Curtiss-wright Corporation · NYSE:CW
Curtiss-wright — Q2 2020 Earnings Presentation
18 slides from Curtiss-wright's earnings presentation, Aug 4, 2020
Slide 1: Q2 2020 Earnings Conference Call
Q2 2020 Earnings Conference CallAugust 4, 2020 NYSE: CW Listen-Only dial-in numbers: (844) 220-4970 (domestic)(262) 558-6349 (international)
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 website from one to twelve months following the initial presentation, but content will not be updated to reflect n
Slide 3: Second Quarter 2020 Business Review and Financial Highlights
Notes: 2020 Adjusted results exclude restructuring costs, a non-cash impairment of capitalized development costs related to a commercial aerospace program, one-time inventory step-up, backlog amortization and transaction costs for current and prior year acquisitions, and one-time transition and IT s
Slide 4: Second Quarter 2020 End Market Sales Growth
Second Quarter 2020 End Market Sales Growth Notes: Percentages in chart relate to Second Quarter 2020 sales compared with the prior year. Amounts may not add due to rounding. Q2’20Change % of Total Sales Aero Defense 5% 20% Ground Defense (24%) 4% Naval Defense 10% 30% Total Defense 5% 54% Commercia
Slide 5: Second Quarter 2020 Adjusted Operating Income / Margin Drivers
Second Quarter 2020 Adjusted Operating Income / Margin Drivers ($ in millions) Q2’20 Adjusted(1) Q2’19 Adjusted(1) Chg vs. Q2’19 Key Drivers Commercial / IndustrialMargin $22.1 10.3% $51.4 17.5% (57%) (720 bps) Lower sales / unfavorable absorption in comm’l marketsPartially offset by benefits of cos
Slide 6: Strong Balance Sheet Provides Stability
Strong Balance Sheet Provides Stability Cash balance: $155MAdjusted Debt(1): $825M$750M private placement; $75M drawn from revolver$100M in notes maturing in 2021Revolver: $500M (Current Capacity $403M)Plus $200M accordion feature Borrowing Capacity: $1.6BCircled $300M Senior Notes in May$150M @ 3.1
Slide 7: 2020E End Market Sales Growth (Guidance as of August 3, 2020)
2020E End Market Sales Growth (Guidance as of August 3, 2020) 2020E(Feb 2020) 2020E(Current) 2020E % Total Sales Key Drivers Aero Defense 4% - 6% No Change 19% Favorable growth on key platforms (esp. F-35) Ground Defense 5% - 7% (5% - 7%) 4% Lower sales on international ground platforms Naval Defens
Slide 8: 2020E Adjusted Sales and Operating Income by Segment
($ in millions) 2020E Adjusted (2)(Feb 2020) 2020E Adjusted (2)(Current) 2020E Change vs 2019 Adjusted (1)(2) 2020 Key Drivers Commercial / Industrial $1,140 - 1,160 $935 - 965 (15% - 18%) Reduced demand in commercial aerospace and general industrial Defense $690 - 700 $675 - 685 8% - 9% Solid growt
Slide 9: 2020E Financial Outlook (Guidance as of August 3, 2020)
2020E Financial Outlook (Guidance as of August 3, 2020) ($ in millions, except EPS) 2020E Adjusted (3)(Feb 2020) 2020E Adjusted (3)(Current) 2020E Change vs 2019 Adjusted (2)(3) 2020 Key Drivers Total Operating Income $428 - 437 $376 - 389 (5% - 8%) Other Income/(Expense) $24 - 25 $23 - 24 Interest
Slide 10: 2020 Summary and Expectations
2020 Summary and Expectations Maintain outlook for solid revenue growth in Defense; Commercial markets expected to gradually improve remainder of yearAcquisitions providing modest boost to top-lineAgile business model helps mitigate impact of reduced profitabilityBenefit of increased and accelerated
Slide 11: Appendix Non-GAAP Financial Results
Appendix Non-GAAP Financial Results The company reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "Adjusted" amounts, which are Non-GAAP financial measures described below. We utilize a
Slide 12: FY2020E Guidance: Sales Waterfall (as of August 3, 2020)
FY2020E Guidance: Sales Waterfall (as of August 3, 2020) Non-Nuclear:Fossil power gen equipment; Surface Technologies services (peening/coatings) Industrial Pumps & Valves:65% O&G, 35% Chem/Petro(All Downstream)75% MRO, 25% Projects90% Valves, 10% Pumps Industrial Vehicles:“Own the Cab” strategy45%
Slide 13: Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted)
Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted)
Slide 14: Non-GAAP Reconciliations – Q2 2020 Results
Non-GAAP Reconciliations – Q2 2020 Results (In millions, except EPS) Q2-2020 Q2-2019 Change Sales $ 550.0 $ 639.0 (14%) Reported operating income (GAAP) $ 55.3 $ 105.7 (48%) Adjustments (1) 23.2 2.0 Adjusted operating income (Non-GAAP) $ 78.5 $ 107.7 (27%) Adjusted operating margin (Non-GAAP) 14.3%
Slide 15: Non-GAAP Reconciliation – Organic Results
Non-GAAP Reconciliation – Organic Results Organic Sales and Organic Operating IncomeThe Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Company’s ongoing business performance. Organic sales and organic ope
Slide 16: Non-GAAP Reconciliation – Adjusted Debt and Adjusted Net Debt
Non-GAAP Reconciliation – Adjusted Debt and Adjusted Net Debt Adjusted Debt and Adjusted Net DebtThe Corporation discloses Adjusted Debt and Adjusted Net Debt as it believes that these measures provide useful information regarding contractual amounts of borrowed capital to be repaid, net of cash ava
Slide 17: Non-GAAP Reconciliation – EBITDA
Non-GAAP Reconciliation – EBITDA EBITDAThe Corporation discloses EBITDA as it believes that this measure is useful in evaluating the Corporation’s operating performance. EBITDA is defined as net earnings before interest, income taxes, depreciation, and amortization for the trailing twelve month peri
Slide 18: Non-GAAP Reconciliation – Leverage Ratios
Non-GAAP Reconciliation – Leverage Ratios