Slide 1: 3Q 2015 Earnings Conference Call
3Q 2015 Earnings Conference Call October 29, 2015 NYSE: CW 1 | October 29, 2015 | © 2015 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: Third Quarter 2015 Highlights
Third Quarter 2015 Highlights Challenging 3Q performance – Industrial markets influenced by weaker demand, economic conditions – Partially offset by improvements in Defense and Power segments Maintaining full-year EPS guidance of $3.80 - $3.90 Improved execution driving additional margin expan
Slide 4: Overview of Third Quarter 2015 Results
Overview of Third Quarter 2015 Results Diluted EPS of $0.80, reflecting: – One-time pension settlement charge – Shift of AP1000 order out of 3Q – Lower sales impacting profitability Net Sales decreased 6% (Down 4% organic) Operating Income decreased 14% Operating Margin down 120 bps to 12.1%
Slide 5: 3Q 2015 End Market Sales
3Q 2015 End Market Sales 3Q’15 Results: 3Q’15 % of Total Defense Markets +3%; organic +5% Change Sales Commercial Markets (11%); organic (9%) Aero Defense 16% 16% Ground Defense (22%) 4% Key Drivers: Naval Defense 2% 18% Strong demand for embedded computing Total Defense 3% 38% products drivin
Slide 6: 3Q 2015 Operating Income / Margin Drivers
3Q 2015 Operating Income / Margin Drivers ($ in millions) Change 3Q’15 3Q’14 vs. 2014 Commercial/ Industrial $40.3 $51.1 (21%) Margin 13.8% 16.3% (250 bps) Defense 25.5 22.5 13% Margin 21.7% 17.7% +400 bps Power 13.5 11.1 22% Margin 11.7% 9.4% +230 bps Change vs. 2014, excluding one-time Total Segme
Slide 7: 2015E End Market Sales Outlook (Guidance as of October 28, 2015)
2015E End Market Sales Outlook (Guidance as of October 28, 2015) FY2015E FY2015E % of Total (Prior) (Current) Sales Aero Defense 2 - 6% No change 13% Ground Defense 13 - 17% No change 4% Naval Defense (2) - 2% No change 18% Total Defense 2 - 4% No change 35% Including Other Defense Commercial Aero (
Slide 8: 2015E Financial Outlook (Guidance as of October 28, 2015)
2015E Financial Outlook (Guidance as of October 28, 2015) ($ in millions) FY2015E FY2015E Growth % (Prior) (Current) vs 2014 Total Sales $2,250 - 2,300 $2,190 - 2,240 Flat to down 2% Commercial / Industrial $1,235 - 1,255 $1,190 - 1,210 (1 - 3%) Defense $500 - 515 $485 - 500 (1) - 2% Power $515 - 53
Slide 9: 2015E Financial Outlook (Guidance as of October 28, 2015)
2015E Financial Outlook (Guidance as of October 28, 2015) FY2015E FY2015E (Prior) (Current) Interest Expense $36 - 37M $35 - 36M Effective Tax Rate 31.5% - 31.75% ~31% Diluted EPS $3.80 - 3.90 No change Diluted Shares Outstanding 47.8M ~47.6M Free Cash Flow (1) $100 - 120M No change Adjusted Free Ca
Slide 10: Balanced Capital Allocation
Balanced Capital Allocation Committed to steady return of capital to shareholders – $185M in YTD’15 share repurchases Return of – $300M in total share repurchases Capital expected in 2015 Utilize free cash flow for bolt-on acquisitions Operational Acquisitions Requirements Internal investment
Slide 11: AP1000 Update
AP1000 Update Curtiss-Wright AP1000 reactor coolant pump (RCP) reaches Full Qualification Providing first-of-a-kind RCPs on Westinghouse AP1000 power plant Completed all design modifications and extensive customer testing requirements Preparing RCPs for shipment Awaiting contract for new C
Slide 12: Outlook for 2015 and Closing Comments
Outlook for 2015 and Closing Comments Expect strong operating margin expansion (90 - 100 bps) – Led by operational improvement and cost reduction initiatives – Driving towards Upper Quartile operating margin Solid, double-digit growth in diluted EPS Solid free cash flow expectations Dedicate
Slide 13: Appendix
Appendix 13 | October 29, 2015 | © 2015 Curtiss-Wright
Slide 14: 3Q 2015 End Market Sales
3Q 2015 End Market Sales General Industrial 27% Commercial Aero 18% Naval Defense 18% Power Generation 17% Aero & Ground Defense 20% Notes: Percentages in chart relate to Third Quarter 2015 sales. 14 | October 29, 2015 | © 2015 Curtiss-Wright
Slide 15: Non-GAAP Reconciliation
Non-GAAP Reconciliation Organic Revenue and Organic Operating income The Corporation discloses organic revenue and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic revenue and organic operating inco
Slide 16: 2015E End Market Sales Waterfall (Guidance as of October 28, 2015)
2015E End Market Sales Waterfall (Guidance as of October 28, 2015) Total CW End Markets ($ Millions) $2,190 - 2,240 Commercial Markets Defense Markets 65% 35% Power Gen Comm. Aero Gen. Industrial Naval 20% 18% 27% 18% Aftermarket Industrial Valves Aerospace 69% 27% 13% New Build Industrial Vehicles