Slide 1: 1Q 2016 Earnings Conference Call
1Q 2016 Earnings Conference Call May 5, 2016 NYSE: CW 1 | May 5, 2016 | © 2016 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 web site from one to twelve months following the initial presentation, but content will not be updated to reflect
Slide 3: First Quarter 2016 Highlights
First Quarter 2016 Highlights Diluted EPS of $0.73, ahead of expectations, reflecting: – Lower pension and other corporate costs – Benefits of operational improvement and cost reduction initiatives Strong Free Cash Flow of $61M, FCF conversion 187% Net Sales decreased 8% – Influenced by lower
Slide 4: First Quarter 2016 End Market Sales
First Quarter 2016 End Market Sales 1Q’16 Results: 1Q’16 % of Total Defense Markets (4%); organic (3%) Change Sales Commercial Markets (10%); organic (9%) Aero Defense (14%) 12% Ground Defense 3% 4% Key Drivers: Naval Defense 3% 18% General Industrial: Significantly lower valve sales, primaril
Slide 5: First Quarter 2016 Operating Income / Margin Drivers
First Quarter 2016 Operating Income / Margin Drivers ($ in millions) Change 1Q’16 1Q’15 vs. 2015 Change vs. 2015, Commercial / Industrial $30.1 $43.3 (31%) excluding one-time, Margin 10.9% 14.5% (360 bps) Progress Energy AP1000 plant Defense 16.8 18.0 (7%) termination in 2015 Margin 16.0% 15.9% +10
Slide 6: 2016E Financial Outlook (Guidance as of May 4, 2016) No Change
2016E Financial Outlook* (Guidance as of May 4, 2016) No Change ($ in millions) FY2015 Pro Forma FY2016E Growth % vs 2015 Commercial / Industrial $1,185 $1,145 - 1,170 (1 - 3%) Defense $477 $490 - 500 3 - 5% Power $523 $535 - 550 2 - 5% Total Sales $2,186 $2,170 - 2,220 Down 1% to Up 1% Commercial /
Slide 7: 2016E Financial Outlook (Guidance as of May 4, 2016) Updated
2016E Financial Outlook (Guidance as of May 4, 2016) Updated ($ in millions) FY2016E FY2016E Growth % (Prior) (Current) vs 2015 Free Cash Flow (1) $280 - 300 $290 - 310 7 - 14% Free Cash Flow Conversion(2) 152 - 157% 158 - 163% Depreciation & Amortization $100 - 110 $100 - 110 Capital Expenditures $
Slide 8: AP1000 Program Highlights
AP1000 Program Highlights Curtiss-Wright providing reactor coolant pump (RCP) technology on Westinghouse AP1000 power plant Began shipping RCPs to China in 4Q’15 (2007 contract) – Four shipped and installed in Sanmen 1 – Four shipped and installed in Haiyang 1 – Remaining 8 RCPs to ship in 2H’16
Slide 9: Strategic Margin Drivers
Strategic Margin Drivers 14.0% - 14.2% 13.3% Leveraging the benefits of 12.6% ONE Curtiss-Wright – Portfolio Rationalization – Lean/Supply Chain – Shared Services 9.3% – Consolidations – Shift to Low Cost Economies – Segment Focus Operational and productivity improvement initiatives 2013 Reporte
Slide 10: Balanced Capital Allocation
Balanced Capital Allocation Committed to steady return of capital to shareholders – At least $100M in expected share repurchases in 2016 Return of Capital – $300M in 2015 share repurchases – Steady dividend payout Growth through strategic Operational acquisitions Acquisitions Requirements Inte
Slide 11: Outlook for 2016 and Closing Comments
Outlook for 2016 and Closing Comments Expect solid sales growth in defense and power markets, mitigating a challenging industrial outlook On track for continued operating margin expansion, up 70 - 90 bps to 14.0% - 14.2%* – Led by operational improvement and cost reduction initiatives – Goal to
Slide 12: Appendix
Appendix 12 | May 5, 2016 | © 2016 Curtiss-Wright
Slide 13: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Revenue and Organic Operating income The Corporation discloses organic revenue and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic revenue and organic operating inco
Slide 14: 2016E End Market Sales Outlook (Guidance as of May 4, 2016)
2016E End Market Sales Outlook* (Guidance as of May 4, 2016) % of Total FY2016E Sales Aero Defense 1 - 3% 14% Ground Defense 4 - 6% 4% Naval Defense 0 - 2% 18% Total Defense Up 2% to 4% 37% Including Other Defense Commercial Aero (2 - 4%) 18% Power Generation 4 - 6% 20% Total Oil & Gas General Indus
Slide 15: 2016 End Market Sales Waterfall (Guidance as of May 4, 2016)
2016 End Market Sales Waterfall (Guidance as of May 4, 2016) ($ Millions) Total CW End Markets $2,170 - 2,220 Defense Markets Commercial Markets 37% 63% Naval Commercial Aerospace Power Generation General Industrial 18% 18% 20% 25% Aerospace Aircraft Equipment Aftermarket Nuclear Industrial Vehicles