Slide 1: 3Q 2018 Earnings Conference Call
3Q 2018 Earnings Conference Call October 31, 2018 NYSE: CW 1 | October 31, 2018 | © 2018 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: 2018 Third Quarter Performance and Full-Year Business Outlook
2018 Third Quarter Performance and Full-Year Business Outlook Third Quarter 2018 Highlights (1) (2) Net Sales up 5% overall (2% organic) – Driven by strong organic demand in power generation and industrial markets – Benefit of DRG acquisition (+$19M) Adjusted Operating Income up 6%; Adjusted Ope
Slide 4: 3Q 2018 End Market Sales Growth
3Q 2018 End Market Sales Growth Key Drivers 3Q’18 % of Total Defense Markets (4% sales growth, (3%) organic) Change Sales Aerospace Defense: Higher sales of flight test Aero Defense (1%) 16% equipment on fighter jet programs, more than offset by lower embedded computing sales on helicopter and Gro
Slide 5: 3Q 2018 Adjusted Operating Income / Margin Drivers
3Q 2018 Adjusted Operating Income / Margin Drivers Change 3Q’18 3Q’17 vs. 2017 ($ in millions) Adjusted(1) Adjusted(1) Adjusted(1) Key Drivers Unfavorable mix Lower sales and unfavorable absorption in Commercial / Industrial $44.8 $46.7 (4%) sensors and controls business Margin 15.2% 15.9% (70 b
Slide 6: 2018E End Market Sales Growth
2018E End Market Sales Growth (Guidance as of October 30, 2018) Updated (in blue) FY2018E FY2018E % of Total (Prior) (Current) Sales Aero Defense 11 - 13% 8 - 10% 16% Ground Defense 0 - 2% No change 4% Naval Defense 20 - 22% 19 - 21% 20% Total Defense 13 - 15% 12 - 14% 40% Including Other Defense (6
Slide 7: 2018E Financial Outlook (Guidance as of October 30, 2018)
2018E Financial Outlook (Guidance as of October 30, 2018) Updated (in blue) 2018 Adjusted (1) Operational 2018 Adjusted (1) 2018 Change vs ($ in millions) 2017 Adjusted (1) (Prior) Changes (Current) 2017 Adjusted (1) Commercial / Indus $1,163 $1,213 - 1,233 $1,213 - 1,233 4 - 6% Defense $555 $575 -
Slide 8: 2018E Financial Outlook (Guidance as of October 30, 2018)
2018E Financial Outlook (Guidance as of October 30, 2018) Updated (in blue) 2018 Adjusted (1) Operational 2018 Adjusted (1) 2018 Change vs ($ in millions, except EPS) 2017 Adjusted (1) (Prior) Changes (Current) 2017 Adjusted (1) Total Operating $335 $371 - 382 $371 - 382 11 - 14% Income Other $16 $1
Slide 9: 2018E Financial Outlook (Guidance as of October 30, 2018)
2018E Financial Outlook (Guidance as of October 30, 2018) Updated (in blue) 2018 2018 Reported Operational 2018 Reported Adjusted (2) ($ in millions) (Prior) Changes (Current) Adjustments(2) (Current) (1) Free Cash Flow $250 - 270 $10 $260 - 280 $50 $310 - 330 Free Cash Flow (1) 93 - 98% 96 - 101% 1
Slide 10: Positioned to Deliver Strong 2018 Results
Positioned to Deliver Strong 2018 Results Synchronized sales growth, up 7 - 9% – Up 4 - 6% organic, increases in all end markets Continued operating margin expansion, up 60 - 80 bps – Adjusted operating margin of 15.3 - 15.5% – Driven by higher sales and benefit of ongoing margin improvement ini
Slide 11: Appendix: Non-GAAP Financial Results
Appendix Non-GAAP Financial Results The company reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "Adjusted" amounts, which are Non-GAAP financial measures described below. We utilize a
Slide 12: 2018E End Market Sales Waterfall (Guidance as of October 30, 2018)
2018E End Market Sales Waterfall (Guidance as of October 30, 2018) Guidance: ($ Millions) Total CW End Markets Defense Markets up 12-14% $2,430 - 2,470 UP 7 - 9% (up 4-6% organic) Comm’l Markets up 3-5% Defense Markets Commercial Markets 40% 60% Naval Commercial Aerospace Power Generation General In
Slide 13: 2018E Financial Outlook (Guidance as of Oct. 30, 2018)
2018E Financial Outlook (Guidance as of Oct. 30, 2018) Updated (in blue) Change in 2018 Prior Acquisition 2018 Updated 2018 Current 2018 Change 2017 Adjusted Reported Valuation Operational Reported Adjusted vs 2017 ($ in millions) (Non-GAAP) (1) (GAAP) Estimates Changes (GAAP) Adjustments(1) (Non-GA
Slide 14: 2018E Financial Outlook (Guidance as of Oct. 30, 2018)
2018E Financial Outlook (Guidance as of Oct. 30, 2018) Updated (in blue) Change in 2018 2018 Current 2018 Prior Acquisition Updated Adjusted 2018 Change ($ in millions, except 2017 Adjusted Reported Valuation Operational Reported (Non-GAAP) vs 2017 (1) (1) (1) (1) EPS) (Non-GAAP) (GAAP) Estimates Ch
Slide 15: Non-GAAP Reconciliation – Organic Results
Non-GAAP Reconciliation – Organic Results Three Months Ended September 30, 2018 vs. 2017 Commercial/Industrial Defense Power Total Curtiss-Wright Operating Operating Operating Operating Sales income Sales income Sales income Sales income Organic 1% (5%) (2%) (3%) 8% 50% 2% 2% Acquisitions 0% 0% 0% 0
Slide 16: Non-GAAP Reconciliations – 3Q 2018 Results
Non-GAAP Reconciliations – 3Q 2018 Results (In millions, except EPS) 3Q-2018 3Q-2017 Change Sales $ 595.4 $ 567.9 5% Reported operating income (GAAP) $ 97.0 $ 92.4 5% Adjustments (1) 1.3 0.0 - Adjusted operating income (Non-GAAP) $ 98.3 $ 92.4 6% Adjusted operating margin (Non-GAAP) 16.5% 16.3% 20 b
Slide 17: Non-GAAP Reconciliation – 2018 Guidance
Non-GAAP Reconciliation – 2018 Guidance 17 | October 31, 2018 | © 2018 Curtiss-Wright