Slide 1: Soaring to New Heights: 4Q 2010 Earnings Conference Call
For 80 Years & Counting SOARING TO NEW HEIGHTS 4Q 2010 Earnings Conference Call February 15, 2011
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 web site from one to twelve months following the initial presentation, but content will not be updated to reflect
Slide 3: Overview of 2010 Results
Overview of 2010 Results • Solid sales and profitability • Continued focus on execution and cost control • Earnings led by solid operating performance across all three segments • Strong financial position and cash flow generation heading into 2011
Slide 4: Fourth Quarter 2010 Results
Fourth Quarter 2010 % Change vs. Prior Yr Sales: Flow Control $ 283 3% Motion Control 182 3% Metal Treatment 59 13% Total Sales $ 523 4% Operating Income: Flow Control $ 37 4% Motion Control 26 (14%) Metal Treatment 8 73% Total Segments $ 71 1% Corporate and Other (14) (11%) Total Operating Income $
Slide 5: Full Year 2010 Results
Full Year 2010 % Change vs. Prior Yr Sales: Flow Control $ 1,025 4% Motion Control 647 4% Metal Treatment 221 9% Total Sales $ 1,893 5% Operating Income: Flow Control $ 104 13% Motion Control 80 (1%) Metal Treatment 26 30% Total Segments $ 211 9% Corporate and Other (31) (27%) Total Operating Income
Slide 6: Results - Additional Metrics
2010 Results - Additional Metrics • New Orders up 11% • Backlog up 3% • Strong Free Cash Flow* • Full Year 2010: $119 M • Lower Capital Expenditures • Stable Balance Sheet • Pension Update * Defined as cash flow from operations less capital expenditures
Slide 7: Segment Review - Flow Control
2010 Segment Review - Flow Control 4Q 2010 Results • Sales up 3%, organic operating income up 5%* • Led by strong sales in naval defense and power generation • Reduced demand to oil & gas and general industrial Full Year 2010 Results • Sales up 4%, organic operating income up 15%* • Strong sales in
Slide 8: Segment Review - Motion Control
2010 Segment Review - Motion Control Segment Sales: $647 M 4Q 2010 Results • Sales up 3%, organic operating income down 13%* • Led by strong sales in commercial aero and general industrial • Reduced demand in aerospace and ground defense Full Year 2010 Results • Sales up 4%, organic operating income
Slide 9: Segment Review - Metal Treatment
2010 Segment Review - Metal Treatment Segment Sales: $221 M 4Q 2010 Results • Sales up 13%, organic operating income up 78%* • Led by higher demand for shot peening and heat treating services • Strong sales to general industrial and modest increase in aerospace defense Full Year 2010 Results • Sales
Slide 10: End Markets Summary
2010 End Markets Summary* Key Positives • Naval defense remained strong • Continued demand for embedded computing, and sensors and controls products • Most Commercial/Industrial markets ended strongly Key Negatives • Cancellation of F-22 and FCS programs • Winding down of sales related to CVN-78 • W
Slide 11: Summary - Aerospace Defense
2010 Summary - Aerospace Defense 4Q 2010 Results • Strength in helicopters, P-8 Poseidon, Global Hawk and other UAV programs • Overall sales relatively flat due to impact of F-22 cancellation Full Year 2010 Results • Strong sales of embedded computing products on Global Hawk and helicopters • Lower
Slide 12: Summary - Ground Defense
2010 Summary - Ground Defense 4Q 2010 Results • Impacted by lower sales on Bradley and cancellation of FCS program • Slightly higher sales on other platforms Full Year 2010 Results • Continued overall weakness in ground defense market • Improved demand for international ground defense platforms 2010
Slide 13: Summary - Naval Defense
2010 Summary - Naval Defense 4Q 2010 Results • Led by strong sales on VA class submarine and CVN-79 aircraft carrier • Reduced sales related to DDG-1000 Full Year 2010 Results • Continued strength in submarines and aircraft carrier sales • Full production on EMALS aircraft launching system 2010* * P
Slide 14: Summary - Commercial Aerospace
2010 Summary - Commercial Aerospace 4Q 2010 Results • Improved sales due to increased production levels at Boeing • Performed metal treatment services on various commercial aircraft Full Year 2010 Results • Benefitted from ongoing ramp in commercial aircraft production rates • Experienced strong sal
Slide 15: Summary - Oil & Gas
2010 Summary - Oil & Gas 4Q 2010 Results • Improved demand for aftermarket sales opportunities • Continued delays in capital spending worldwide Full Year 2010 Results • Rebound in coker equipment sales in second half of 2010 • Prolonged delays in capital spending on larger projects • Received 3Q’10
Slide 16: Summary - Power Generation
2010 Summary - Power Generation 4Q 2010 Results • Driven by demand for upgrades and plant maintenance projects • Decrease in new nuclear construction revenues related to China AP1000 Full Year 2010 Results • Continued demand for content related to plant life extension process and power uprates on ex
Slide 17: Summary - General Industrial
2010 Summary - General Industrial 4Q 2010 Results • Improving economy led to higher sales volumes • Surge in demand for metal treatment services • Strong sales to automotive industry Full Year 2010 Results • Recovery starting to take hold • Strong demand from automotive and transportation industries
Slide 18: 2011E Market Outlook
Management Guidance FY2011E Aero Defense 1 - 3% Ground Defense 8 - 10% Naval Defense 1 - 3% Total Defense Including Other Defense 2 - 4% Commercial Aero 10 - 12% Oil & Gas 3 - 5% Power Generation 1 - 2% General Industrial 9 - 11% Total Commercial 5 - 7% Total Curtiss-Wright 4 - 5% 2011E Market Outlo
Slide 19: 2011E Financial Outlook
Management Guidance FY2011E Total Sales $1,960 - 1,990M 4% - 5% Flow Control $1,050 - 1,060M 2% - 3% Motion Control $670 - 680M 4% - 5% Metal Treatment $240 - 250M 9% - 13% Operating Income $200 - 207M 11% - 15% Diluted EPS $2.48 - 2.58 8% - 12% Diluted Shares Outstanding 47.3M Effective Tax Rate 33
Slide 20: 2011E Financial Outlook
Management Guidance FY2011E Free Cash Flow $90 - 100M Depreciation & Amortization ~$82M CapEx ~$70M Pension Expense ~$23M 2011E Financial Outlook (as of February 14, 2011)
Slide 21: Outlook for 2011 and Closing Comments
Outlook for 2011 and Closing Comments • Sales up 4-5% with 8-12% EPS growth • Continued execution and margin expansion • Solid performance across all end markets • Defense business is stable and will start to overcome several 2010 headwinds • Commercial markets rebounding as economy continue to impr
Slide 22: Appendix
Appendix
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation CURTISS-WRIGHT CORPORATION and SUBSIDIARIES ‘NON-GAAP FINANCIAL DATA (UNAUDITED) athousands) Three Months Ended Twelve Months Ended December 31 December 31, Change Change 2010 2009 % 2010 2009 *% Sales ‘Organic ssi4o20 $502; S 186404 $1,809,002 3.0% Incremental 10,265 26517 ©