Slide 1: 1Q 2019 Earnings Conference Call
1Q 2019 Earnings Conference Call May 9, 2019 NYSE: CW 1 | May 9, 2019 | © 2019 Curtiss-Wright
Slide 2: Safe Harbor Statement
Safe Harbor Statement Please note that the information provided in this presentation is accurate as of the date of the original presentation. The presentation will remain posted on this website from one to twelve months following the initial presentation, but content will not be updated to reflect n
Slide 3: 2019 First Quarter Performance and Full-Year Business Outlook
2019 First Quarter Performance and Full-Year Business Outlook First Quarter 2019 Highlights Net Sales up 6% overall (2% organic) – Strong growth in naval defense, including contribution from DRG Adjusted Operating Income up 12%; Adjusted Operating Margin of 12.5%, up 70 bps – Strong performance
Slide 4: First Quarter 2019 End Market Sales Growth
First Quarter 2019 End Market Sales Growth Key Drivers 1Q’19 % of Total Defense Markets (12% sales growth, 3% organic) Change Sales Aerospace Defense: Higher sales on helicopters offset Aero Defense Flat 14% by lower revenues on UAV programs Ground Defense: Lower revenues on ground radar Ground
Slide 5: First Quarter 2019 Adjusted Operating Income / Margin Drivers
First Quarter 2019 Adjusted Operating Income / Margin Drivers Change 1Q’19 1Q’18 vs. 2018 ($ in millions) Adjusted(1) Reported Reported(1) Key Drivers Higher revenues and favorable absorption for Commercial / Industrial $39.4 $39.2 1% industrial valves and sensors products Margin 13.4% 13.2% 20 bp
Slide 6: 2019E End Market Sales Growth (Guidance as of May 8, 2019)
2019E End Market Sales Growth (Guidance as of May 8, 2019) Updated (in blue) 2019E 2019E 2019E (Prior) (Current) % of Total Sales Aero Defense 6 - 8% 8 - 10% 16% Ground Defense 5 - 7% 5 - 7% 4% Naval Defense 6 - 8% 8 - 10% 21% Total Defense 6 - 8% 8 - 10% 41% Commercial Aero 4 - 6% 4 - 6% 17% Power
Slide 7: 2019E Financial Outlook (Guidance as of May 8, 2019)
2019E Financial Outlook (Guidance as of May 8, 2019) Updated (in blue) 2019E Adjusted Operational 2019E Adjusted (1) 2019E Change vs ($ in millions) (Prior) Changes (Current) 2018 Adjusted (1) Commercial / Industrial $1,245 - 1,270 $5-10 $1,255 - 1,275 4 - 5% Defense $565 - 575 $10 $575 - 585 4 - 5%
Slide 8: 2019E Financial Outlook (Guidance as of May 8, 2019)
2019E Financial Outlook (Guidance as of May 8, 2019) Updated (in blue) 2019E Adjusted Operational 2019E Adjusted (1) 2019E Change vs ($ in millions, except EPS) (Prior) Changes (Current) 2018 Adjusted (1) Total Operating Income $396 - 405 $10 $406 - 415 6 - 9% Other Income/(Expense) $19 $19 Interest
Slide 9: 2019E Financial Outlook (Guidance as of May 8, 2019)
2019E Financial Outlook (Guidance as of May 8, 2019) Updated (in blue) 2019E 2019E 2019E Reported Operational Reported Adjusted (2) (2) ($ in millions) (Prior) Changes (Current) Adjustments (Current) (1) Free Cash Flow $300 - 310 $10 $310 - 320 $20 $330 - 340 Free Cash Flow (1) ~102% ~105% ~110% Con
Slide 10: TCG Acquisition
TCG Acquisition Completed acquisition of Tactical Communications TCG Group (TCG) on March 18, 2019 Purchase $50M (cash) Benefits of TCG acquisition Price – Leading supplier of tactical data link (TDL) software EBITDA ~10x NTM Multiple(1) solutions for critical military communications systems – E
Slide 11: Positioned to Deliver Strong 2019 Results
Positioned to Deliver Strong 2019 Results Higher sales in all end markets driving overall growth of 4 - 6% Continued operating margin expansion, up 40 - 50 bps – Adjusted operating margin of 16.2% - 16.3% – Driven by improved sales outlook and benefit of ongoing margin improvement initiatives –
Slide 12: Appendix: Non-GAAP Financial Results
Appendix Non-GAAP Financial Results The company reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "Adjusted" amounts, which are Non-GAAP financial measures described below. We utilize a
Slide 13: FY2019E End Market Sales Waterfall (Guidance as of May 8, 2019)
FY2019E End Market Sales Waterfall (Guidance as of May 8, 2019) ($ Millions) Total CW End Markets Guidance: $2,510 - 2,550 UP 4 - 6% Defense Markets up 8-10% Comm’l Markets up 1-3% Defense Markets Commercial Markets 41% 59% Naval Commercial Aerospace Power Generation General Industrial 21% 17% 17% 2
Slide 14: Non-GAAP Reconciliation – Organic Results
Non-GAAP Reconciliation – Organic Results Three Months Ended March 31, 2019 vs. 2018 Commercial/Industrial Defense Power Total Curtiss-Wright Operating Operating Operating Operating Sales income Sales income Sales income Sales income Organic 1% 0% 3% (12%) 6% 35% 2% 5% Acquisitions 0% 0% 0% (3%) 18%
Slide 15: Non-GAAP Reconciliations – 1Q 2019 Results
Non-GAAP Reconciliations – 1Q 2019 Results (In millions, except EPS) 1Q-2019 1Q-2018 Change Sales $ 578.3 $ 547.5 6% Reported operating income (GAAP) $ 72.0 $ 64.5 12% Adjustments (1) 0.5 0.0 - Adjusted operating income (Non-GAAP) $ 72.5 $ 64.5 12% Adjusted operating margin (Non-GAAP) 12.5% 11.8% 70
Slide 16: Non-GAAP Reconciliation – 2019 vs. 2018 Adjusted
Non-GAAP Reconciliation – 2019 vs. 2018 Adjusted 16 | May 9, 2019 | © 2019 Curtiss-Wright