Curtiss-Wright Reports Third Quarter 2024 Financial Results and Raises Full-Year 2024 Guidance

DAVIDSON, N.C.–(BUSINESS WIRE)–Curtiss-Wright Corporation (NYSE: CW) reports financial results for the third quarter ended September 30, 2024.

Third Quarter 2024 Highlights:

• Reported sales of $799 million, up 10%;
• Reported operating income of $145 million, operating margin of 18.1%, and diluted earnings per share (EPS) of $2.89;
• Adjusted operating income of $149 million, up 11%;
• Adjusted operating margin of 18.7%, up 20 basis points;
• Adjusted diluted EPS of $2.97, up 17%;
• New orders of $860 million, up 2%, reflected a book-to-bill of 1.1x driven by solid demand within our Aerospace & Defense (A&D) markets;
• Backlog of $3.3 billion, up 16% year-to-date; and
• Free cash flow (FCF) of $163 million, generating 142% Adjusted FCF conversion.

Raised Full-Year 2024 Adjusted Financial Guidance:

• Sales increased to new range of 7% to 9% growth (previously 6% to 8%), principally driven by strong growth in our A&D markets;
• Operating income increased to new range of 7% to 10% growth (previously 6% to 9%);
• Maintained operating margin range of 17.4% to 17.6%, flat to up 20 basis points compared with the prior year;
• Diluted EPS increased to new range of $10.55 to $10.75, up 12% to 15% (previously $10.40 to $10.65, up 11% to 14%); and
• Free cash flow increased to new range of $430 to $450 million, up 4% to 9% (previously $425 to $445 million, up 3% to 8%), and continues to reflect greater than 105% FCF conversion.

“Curtiss-Wright achieved strong third quarter results, highlighted by mid-teens revenue growth in our A&D end markets, a better-than-expected operational performance in our Defense Electronics segment and a 17% year-over-year increase in Adjusted diluted EPS,” said Lynn M. Bamford, Chair and CEO of Curtiss-Wright Corporation. “We continue to demonstrate solid order activity, yielding an overall book-to-bill of 1.1x in the quarter, highlighted by record quarterly orders within our Defense Electronics segment. We also delivered solid cash generation, resulting in an exceptional free cash flow conversion of 142%. Based on the strong year-to-date performance and our continued momentum in executing on our Pivot to Growth strategy, we once again raised our full-year 2024 outlook for sales, diluted EPS and free cash flow.”

“We continue to leverage our strong balance sheet in support of our disciplined capital allocation strategy. This includes delivering on our commitment to drive solid returns to our shareholders as we completed the recently announced $100 million expansion of our 2024 share repurchase program during the quarter. Additionally, we remain focused on supplementing our organic growth with high quality, strategic acquisitions that meet our stringent financial criteria to drive long-term shareholder value.”

Third Quarter 2024 Operating Results

(In millions)	Q3-2024			Q3-2023			Change
Reported
Sales	$	799		$	724		10	%
Operating income	$	145		$	133		9	%
Operating margin		18.1	%		18.3	%	(20 bps)
Adjusted (1)
Sales	$	799		$	724		10	%
Operating income	$	149		$	134		11	%
Operating margin		18.7	%		18.5	%	20 bps
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $799 million increased 10% compared with the prior year;
• Total A&D market sales increased 15%, as we experienced strong growth in the defense markets principally driven by increased demand for our defense electronics products and higher submarine and aircraft carrier revenues in naval defense, as well as higher OEM sales in the commercial aerospace market;
• Total Commercial market sales were flat, reflecting solid growth in the power & process market, principally driven by higher sales of our commercial nuclear products, which was offset by lower sales in the general industrial market; and
• Adjusted operating income of $149 million increased 11%, while Adjusted operating margin increased 20 basis points to 18.7%, principally driven by favorable overhead absorption on higher revenues in all three segments and partially offset by an unfavorable mix of products.

Third Quarter 2024 Segment Performance

Aerospace & Industrial

(In millions)	Q3-2024			Q3-2023			Change
Reported
Sales	$	229		$	220		4	%
Operating income	$	37		$	39		(4	%)
Operating margin		16.4	%		17.7	%	(130 bps)
Adjusted (1)
Sales	$	229		$	220		4	%
Operating income	$	39		$	39		1	%
Operating margin		17.2	%		17.7	%	(50 bps)
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $229 million, up $8 million, or 4%;
• Commercial aerospace market revenue increases reflected strong demand and higher OEM sales of sensors products and surface treatment services on narrowbody and widebody platforms;
• Higher revenue in the aerospace defense market reflected the timing of sales for our actuation equipment on various fighter jet programs;
• Lower general industrial market revenue was principally driven by reduced sales of industrial vehicle products to off-highway vehicle platforms and lower sales of industrial automation and services; and
• Adjusted operating income was $39 million, up 1% from the prior year, while Adjusted operating margin decreased 50 basis points to 17.2%, as favorable absorption on higher sales as well as the benefits of our restructuring initiatives were offset by unfavorable mix of products.

