Slide 1: 2Q 2013 Earnings Conference Call
2Q 2013 Earnings Conference Call August 1, 2013 Transforming for the Future Second 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 Second Quarter 2013 Results
Overview of Second Quarter 2013 Results • Sales increased 17%, driven by double-digit gains across all three segments o Benefiting from acquisitions and growth in commercial markets o Timing on large programs and various contract completions led to softness in defense • Operating income increased 43
Slide 4: 2Q 2013 End Markets Summary Defense
2Q 2013 End Markets Summary Defense Key Positives Aero Defense • Increased revenues from ramp up on 11% Ground Oil & Gas CVN-79 aircraft carrier and CVN-72 18% Defense 3% refueling and overhaul program • Higher revenues on JSF program Naval Defense 15% Key Challenges Power Gen • Indirect impact of s
Slide 5: 2Q 2013 End Markets Summary Commercial
2Q 2013 End Markets Summary Commercial Key Positives Aero Oil & Gas Defense • Ongoing ramp up in commercial aircraft 18% 11% Ground production rates and Emergent Defense 3% Operations facility producing solid organic growth • Solid aftermarket demand on domestic Naval Defense nuclear reactors 15% •
Slide 6: 2013E Financial Outlook
2013E Financial Outlook (as of July 31, 2013) FY2013E FY2013E Management Guidance (Prior) (Current) Total Sales $2,480 - 2,520M $2,480 - 2,520M Flow Control $1,300 - 1,320M $1,300 - 1,320M Controls $865 - 875M $865 - 875M Surface Technologies $315 - 325M $315 - 325M Total Operating Income $229 - 237
Slide 7: 2013E Financial Outlook
2013E Financial Outlook (as of July 31, 2013) FY2013E FY2013E Management Guidance (Prior) (Current) Pension Expense $33 - 34M $33 - 34M Interest Expense $39 - 40M $39 - 40M Diluted EPS $2.70 - 2.80 $2.75 - 2.85 Diluted Shares Outstanding 47.6M 47.6M Effective Tax Rate 32.0% 32.0% Free Cash Flow (1)
Slide 8: Acquisition Integration Update
Acquisition Integration Update Williams Controls Completed Tasks and Status • Consolidation of Suzhou, China manufacturing facilities • Integration of industrial sales and marketing teams (new leadership in place) • Completion of HR and Finance integrations • Integration Status: Ahead of Plan Future
Slide 9: Acquisition Integration Update
Acquisition Integration Update Exlar Completed Tasks and Status • Leveraged CW supply chain management and implemented various cost reduction initiatives • Leveraging Exlar motor design expertise to enhance CW design methods • Cross market new business engagements through CW relationships in play •
Slide 10: Acquisition Integration Update
Acquisition Integration Update AP Services Completed Tasks and Status • Product line fully integrated into CW supply chain • Sales team fully integrated into joint BU sales channel • Integration of ERP, financial reporting, lean and safety systems to CW platforms • Integration Status: On Plan Future
Slide 11: Acquisition Integration Update
Acquisition Integration Update Cimarron Completed Tasks and Status • Revised previous out-sourcing plans - Direct production of Cimarron equipment at CW’s existing vessel facility in Texas • Safety record continues to improve with a reduction in incidents 50% YOY • Excellent progress with Lean Manuf
Slide 12: Evolving Market Exposure
Evolving Market Exposure YTD 2013 Sales: 70% Commercial (2013E Guidance as of July 31, 2013) 30% Defense 2013E with Acquisitions 30% Defense 18% $2,480 - Oil & Gas 2,520 M 18% Industrial Power Gen 18% 16% Comm Aero Geographic Diversification ● Balanced Market Offering Second Quarter 2013 12
Slide 13: Outlook for 2013 and Closing Comments
Outlook for 2013 and Closing Comments • Increased guidance reflects outlook for strong, double-digit growth in sales, operating income and EPS o Solid growth anticipated in all commercial markets outweighs mixed performance in defense • Continued improvements in profitability due to benefit of prior
Slide 14: Appendix
Appendix 14 Second Quarter 2013
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NON-GAAP FINANCIAL DATA (UNAUDITED) ($ in millions) Three Months Ended June 30, 2013 Flow Control Controls Surface Technologies Corporate & Other Total Curtiss - Wright 2013 2012 Chg 2013 2012 Chg 2013 2012 Chg 2013 2012 Chg 2013 20
Slide 16: 2Q 2013 Segment Review – Flow Control
2Q 2013 Segment Review – Flow Control Naval Defense 24% Oil & Gas 32% Gen Industrial 8% Comm Aero 2% Power Gen 34% Segment Sales: $321 M Note: Percentages in chart relate to Second Quarter 2013 sales. 16 Second Quarter 2013
Slide 17: 2Q 2013 Segment Review – Controls
2Q 2013 Segment Review – Controls Aero Defense 28% Comm Aero 31% Ground Defense 10% Naval Defense 5% Other Defense & Gen Industrial Gov't. 24% 2% Segment Sales: $217M Note: Percentages in chart relate to Second Quarter 2013 sales. 17 Second Quarter 2013
Slide 18: 2Q 2013 Segment Review – Surface Technologies
2Q 2013 Segment Review – Surface Technologies Comm Aero 40% Gen Industrial 33% Power Gen 8% Other Defense & Aero Defense Oil & Gas Gov't. 10% 8% 1% Segment Sales: $80 M Note: Percentages in chart relate to Second Quarter 2013 sales. 18 Second Quarter 2013
Slide 19: 2013E Market Outlook
2013E Market Outlook (as of July 31, 2013) FY2013E FY2013E Management Guidance (Prior) (Current) Aero Defense (9) - (13%) (9) - (13%) Ground Defense (15) - (19%) (15) - (19%) Naval Defense 7 - 11% 7 - 11% Total Defense Flat to Down Flat to Down Including Other Defense 4% 4% Commercial Aero 7 - 11% 1