution from these acquisitions, we experienced overall
organic growth of 5% and 4% for the three and six months ended June 30, 2004,
respectively, over the prior year periods. The organic sales growth was driven
by our Metal Treatment and Motion Control segments, which experienced organic
growth of 19% and 9%, respectively, for the first six months of 2004.
In our base businesses, higher sales from our Motion Control segment to the
military aerospace market, higher sales from our Flow Control segment to the
commercial power generation and oil and gas processing markets, and higher sales
of global shot and laser peening by our Metal Treatment segment, all contributed
to the organic growth. In addition, foreign currency translation
Curtiss-Wright Corporation, Page 3
favorably impacted sales by $3.1 million and $7.7 million for the three and six
months ended June 30, 2004, respectively, compared to the prior year periods.
Operating Income
Operating income for the three and six months ended June 30, 2004 increased 43%
and 22%, respectively, over the 2003 prior year periods. The increases were due
to higher sales volumes, favorable sales mix and previously implemented cost
control initiatives. Overall, organic growth was 31% and 13% for the three and
six months ended June 30, 2004, respectively, compared to the prior year
periods. The strong year-to-date performance of our Motion Control and Metal
Treatment segments was slightly offset by a decrease in the Flow Control
segment.
The higher segment operating income was partially offset by lower pension income
of $0.6 million and $1.1 million for the three and six months ended June 30,
2004, respectively, over the comparable prior year periods. In addition, foreign
currency translation favorably impacted operating income by $0.5 million and
$1.2 million for the three and six months ended June 30, 2004, respectively,
compared to the prior year periods.
Net Earnings
Net earnings increased 32% and 20% for the three and six months ended June 30,
2004, respectively, over the comparable prior year periods. This was achieved by
strong operating income from our business segments, which increased $8.6 million
and $10.7 million over the prior year periods. Curtiss-Wright achieved strong
growth in the military aerospace, commercial power generation, and laser and
shot peening markets. Additionally Curtiss-Wright achieved growth during the
first six months of 2004 in oil and gas processing, commercial repair and
overhaul and certain industrial markets, despite the continued softness in these
markets overall.
Net earnings for the first six months 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 to fund our acquisition program and from higher interest
rates.
Segment Performance
Flow Control - Sales for the second quarter of 2004 were $86.2 million, up 1%
over the comparable period last year. Sales growth was achieved in the
commercial power generation, oil and gas processing, and defense electronics
markets. This growth was mostly offset by lower sales of flow control products
to the US Navy primarily due to the timing of contractual revenues. Sales of
this business segment also benefited from favorable foreign currency translation
of $0.4 million in the second quarter of 2004 as compared to the prior year
period.
Operating income for this segment increased 1% in the second quarter of 2004
compared to the prior year period. Despite the profit impact related to lower
flow control product sales to the US Navy, we achieved strong growth in this
segment's other businesses. Higher volume and stronger
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sales mix for our commercial power generation and oil and gas products, and
higher volumes for our electronic products to the US Navy were the drivers of
this increase.
Motion Control - Sales of $91.6 million for the second quarter of 2004 increased
50% over last year, principally due to the contributions from the 2003 and 2004
acquisitions, and 8% organic sales growth. The organic growth was driven mainly
by an increase in sales of military aerospace products for F/A-22 and V-22
production, F/A-22 spares, and the Joint Strike Fighter development. In
addition, this segment experienced higher electronic sales for the 767 Refueler
program and higher sales associated with the repair and overhaul services
provided to the global airline industry. Sales of this business segment also
benefited from favorable foreign currency translation of $1.7 million in the
second quarter of 2004 as compared to the prior year period.
Operating income for this segment increased 144% for the second quarter of 2004
compared to the prior year period. The improvement was driven by higher sales
volume previously mentioned, favorable sales mix on various military programs,
and implemented cost control initiatives. Additionally, the operating margins
for the repair and overhaul business improved slightly over the comparable
period last year, mainly as a result of implemented cost control initiatives.