Defense Electronics

(In millions)	Q3-2024			Q3-2023			Change
Reported
Sales	$	243		$	216		12	%
Operating income	$	64		$	56		13	%
Operating margin		26.2	%		26.0	%	20 bps
Adjusted (1)
Sales	$	243		$	216		12	%
Operating income	$	64		$	56		15	%
Operating margin		26.5	%		26.0	%	50 bps
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $243 million, up $27 million, or 12%;
• Higher revenue in the aerospace defense market was principally driven by increased sales of our embedded computing equipment on various domestic and international helicopter programs, partially offset by the timing of flight test equipment sales;
• Strong revenue growth in the ground defense market primarily reflected higher sales of tactical battlefield communications equipment;
• Higher commercial aerospace market revenue principally reflected increased OEM sales of avionics and electronics on various platforms; and
• Adjusted operating income was $64 million, up 15% from the prior year, while Adjusted operating margin increased 50 basis points to 26.5%, primarily due to favorable absorption on higher A&D revenues.

Naval & Power

(In millions)	Q3-2024			Q3-2023			Change
Reported
Sales	$	327		$	288		14	%
Operating income	$	53		$	48		11	%
Operating margin		16.2	%		16.6	%	(40 bps)
Adjusted (1)
Sales	$	327		$	288		14	%
Operating income	$	54		$	49		10	%
Operating margin		16.4	%		17.0	%	(60 bps)
(1) Reconciliations of Reported to Adjusted operating results are available in the Appendix.

• Sales of $327 million, up $39 million, or 14%;
• Strong revenue growth in the naval defense market principally reflected higher demand on the Virginia-class submarine, Columbia-class submarine and CVN-81 aircraft carrier programs, as well as higher growth on various next-generation submarine development programs;
• Higher power & process market revenues mainly reflected increased commercial nuclear aftermarket sales supporting the maintenance of U.S. operating reactors; and
• Adjusted operating income was $54 million, up 10% from the prior year, while Adjusted operating margin decreased 60 basis points to 16.4%, as favorable absorption on higher revenues was partially offset by an unfavorable mix of products and the timing of development programs.

Free Cash Flow

(In millions)	Q3-2024			Q3-2023			Change
Net cash provided by operating activities	$	177		$	146		21	%
Capital expenditures		(15	)		(9	)	56	%
Reported free cash flow	$	163		$	137		19	%
Adjusted free cash flow (1)	$	163		$	137		19	%
(1) A reconciliation of Reported to Adjusted free cash flow is available in the Appendix.

• Reported free cash flow of $163 million increased $26 million year over year, primarily driven by higher cash earnings and lower working capital;
• Adjusted free cash flow of $163 million; and
• Capital expenditures increased $5 million compared with the prior year period, due to growth investments within the Aerospace & Industrial and Defense Electronics segments.

New Orders and Backlog

• New orders of $860 million increased 2% compared with the prior year and generated an overall book-to-bill of approximately 1.1x, principally driven by continued strong demand for defense electronics products within our A&D markets; and
• Backlog of $3.3 billion, up 16% from December 31, 2023, reflecting higher demand in both our A&D and Commercial markets.

Share Repurchase and Dividends

• During the third quarter, the Company repurchased 355,578 shares of its common stock for approximately $113 million and remains on track to repurchase a total of $150 million in shares in 2024; and
• The Company declared a quarterly dividend of $0.21 a share.

Full-Year 2024 Guidance

The Company is updating its full-year 2024 Adjusted financial guidance⁽¹⁾ as follows:

($ in millions, except EPS)	2024 Adjusted Non-GAAP Guidance (Prior)	2024 Adjusted Non-GAAP Guidance (Current)	Change vs 2023 Adjusted (Current)
Total Sales	$3,010 – $3,060	$3,050 – $3,095	Up 7% – 9%
Operating Income	$525 – $539	$531 – $545	Up 7% – 10%
Operating Margin	17.4% – 17.6%	17.4% – 17.6%	Up 0 – 20 bps
Diluted EPS	$10.40 – $10.65	$10.55 – $10.75	Up 12% – 15%
Free Cash Flow	$425 – $445	$430 – $450	Up 4% – 9%
(1) Reconciliations of Reported to Adjusted 2023 operating results and 2024 financial guidance are available in the Appendix.

