Slide 1: 3Q 2013 Earnings Conference Call
3Q 2013 Earnings Conference Call October 31, 2013 Transforming for the Future Third 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 Third Quarter 2013 Results
Overview of Third Quarter 2013 Results • Sales increased 25%, driven by double-digit gains across all three segments o Benefited from acquisitions and growth in commercial markets • Operating income increased 169% o Up 40% excluding one-time items in 2012 • Operating margin up 560 bps to 10.5% (orga
Slide 4: Third Quarter 2013 Operating Income Drivers
Third Quarter 2013 Operating Income Drivers 3Q’12 Adjusted % Change Excl. One-Time vs. Adj. 3Q’13 Reported 3Q’12 Reported Items* 3Q’12 Flow Control $24.9 $1.2 $21.6 15% Controls $32.6 $22.8 $23.2 41% Surface $11.7 $8.2 $9.0 30% Technologies Corp & Other ($6.3) ($8.8) ($8.8) 28% Total $62.9M $23.4M $
Slide 5: 3Q 2013 End Markets Summary Commercial
3Q 2013 End Markets Summary YTD 2013 Sales: Commercial 70% Commercial 30% Defense Aero Key Positives Oil & Gas Defense 19% 10% Ground • Ongoing ramp up in commercial aircraft Defense 4% production rates and Emergent Operations facility producing solid organic growth Naval Defense • Solid global afte
Slide 6: 3Q 2013 End Markets Summary Defense
3Q 2013 End Markets Summary YTD 2013 Sales: Defense 70% Commercial 30% Defense Aero Defense Key Positives 10% Ground Oil & Gas Defense • Strong naval defense revenues led by 19% 4% Virginia Class submarines and ramp up on CVN-79 aircraft carrier Naval • Higher revenues on P-8A Poseidon Defense and J
Slide 7: 2013E Financial Outlook
2013E Financial Outlook (as of October 30, 2013) FY2013E Management Guidance (Current) Total Sales $2,480 - 2,520M Flow Control $1,300 - 1,320M Controls $865 - 875M Surface Technologies $315 - 325M Total Operating Income $232 - 240M CW Margin 9.3% - 9.5% Flow Control $116 - 119M Margin 8.9% - 9.0% C
Slide 8: 2013E Financial Outlook
2013E Financial Outlook (as of October 30, 2013) FY2013E FY2013E Management Guidance (Prior) (Current) Pension Expense - $33 - 34M Interest Expense - $39 - 40M Diluted EPS - $2.75 - 2.85 Diluted Shares Outstanding - 47.6M Effective Tax Rate - 32.0% Free Cash Flow (1) $100 - 110M $110 - 120M Deprecia
Slide 9: Acquisition Integration Update
Acquisition Integration Update Parvus Completed Tasks and Status • Established integration teams and plans (30/60/90 day plans) • Outlined initial product line rationalization • Joint sales activities in process • Integration Status: On Plan Future Opportunities • Complete product line rationalizati
Slide 10: 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 facilities in Texas • Safety record continues to improve with a reduction in incidents 50% YOY • Excellent progress with Lean Man
Slide 11: Outlook for 2013 and Closing Comments
Outlook for 2013 and Closing Comments • Maintain guidance based on outlook for strong, double-digit growth in sales, operating income and EPS o Expect to be at high end of range for diluted EPS, despite 4Q’13 acquisitions ($0.03) o Solid growth anticipated in all commercial markets outweighs mixed p
Slide 12: Appendix
Appendix 12 Third Quarter 2013
Slide 13: Non-GAAP Reconciliation
Non-GAAP Reconciliation (1) The term incremental is used to highlight the impact acquisitions had on the current year results, for which there was no comparable prior year data. Therefore, the results of operations for acquisitions are incremental for the first twelve months from the date of acquisi
Slide 14: 3Q 2013 Segment Review – Flow Control
3Q 2013 Segment Review – Flow Control Naval Defense 25% Oil & Gas 34% Gen Industrial 6% Comm Aero 2% Power Gen 33% Segment Sales: $311 M Note: Percentages in chart relate to Third Quarter 2013 sales. 14 Third Quarter 2013
Slide 15: 3Q 2013 Segment Review – Controls
3Q 2013 Segment Review – Controls Aero Defense 26% Comm Aero 31% Ground Defense 11% Naval Defense 5% Other Defense & Gov't. Gen Industrial 1% 26% Segment Sales: $213 M Note: Percentages in chart relate to Third Quarter 2013 sales. 15 Third Quarter 2013
Slide 16: 3Q 2013 Segment Review – Surface Technologies
3Q 2013 Segment Review – Surface Technologies Comm Aero 39% Gen Industrial 35% Power Gen 8% Other Defense & Aero Defense Oil & Gas 9% 8% Gov't. 1% Segment Sales: $77 M Note: Percentages in chart relate to Third Quarter 2013 sales. 16 Third Quarter 2013
Slide 17: 2013E Market Outlook
2013E Market Outlook (Guidance as of October 30, 2013) FY2013E % of Total Management Guidance (Current) Sales Aero Defense (9) - (13%) 11% Ground Defense (15) - (19%) 4% Naval Defense 7 - 11% 15% Total Defense Flat to Down 4% 30% Including Other Defense Commercial Aero 10 - 14% 16% Oil & Gas 70 - 74