Slide 1: 1Q 2013 Earnings Conference Call
1Q 2013 Earnings Conference Call May 2, 2013 Transforming for the Future First Quarter 2013
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 First Quarter 2013 Results
Overview of First Quarter 2013 Results • Sales increased 18%, driven by double-digit gains in all three segments • Benefiting from acquisitions and growth in commercial markets • Timing on large programs and various contract completions led to softness in defense • Operating income increased 7% • Or
Slide 4: 1Q 2013 End Markets Summary Defense
1Q 2013 End Markets Summary Defense Key Positives Aero Defense • Increased revenues from ramp up on Oil & Gas 10% Ground CVN-79 aircraft carrier 17% Defense 4% • Awarded new contract for shipboard helicopter handling systems • Slight uptick in ground defense Naval Defense 14% Key Challenges Power Ge
Slide 5: 1Q 2013 End Markets Summary Commercial
1Q 2013 End Markets Summary Commercial Key Positives Aero • Solid organic growth led by ongoing ramp Oil & Gas Defense up in commercial aircraft production rates 17% 10% Ground and Emergent Operations facility Defense 4% • Solid demand on domestic nuclear operating reactors and increased Naval domes
Slide 6: 2013E Financial Outlook
2013E Financial Outlook (as of May 1, 2013) Management Guidance FY2012A FY2013E Total Sales $2,098M $2,480 - 2,520M Flow Control $1,095M $1,300 - 1,320M Controls $727M $865 - 875M Surface Technologies $276M $315 - 325M Total Operating Income $161M $229 - 237M CW Margin 7.7% 9.2% - 9.4% Flow Control
Slide 7: 2013E Financial Outlook
2013E Financial Outlook (as of May 1, 2013) Management Guidance FY2012A FY2013E Pension Expense $27M $33 - 34M Interest Expense $26M $39 - 40M Diluted EPS $1.95 $2.70 - 2.80 Diluted Shares Outstanding 47.4M 47.6M Effective Tax Rate 31.8% 32.0% Free Cash Flow (1) $70M $90 - 100M Depreciation & Amorti
Slide 8: Acquisition Integration Update
Acquisition Integration Update Williams Controls Completed Tasks and Status • Elimination of public company costs • Consolidation of Suzhou, China manufacturing facilities • Integration of industrial sales and marketing teams • Integration Status: On Plan Future Opportunities • Exploit opportunities
Slide 9: Acquisition Integration Update
Acquisition Integration Update Exlar Completed Tasks and Status • Integration of industrial sales and marketing teams • Integration Status: On Plan Future Opportunities • Leverage market penetration within aerospace, defense and industrial markets • Exploit opportunities to leverage Controls and Flo
Slide 10: Acquisition Integration Update
Acquisition Integration Update AP Services Completed Tasks and Status • Fully integrated into CW supply chain • Training of AP Services sales team to represent existing Midwest CW facility • Integration Status: On Plan Future Opportunities • Integration of product line management into CW’s distribut
Slide 11: Acquisition Integration Update
Acquisition Integration Update Cimarron Completed Tasks and Status • Implementation of various operational improvements • Completion of HR and IT integration • Integration Status: On Plan Future Opportunities • Production of Cimarron equipment in CW’s existing vessel facility in Texas (Currently in
Slide 12: Evolving Market Exposure
Evolving Market Exposure (2013E Guidance as of May 1, 2013) 2013E with Acquisitions 30% Defense 18% $2,480 - Oil & Gas 2,520 M 18% Industrial Power Gen 18% 16% Comm Aero Geographic Diversification ● Balanced Market Offering First Quarter 2013 12
Slide 13: Outlook for 2013 and Closing Comments
Outlook for 2013 and Closing Comments • Maintain outlook for strong, double-digit growth in sales, operating income and EPS • Solid performances anticipated in all commercial markets • Mixed performance in defense, with solid rebound in naval market despite continued uncertainty impacting industry •
Slide 14: Appendix
Appendix 14 First Quarter 2013
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation 15 First Quarter 2013
Slide 16: 1Q 2013 Segment Review – Flow Control
1Q 2013 Segment Review – Flow Control Naval Defense 24% Oil & Gas 30% Gen Industrial 8% Comm Aero 2% Power Gen 36% Segment Sales: $311 M Note: Percentages in chart relate to First Quarter 2013 sales. 16 First Quarter 2013
Slide 17: 1Q 2013 Segment Review – Controls
1Q 2013 Segment Review – Controls Aero Defense 27% Comm Aero 29% Ground Defense 12% Naval Defense 4% Other Defense & Gen Industrial Gov't. 26% 2% Segment Sales: $205M Note: Percentages in chart relate to First Quarter 2013 sales. 17 First Quarter 2013
Slide 18: 1Q 2013 Segment Review – Surface Technologies
1Q 2013 Segment Review – Surface Technologies Comm Aero 40% Gen Industrial 34% Power Gen 7% Other Defense & Aero Defense Oil & Gas Gov't. 10% 8% 1% Segment Sales: $78 M Note: Percentages in chart relate to First Quarter 2013 sales. 18 First Quarter 2013
Slide 19: 2013E Market Outlook
2013E Market Outlook (as of May 1, 2013) Management Guidance FY2013E Aero Defense (9) - (13%) Ground Defense (15) - (19%) Naval Defense 7 - 11% Total Defense Flat to Down 4% Including Other Defense Commercial Aero 7 - 11% Oil & Gas 70 - 74% Power Generation 3 - 7% General Industrial 66 - 70% Total C