**********

A more detailed breakdown of the Company’s 2024 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted Non-GAAP amounts, can be found in the accompanying schedules. Historical financial results are available in the Investor Relations section of Curtiss-Wright’s website.

Conference Call & Webcast Information

The Company will host a conference call to discuss its third quarter 2024 financial results and updates to 2024 guidance at 10:00 a.m. ET on Thursday, October 31, 2024. A live webcast of the call and the accompanying financial presentation, as well as a webcast replay of the call, will be made available on the internet by visiting the Investor Relations section of the Company’s website at www.curtisswright.com.

(Tables to Follow)

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
($’s in thousands, except per share data)
	Three Months Ended								Nine Months Ended
	September 30,								September 30,
		2024				2023				2024				2023
Product sales	$	684,216			$	613,915			$	1,941,327			$	1,721,832
Service sales		114,702				110,411				355,549				337,750
Total net sales		798,918				724,326				2,296,876				2,059,582
Cost of product sales		434,370				380,163				1,252,773				1,093,469
Cost of service sales		66,285				62,695				207,984				203,664
Total cost of sales		500,655				442,858				1,460,757				1,297,133
Gross profit		298,263				281,468				836,119				762,449
Research and development expenses		20,734				23,464				65,866				65,698
Selling expenses		37,311				34,084				109,202				100,782
General and administrative expenses		92,035				91,401				281,092				272,060
Restructuring expenses		3,280				—				6,198				—
Operating income		144,903				132,519				373,761				323,909
Interest expense		11,408				12,496				33,194				40,432
Other income, net		10,126				7,023				28,294				22,744
Earnings before income taxes		143,621				127,046				368,861				306,221
Provision for income taxes		(32,461	)			(30,268	)			(81,735	)			(71,598	)
Net earnings	$	111,160			$	96,778			$	287,126			$	234,623
Net earnings per share:
Basic earnings per share	$	2.91			$	2.53			$	7.51			$	6.13
Diluted earnings per share	$	2.89			$	2.51			$	7.47			$	6.09
Dividends per share	$	0.21			$	0.20			$	0.62			$	0.59
Weighted-average shares outstanding:
Basic		38,208				38,285				38,245				38,301
Diluted		38,451				38,558				38,451				38,538

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
($’s in thousands, except par value)
	September 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents	$	443,850			$	406,867
Receivables, net		857,614				732,678
Inventories, net		582,584				510,033
Other current assets		68,035				67,502
Total current assets		1,952,083				1,717,080
Property, plant, and equipment, net		330,292				332,796
Goodwill		1,583,448				1,558,826
Other intangible assets, net		532,397				557,612
Operating lease right-of-use assets, net		156,613				141,435
Prepaid pension asset		279,212				261,869
Other assets		51,693				51,351
Total assets	$	4,885,738			$	4,620,969
Liabilities
Current liabilities:
Current portion of long-term debt	$	90,000			$	—
Accounts payable		222,542				243,833
Accrued expenses		194,414				188,039
Deferred revenue		392,330				303,872
Other current liabilities		87,369				70,800
Total current liabilities		986,655				806,544
Long-term debt		959,302				1,050,362
Deferred tax liabilities, net		124,186				132,319
Accrued pension and other postretirement benefit costs		68,159				66,875
Long-term operating lease liability		134,866				118,611
Long-term portion of environmental reserves		14,661				12,784
Other liabilities		107,490				105,061
Total liabilities	$	2,395,319			$	2,292,556
Stockholders’ equity
Common stock, $1 par value	$	49,187			$	49,187
Additional paid in capital		144,394				140,182
Retained earnings		3,751,183				3,487,751
Accumulated other comprehensive loss		(203,428	)			(213,223	)
Less: cost of treasury stock		(1,250,917	)			(1,135,484	)
Total stockholders’ equity	$	2,490,419			$	2,328,413
Total liabilities and stockholders’ equity	$	4,885,738			$	4,620,969

Use and Definitions of Non-GAAP Financial Information (Unaudited)

The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these Adjusted (non-GAAP) measures provide investors with improved transparency in order to better measure Curtiss-Wright’s ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Reconciliations of “Reported” GAAP amounts to “Adjusted” non-GAAP amounts are furnished within this release.

