Woodward, Inc. · NASDAQ:WWD

Woodward — Q3 FY2019 Earnings Presentation

19 slides from Woodward's earnings presentation, Aug 5, 2019

  1. Slide 1: Fiscal Year 2019 Third Quarter Results

    Fiscal Year 2019 Third Quarter Results AUGUST 5, 2019 PROPRIETARY INFORMATION - © 2019 WOODWARD, INC. PAGE 1

  2. Slide 2: Today's Agenda

    Today’s Agenda  Highlights Don Guzzardo  Market Review Tom Gendron  Financial Results & Outlook Bob Weber  Q&A PROPRIETARY INFORMATION - © 2019 WOODWARD, INC. PAGE 2

  3. Slide 3: Cautionary Statement

    Cautionary Statement Information in this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, including, but not limited to, statements regarding our expectations related to our full fiscal y

  4. Slide 4: New Revenue Recognition Standard (ASC 606)

    New Revenue Recognition Standard (ASC 606)  Adopted October 1, 2018  Fiscal 2019 results presented under ASC 606 • Prior year results presented under previous standard, ASC 605 • Primary impact anticipated to be the inclusion of customer provided inventory in net sales with no related earnings  F

  5. Slide 5: Q3 Fiscal Year 2019 Highlights

    Q3 Fiscal Year 2019 Highlights  Net sales of $752 million • Compared to $588 million last year • Organic net sales were $673 million, compared to $563 million in prior year, 20% increase  Net earnings of $66 million, or $1.02 per share • Compared to $49 million, or $0.77 per share last year  Adju

  6. Slide 6: Aerospace

    Aerospace  Aerospace segment performing well • Ramp-up continues for next gen, fuel efficient narrowbody aircraft • Increased content • Strong demand for new aircraft  Defense • Favorable defense budgets • Strength in fixed wing and guided weapons  Commercial Aftermarket • 9% increase for quarter

  7. Slide 7: Industrial

    Industrial  Power generation • Natural gas engines and clean burning diesel engines gaining market share • Gas turbine market continues to stabilize — Higher content on new turbines will allow us to grow faster than market • Renewables – being impacted by reduction of incentives — Significant custo

  8. Slide 8: Q3 FY 2019 Consolidated Results

    Q3 FY 2019 Consolidated Results Net Earnings (mil $) Woodward Sales (mil $) Reported Adjusted Reported 84 79 Organic 71 66 59 ASC 605 49 752 673 701 588 563 Q3 2019 ASC 606 Q3 2019 ASC 605 Q3 2018 ASC 605 Earnings Per Share Reported Adjusted $1.30 $1.22 $1.02 $1.12 $0.92 $0.77 Q3 2019 Q3 2018 ASC 60

  9. Slide 9: Comparison under ASC 606 and ASC 605

    Comparison under ASC 606 and ASC 605 Woodward, Inc. and Subsidiaries Comparison of financial results under ASC 606 and ASC 605 As reported As adjusted (Non U.S. GAAP) Three-Months Ended June 30, Three-Months Ended June 30, 2019 2018 2019 2018 (Unaudited - in thousands, except per share amounts) ASC

  10. Slide 10: Aerospace Q3 Fiscal Year 2019 Results

    Aerospace Q3 Fiscal Year 2019 Results  Segment Net Sales Aerospace Sales (mil $) • Strong OEM and aftermarket for both commercial and defense 499 448 405  Segment Earnings ASC 606 ASC 605 • Leverage on higher sales volume Q3 2019 Q3 2018 ASC 605 Segment Margin % Segment Earnings (mil $) 21.7% 20.7

  11. Slide 11: Industrial Q3 Fiscal Year 2019 Results

    Industrial Q3 Fiscal Year 2019 Results  Segment Net Sales Industrial Sales (mil $) • Increase primarily due to addition of Woodward L’Orange, improved recip engines, stability in industrial turbines Reported 253 Organic  Adjusted Segment Earnings 175 184 159 • Increase due to addition of Woodward

  12. Slide 12: Selected Financial Items

    Selected Financial Items * Gross margin defined as (Net Sales less Cost of Goods Sold) / (Net Sales) PROPRIETARY INFORMATION - © 2019 WOODWARD, INC. PAGE 12

  13. Slide 13: Fiscal Year 2019 Outlook

    Fiscal Year 2019 Outlook Woodward Aerospace  Revenue ~$2.9 billion  Revenue up ~19%  Effective tax rate ~19%  Margin to be ~20%  Free cash flow ~$300 million Industrial  Adjusted earnings per share  Revenue up ~35% between $4.70 and $4.80  Margin to be slightly less (65 million shares) than

  14. Slide 14: Appendix

    Appendix PROPRIETARY INFORMATION - © 2019 WOODWARD, INC. PAGE 14

  15. Slide 15: Non-U.S. GAAP Measures

    Non-U.S. GAAP Measures Q3 FY 19 Q3 FY 18 Q3 FY 19 Q3 FY 18 Earnings Per Earnings Per (mils) (mils) Net Earnings Share Net Earnings Share (mils) (mils) (mils) (mils) Industrial Segment Earnings $ 26.2 $ 10.9 Net Earnings $ 66.1 $ 1.02 $ 49.1 $ 0.77 Purchase accounting impacts 2.6 8.3 Non-U.S. GAAP Ad

  16. Slide 16: Non-U.S. GAAP Measures (cont.)

    Non-U.S. GAAP Measures (cont.) Q3 FY 19 Q3 FY 18 Q3 FY 19 Q3 FY 18 (mils) (mils) (mils) (mils) Net Earnings $ 66.1 $ 49.1 Cash From Operations $ 219.2 $ 162.1 Income Taxes 26.2 5.3 Payments for PP&E (77.9) (89.6) Interest Expense 10.8 10.1 Free Cash Flow1 $ 141.3 $ 72.5 Interest Income (0.3) (0.3) E

  17. Slide 17: Non-U.S. GAAP Measures (cont.)

    Non-U.S. GAAP Measures (cont.) Q3 FY 19 Q3 FY 18 (mils) (mils) Net Earnings $ 66.1 $ 49.1 Income Taxes 26.2 5.3 Interest Expense 10.8 10.1 Interest Income (0.3) (0.3) EBIT1 102.8 64.1 Amortization of Intangibles 11.3 11.4 Depreciation Expense 21.7 17.7 EBITDA1 135.7 93.2 Restructuring and other char

  18. Slide 18: Explanation of Non-U.S. GAAP Measures

    Explanation of Non-U.S. GAAP Measures 1Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted Industrial segment earnings, adjusted EBIT (earnings before interest and taxes) and adjusted EBITDA (earnings, before interest, taxes, depreciation and amortization),

  19. Slide 19: Woodward - Always Innovating for a Better Future

    MW woopwarb Always Innovating for a Better Future

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