Metal Treatment - Sales for the second quarter of 2004 of $44.6 million were 23%
higher than the comparable period last year. The improvement was mainly due to
organic growth of 19% driven by higher overall laser and shot peening revenues,
and the contributions from the 2004 acquisitions. We achieved exceptional sales
growth from our new laser peening technology as well as strong growth in our
global shot peening businesses. Favorable foreign currency translation
positively impacted sales by $1.1 million in the second quarter of 2004 as
compared to the prior year period.
Operating income increased 51% for the second quarter of 2004 as compared to the
prior year period. Margins improved substantially in our shot peening businesses
primarily as a result of higher sales volume, especially for our higher margin
laser peening sales. In addition, favorable sales mix, cost reduction programs,
and favorable foreign currency translation also contributed to the higher
operating income.
Mr. Benante concluded, "In 2004, we continue to demonstrate our ability to
generate long-term shareholder value by growing our sales and earnings. We
successfully increased sales and earnings due to our diversification and ability
to deliver the high performance, technologically advanced products for which
Curtiss-Wright is world renowned. Our strong performance in the first half of
2004 exemplifies our ability to execute our strategy and achieve our financial
targets. We expect the second half of 2004 to be even stronger, which will
continue to provide opportunities to generate growth in each of our three
business segments. We look forward to providing our investors with superior
returns in 2004."
**********
The Company will host a conference call to discuss the second quarter 2004
results at 10:00 EDT Friday, July 30, 2004. A live webcast of the call can be
heard on the Internet by visiting the
Curtiss-Wright Corporation, Page 5
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 6
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share data)
Three Months Ended Six Months Ended Three Months Six Months
June 30, June 30, Change Change
2004 2003 2004 2003 $ % $ %
-------- -------- --------- --------- ------- ------ ------- ------
Net sales $222,428 $182,857 $ 437,361 $ 362,790 $39,571 21.64% $74,571 20.55%
Cost of sales 146,406 126,175 289,744 247,076 20,231 16.03% 42,668 17.27%
-------- -------- --------- --------- ------- -------
Gross profit 76,022 56,682 147,617 115,714 19,340 34.12% 31,903 27.57%
Research & development expenses 7,754 5,772 15,966 11,077 1,982 34.34% 4,889 44.14%
Selling expenses 14,743 10,307 27,347 19,275 4,436 43.04% 8,072 41.88%
General and administrative expenses 27,789 23,166 53,038 44,580 4,623 19.96% 8,458 18.97%
Environmental remediation and
administrative expenses, net 51 -- 291 -- 51 N/A 291 N/A
Pension expense (income), net 42 (528) 82 (1,053) 570 -107.95% 1,135 -107.79%
-------- -------- --------- --------- ------- -------
Operating income 25,643 17,965 50,893 41,835 7,678 42.74% 9,058 21.65%
Other income (expenses), net 293 515 (196) 273 (222) -43.11% (469) -171.79%
Interest expense (3,018) (942) (5,283) (1,793) (2,076) 220.38% (3,490) 194.65%
-------- -------- --------- --------- ------- -------
Earnings before income taxes 22,918 17,538 45,414 40,315 5,380 30.68% 5,099 12.65%
Provision for income taxes 8,594 6,665 15,481 15,320 1,929 28.95% 161 1.05%
Net earnings $ 14,324 $ 10,873 $ 29,933 $ 24,995 $ 3,451 31.74% $ 4,938 19.75%
======== ======== ========= ========= ======= =======
Basic earnings per share $ 0.68 $ 0.53 $ 1.42 $ 1.21
======== ======== ========= =========
Diluted earnings per share $ 0.67 $ 0.52 $ 1.40 $ 1.20
======== ======== ========= =========
Dividends per share $ 0.09 $ 0.08 $ 0.18 $ 0.15
======== ======== ========= =========
Weighted average shares outstanding:
Basic 21,136 20,602 21,013 20,584
Diluted 21,460 20,862 21,330 20,834