The following definitions are provided:

Adjusted Operating Income, Operating Margin, Net Earnings and Diluted EPS

These Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions, specifically one-time inventory step-up, backlog amortization, deferred revenue adjustments and transaction costs; (ii) costs associated with the Company’s 2024 Restructuring Program; and (iii) the sale or divestiture of a business or product line, as applicable.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)
($’s in thousands)
	Three Months Ended											Three Months Ended
	September 30, 2024											September 30, 2023											% Change
	As Reported				Adjustments			Adjusted				As Reported				Adjustments			Adjusted				As Reported			Adjusted
Sales:
Aerospace & Industrial	$	228,659			$	—		$	228,659			$	220,297			$	—		$	220,297			4	%		4	%
Defense Electronics		243,029				—			243,029				216,285				—			216,285			12	%		12	%
Naval & Power		327,230				—			327,230				287,744				—			287,744			14	%		14	%
Total sales	$	798,918			$	—		$	798,918			$	724,326			$	—		$	724,326			10	%		10	%
Operating income (expense):
Aerospace & Industrial(2)	$	37,435			$	1,926		$	39,361			$	39,014			$	—		$	39,014			(4	)%		1	%
Defense Electronics(2)		63,639				819			64,458				56,212				—			56,212			13	%		15	%
Naval & Power(1)(2)		53,039				759			53,798				47,663				1,333			48,996			11	%		10	%
Total segments	$	154,113			$	3,504		$	157,617			$	142,889			$	1,333		$	144,222			8	%		9	%
Corporate and other(2)		(9,210	)			660			(8,550	)			(10,370	)			—			(10,370	)		11	%		18	%
Total operating income	$	144,903			$	4,164		$	149,067			$	132,519			$	1,333		$	133,852			9	%		11	%
Operating margins:	As Reported							Adjusted				As Reported							Adjusted				As Reported			Adjusted
Aerospace & Industrial		16.4	%						17.2	%			17.7	%						17.7	%		(130 bps)			(50 bps)
Defense Electronics		26.2	%						26.5	%			26.0	%						26.0	%		20 bps			50 bps
Naval & Power		16.2	%						16.4	%			16.6	%						17.0	%		(40 bps)			(60 bps)
Total Curtiss-Wright		18.1	%						18.7	%			18.3	%						18.5	%		(20 bps)			20 bps
Segment margins		19.3	%						19.7	%			19.7	%						19.9	%		(40 bps)			(20 bps)
(1) Excludes first year purchase accounting adjustments in both the current and prior year periods.
(2) Excludes costs associated with the Company’s 2024 Restructuring Program in the current period.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED TO ADJUSTED (UNAUDITED)
($’s in thousands)
	Nine Months Ended											Nine Months Ended
	September 30, 2024											September 30, 2023											% Change
	As Reported				Adjustments			Adjusted				As Reported				Adjustments			Adjusted				As Reported			Adjusted
Sales:
Aerospace & Industrial	$	681,216			$	—		$	681,216			$	649,004			$	—		$	649,004			5	%		5	%
Defense Electronics		683,231				—			683,231				576,161				—			576,161			19	%		19	%
Naval & Power		932,429				—			932,429				834,417				—			834,417			12	%		12	%
Total sales	$	2,296,876			$	—		$	2,296,876			$	2,059,582			$	—		$	2,059,582			12	%		12	%
Operating income (expense):
Aerospace & Industrial(2)	$	100,147			$	4,546		$	104,693			$	101,224			$	—		$	101,224			(1	)%		3	%
Defense Electronics(2)		169,964				1,342			171,306				122,760				—			122,760			38	%		40	%
Naval & Power (1)(2)		134,513				1,101			135,614				132,382				6,669			139,051			2	%		(2	)%
Total segments	$	404,624			$	6,989		$	411,613			$	356,366			$	6,669		$	363,035			14	%		13	%
Corporate and other(2)		(30,863	)			1,624			(29,239	)			(32,457	)			—			(32,457	)		5	%		10	%
Total operating income	$	373,761			$	8,613		$	382,374			$	323,909			$	6,669		$	330,578			15	%		16	%
Operating margins:	As Reported							Adjusted				As Reported							Adjusted				As Reported			Adjusted
Aerospace & Industrial		14.7	%						15.4	%			15.6	%						15.6	%		(90 bps)			(20 bps)
Defense Electronics		24.9	%						25.1	%			21.3	%						21.3	%		360 bps			380 bps
Naval & Power		14.4	%						14.5	%			15.9	%						16.7	%		(150 bps)			(220 bps)
Total Curtiss-Wright		16.3	%						16.6	%			15.7	%						16.1	%		60 bps			50 bps
Segment margins		17.6	%						17.9	%			17.3	%						17.6	%		30 bps			30 bps
(1) Excludes first year purchase accounting adjustments in both the current and prior year periods.
(2) Excludes costs associated with the Company’s 2024 Restructuring Program in the current period.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
SALES BY END MARKET (UNAUDITED)
($’s in thousands)
		Three Months Ended			Three Months Ended
		September 30, 2024			September 30, 2023			% Change
Aerospace & Defense markets:
Aerospace Defense		$	158,980		$	148,023		7	%
Ground Defense			92,973			83,185		12	%
Naval Defense			217,510			179,862		21	%
Commercial Aerospace			96,677			79,703		21	%
Total Aerospace & Defense		$	566,140		$	490,773		15	%
Commercial markets:
Power & Process		$	131,376		$	122,118		8	%
General Industrial			101,402			111,435		(9	%)
Total Commercial		$	232,778		$	233,553		0	%
Total Curtiss-Wright		$	798,918		$	724,326		10	%
		Nine Months Ended			Nine Months Ended
		September 30, 2024			September 30, 2023			% Change
Aerospace & Defense markets:
Aerospace Defense		$	445,158		$	380,095		17	%
Ground Defense			268,672			220,317		22	%
Naval Defense			605,004			532,773		14	%
Commercial Aerospace			279,768			232,226		20	%
Total Aerospace & Defense		$	1,598,602		$	1,365,411		17	%
Commercial markets:
Power & Process		$	394,016		$	373,457		6	%
General Industrial			304,258			320,714		(5	%)
Total Commercial		$	698,274		$	694,171		1	%
Total Curtiss-Wright		$	2,296,876		$	2,059,582		12	%

