Slide 1: Q2 2020 Earnings Conference Call
Listen-Only dial-in numbers: (844) 220-4970 (domestic) (262) 558-6349 (international) Q2 2020 Earnings Conference Call August 4, 2020 NYSE: CW 1 | August 4, 2020 | © 2020 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: Second Quarter 2020 Business Review and Financial Highlights
Second Quarter 2020 Business Review and Financial Highlights Maintaining comprehensive COVID-19 health and safety protocols Net Sales of $550 million, down 14% – Solid defense market growth, up 5% – Reduced commercial market demand, as expected Adjusted Operating Income down 27%; Adjusted Oper
Slide 4: Second Quarter 2020 End Market Sales Growth
Second Quarter 2020 End Market Sales Growth Q2’20 % of Total Key Drivers Change Sales Defense Markets: Aero Defense 5% 20% Aerospace Defense: Higher defense electronics revenues on various ISR programs Ground Defense (24%) 4% Ground Defense: Lower TDSS revenues on Int’l platforms and Naval Defen
Slide 5: Second Quarter 2020 Adjusted Operating Income / Margin Drivers
Second Quarter 2020 Adjusted Operating Income / Margin Drivers Q2’20 Q2’19 Chg vs. ($ in millions) Adjusted(1) Adjusted(1) Q2’19 Key Drivers Commercial / Industrial $22.1 $51.4 (57%) Lower sales / unfavorable absorption in comm’l markets Partially offset by benefits of cost containment / restruc
Slide 6: Strong Balance Sheet Provides Stability
Strong Balance Sheet Provides Stability CASH AND DEBT LEVELS DEBT AND LEVERAGE RATIOS(1) Cash balance: $155M Adjusted Net Debt / Net Cap: 28% (1) Adjusted Debt : $825M – Manage to internal 45% net debt / net cap limitation – $750M private placement; $75M drawn from revolver Adjusted Net Debt
Slide 7: 2020E End Market Sales Growth (Guidance as of August 3, 2020)
2020E End Market Sales Growth (Guidance as of August 3, 2020) Updated 2020E 2020E 2020E (Feb 2020) (Current) % Total Sales Key Drivers Aero Defense 4% - 6% No Change 19% Favorable growth on key platforms (esp. F-35) Ground Defense 5% - 7% (5% - 7%) 4% Lower sales on international ground platform
Slide 8: 2020E Financial Outlook (Guidance as of August 3, 2020)
2020E Financial Outlook (Guidance as of August 3, 2020) Updated 2020E Adjusted (2) 2020E Adjusted (2) 2020E Change vs (1)(2) ($ in millions) (Feb 2020) (Current) 2019 Adjusted 2020 Key Drivers Commercial / Industrial $1,140 - 1,160 $935 - 965 (15% - 18%) Reduced demand in commercial aerospace and
Slide 9: 2020E Financial Outlook (Guidance as of August 3, 2020)
2020E Financial Outlook (Guidance as of August 3, 2020) Updated 2020E Adjusted (3) 2020E Adjusted (3) 2020E Change vs ($ in millions, except EPS) (Feb 2020) (Current) 2019 Adjusted (2)(3) 2020 Key Drivers Total Operating Income $428 - 437 $376 - 389 (5% - 8%) Other Income/(Expense) $24 - 25 $23 - 24
Slide 10: 2020 Summary and Expectations
2020 Summary and Expectations Maintain outlook for solid revenue growth in Defense; Commercial markets expected to gradually improve remainder of year – Acquisitions providing modest boost to top-line Agile business model helps mitigate impact of reduced profitability – Benefit of increased and
Slide 11: Appendix
Appendix Non-GAAP Financial Results The company reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "Adjusted" amounts, which are Non- GAAP financial measures described below. We utilize
Slide 12: FY2020E Guidance: Sales Waterfall (as of August 3, 2020)
FY2020E Guidance: Sales Waterfall (as of August 3, 2020) Guidance: Overall DOWN 4 - 6% ($ Millions) Total CW End Markets Defense Markets UP 8 - 10% $2,350 - 2,400 Comm’l Markets DOWN 14 - 16% Defense Markets Commercial Markets 50% 50% Naval Commercial Aerospace Power Generation General Industrial 27
Slide 13: Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted)
Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted) 13 | August 4, 2020 | © 2020 Curtiss-Wright
Slide 14: Non-GAAP Reconciliations – Q2 2020 Results
Non-GAAP Reconciliations – Q2 2020 Results (In millions, except EPS) Q2-2020 Q2-2019 Change Sales $ 550.0 $ 639.0 (14%) Reported operating income (GAAP) $ 55.3 $ 105.7 (48%) Adjustments (1) 23.2 2.0 Adjusted operating income (Non-GAAP) $ 78.5 $ 107.7 (27%) Adjusted operating margin (Non-GAAP) 14.3%
Slide 15: Non-GAAP Reconciliation – Organic Results
Non-GAAP Reconciliation – Organic Results Three Months Ended June 30, 2020 vs. 2019 Commercial/Industrial Defense Power Total Curtiss-Wright Operating Operating Operating Operating Sales income Sales income Sales income Sales income Organic (28%) (59%) (2%) (11%) (11%) (14%) (17%) (35%) Acquisitions
Slide 16: Non-GAAP Reconciliation – Adjusted Debt and Adjusted Net Debt
Non-GAAP Reconciliation – Adjusted Debt and Adjusted Net Debt CURTISS-WRIGHT CORPORATION and SUBSIDIARIES Adjusted Debt and Adjusted Net Debt (Unaudited, in thousands) As of June 30, 2020 Current portion of long-term and short-term debt $ — Long-term debt 834,802 Total debt $ 834,802 Less: Unamortiz
Slide 17: Non-GAAP Reconciliation – EBITDA
Non-GAAP Reconciliation – EBITDA CURTISS-WRIGHT CORPORATION and SUBSIDIARIES EBITDA (Unaudited, in thousands) For the trailing 12 months ended 6/30/2020 Net Earnings $ 254,700 Add back: Interest 32,121 Add back: Income Taxes 81,136 Add back: Depreciation and Amortization 107,384 EBITDA $ 475,341 EBI
Slide 18: Non-GAAP Reconciliation – Leverage Ratios
Non-GAAP Reconciliation – Leverage Ratios CURTISS-WRIGHT CORPORATION and SUBSIDIARIES (Unaudited, in thousands, except ratios) Adjusted Net Debt-to-Net Capitalization As of June 30, 2020 Adjusted Net Debt $ 669,617 Total Stockholders' equity 1,713,295 Net Capitalization $ 2,382,912 28.1 % Adjusted D