Share and per share amounts have been restated to refect 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 7
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
June 30, December 31, Change
2004 2003 $ %
---------- ----------- -------- ----
Assets
Current Assets:
Cash and cash equivalents $ 36,830 $ 98,672 $(61,842) -62.7%
Receivables, net 174,538 143,362 31,176 21.7%
Inventories, net 114,769 97,880 16,889 17.3%
Deferred income taxes 24,269 23,630 639 2.7%
Other current assets 13,660 10,979 2,681 24.4%
---------- -------- --------
Total current assets 364,066 374,523 (10,457) -2.8%
---------- -------- --------
Property, plant, and equipment, net 248,496 238,139 10,357 4.3%
Prepaid pension costs 77,845 77,877 (32) 0.0%
Goodwill, net 316,114 220,058 96,056 43.7%
Other intangible assets, net 95,010 48,268 46,742 96.8%
Other assets 15,956 14,800 1,156 7.8%
---------- -------- --------
Total Assets $1,117,487 $973,665 $143,822 14.8%
========== ======== ========
Liabilities
Current Liabilities:
Short-term debt $ 1,002 $ 997 $ 5 0.5%
Accounts payable 56,551 43,776 12,775 29.2%
Accrued expenses 49,144 44,938 4,206 9.4%
Income taxes payable 5,229 6,748 (1,519) -22.5%
Other current liabilities 43,486 39,424 4,062 10.3%
---------- -------- --------
Total current liabilities 155,412 135,883 19,529 14.4%
Long-term debt 300,999 224,151 76,848 34.3%
Deferred income taxes 20,318 21,798 (1,480) -6.8%
Accrued pension & other postretirement benefit costs 77,566 75,633 1,933 2.6%
Long-term portion of environmental reserves 19,774 21,083 (1,309) -6.2%
Other liabilities 20,860 16,236 4,624 28.5%
---------- -------- --------
Total Liabilities 594,929 494,784 100,145 20.2%
---------- -------- --------
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 51,522 52,998 (1,476) -2.8%
Retained earnings 569,792 543,670 26,122 4.8%
Unearned portion of restricted stock (45) (55) 10 -18.9%
Accumulated other comprehensive income 22,219 22,634 (415) -1.8%
---------- -------- --------
668,864 644,623 24,241 3.8%
Less: cost of treasury stock 146,306 165,742 (19,436) -11.7%
---------- -------- --------
Total Stockholders' Equity 522,558 478,881 43,677 9.1%
---------- -------- --------
Total Liabilities and Stockholders' Equity $1,117,487 $973,665 $143,822 14.8%
========== ======== ========
Certain prior year information has been reclassified to conform to current
presentation.
Curtiss-Wright Corporation, Page 8
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SEGMENT INFORMATION
(In thousands)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------------- ------------------------------------
% %
2004 2003 Change 2004 2003 Change
-------- -------- ------ --------- --------- ------
Sales:
Flow Control $ 86,205 $ 85,617 0.7% $175,600 $178,958 -1.9%
Motion Control 91,578 60,984 50.2% 174,922 118,024 48.2%
Metal Treatment 44,645 36,256 23.1% 86,839 65,808 32.0%
-------- -------- -------- --------
Total Sales $222,428 $182,857 21.6% $437,361 $362,790 20.6%
Operating Income:
Flow Control $ 8,846 $ 8,748 1.1% $ 19,277 $ 23,066 -16.4%
Motion Control 10,012 4,107 143.8% 18,301 9,197 99.0%
Metal Treatment 7,577 5,030 50.6% 14,154 8,781 61.2%
-------- -------- -------- --------
Total Segments 26,435 17,885 47.8% 51,732 41,044 26.0%
Pension Income (42) 528 -108.0% (82) 1,053 -107.8%
Corporate & Other (750) (448) 67.4% (757) (262) 188.9%
-------- -------- ------ -------- -------- ------
Total Operating Income $ 25,643 $ 17,965 42.7% $ 50,893 $ 41,835 21.7%
======== ======== ====== ======== ======== ======
Operating Margins:
Flow Control 10.3% 10.2% 11.0% 12.9%
Motion Control 10.9% 6.7% 10.5% 7.8%
Metal Treatment 17.0% 13.9% 16.3% 13.3%
Total Curtiss-Wright 11.5% 9.8% 11.6% 11.5%
Curtiss-Wright Corporation, Page 9
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 5,100 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, electronics, 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 Deignan
(973) 597-4734
adeignan@curtisswright.com