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
RECONCILIATION OF AS REPORTED TO ADJUSTED DILUTED EARNINGS PER SHARE (UNAUDITED)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2024			2023			2024			2023
Diluted earnings per share – As Reported	$	2.89		$	2.51		$	7.47		$	6.09
First year purchase accounting adjustments		0.02			0.03			0.02			0.13
Restructuring costs		0.06			—			0.15			—
Diluted earnings per share – Adjusted (1)	$	2.97		$	2.54		$	7.64		$	6.22
(1) All adjustments are presented net of income taxes.

Organic Sales and Organic Operating Income

The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic operating income are defined as sales and operating income, excluding contributions from acquisitions and results of operations from divested businesses or product lines during the last twelve months, costs associated with the Company’s 2024 Restructuring Program, and foreign currency fluctuations.

	Three Months Ended
	September 30,
	2024 vs. 2023
	Aerospace & Industrial				Defense Electronics				Naval & Power				Total Curtiss-Wright
	Sales		Operating income		Sales		Operating income		Sales		Operating income		Sales		Operating income
As Reported	4%		(4%)		12%		13%		14%		11%		10%		9%
Less: Acquisitions	0%		0%		0%		0%		(1%)		0%		0%		0%
Restructuring	0%		5%		0%		1%		0%		0%		0%		3%
Foreign Currency	(1%)		(2%)		0%		0%		0%		0%		0%		(1%)
Organic	3%		(1%)		12%		14%		13%		11%		10%		11%
	Nine Months Ended
	September 30,
	2024 vs. 2023
	Aerospace & Industrial				Defense Electronics				Naval & Power				Total Curtiss-Wright
	Sales		Operating income		Sales		Operating income		Sales		Operating income		Sales		Operating income
As Reported	5%		(1%)		19%		38%		12%		2%		12%		15%
Less: Acquisitions	0%		0%		0%		0%		(1%)		0%		0%		0%
Restructuring	0%		4%		0%		1%		0%		0%		0%		2%
Foreign Currency	0%		0%		(1%)		0%		0%		0%		(1%)		1%
Organic	5%		3%		18%		39%		11%		2%		11%		18%

Free Cash Flow and Free Cash Flow Conversion

The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as net cash provided by operating activities less capital expenditures. Adjusted free cash flow excludes payments associated with the Westinghouse legal settlement in the prior year period.

Contacts

Jim Ryan

(704) 869-4621

Jim.Ryan@curtisswright.com

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