Slide 1: 4Q & FY 2019 Earnings Conference Call
4Q & FY 2019 Earnings Conference Call February 27, 2020 NYSE: CW 1 | February 27, 2020 | © 2020 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 website from one to twelve months following the initial presentation, but content will not be updated to reflect n
Slide 3: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights Net Sales of $656 million, up 1% – Strong growth in defense markets, up 9% (8% organic) – Mainly offset by lower power generation and general industrial revenues Adjusted Operating Income up 12%; Adjusted Operating Margin of 18.8%, up 180 bps – Reflects margin expa
Slide 4: Full-Year 2019 Highlights
Full-Year 2019 Highlights Net Sales of $2.5 billion, up 3% – Strong growth in defense markets, up 12% (9% organic) – Partially offset by lower power generation and general industrial revenues Adjusted Operating Income up 7%; Adjusted Operating Margin of 16.5%, up 70 bps – Solid profitability in
Slide 5: 901D Acquisition
901D Acquisition Completed acquisition of 901D Holdings, LLC (901D) 901D on Dec. 31, 2019 Purchase Price $132M (cash) Benefits of 901D acquisition EBITDA ~10x NTM – Leading designer and manufacturer of MIL-SPEC Naval Shipboard Multiple(1) (surface and submarine) ruggedized enclosure and electron
Slide 6: 2020E End Market Sales Growth (Guidance as of February 26, 2020)
2020E End Market Sales Growth (Guidance as of February 26, 2020) 2020E 2019 2020E % Total Sales Key Drivers Aero Defense 11% 4% - 6% 16% Favorable growth on key platforms (esp. F-35) Ground Defense (4%) 5% - 7% 4% Modernization of U.S. ground platforms Strong DoD support for submarines and air
Slide 7: 2020E Financial Outlook (Guidance as of February 26, 2020)
2020E Financial Outlook (Guidance as of February 26, 2020) (1) (1) 2019 Adjusted 2019 Adjusted ($ in millions) (Old Structure) (New Structure) Commercial / Industrial $1,240 $1,138 Defense $581 $628 Power $669 $724 Total Sales $2,490 $2,490 Commercial / Industrial $196 $180 Margin 15.8% 15.8% Defens
Slide 8: 2020E Financial Outlook (Guidance as of February 26, 2020)
2020E Financial Outlook (Guidance as of February 26, 2020) (1) 2019 Adjusted 2020E Change vs (2) (1)(2) ($ in millions) (New Structure) 2020E Adjusted 2019 Adjusted 2020 Key Drivers Commercial / Industrial $1,138 $1,140 - 1,160 0% - 2% Modest growth in commercial & industrial markets Solid growt
Slide 9: 2020E Financial Outlook (Guidance as of February 26, 2020)
2020E Financial Outlook (Guidance as of February 26, 2020) 2020E Change vs (2) (3) (2)(3) ($ in millions, except EPS) 2019 Adjusted 2020E Adjusted 2019 Adjusted 2020 Key Drivers Total Operating Income $411 $428 - 437 4% - 6% Higher profitability on strong defense revenues Other Income/(Expense) $2
Slide 10: Positioned to Deliver Solid 2020 Results
Positioned to Deliver Solid 2020 Results Strong defense revenues driving overall sales growth of 4% - 6% Continued adjusted operating margin expansion to reach 16.5% - 16.6% – Driven by solid defense revenues and benefit of ongoing margin improvement initiatives – Restructuring actions to drive
Slide 11: Appendix: Non-GAAP Financial Results
Appendix Non-GAAP Financial Results The company reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP"). This press release refers to "Adjusted" amounts, which are Non- GAAP financial measures described below. We utilize
Slide 12: Fourth Quarter 2019 End Market Sales Growth
Fourth Quarter 2019 End Market Sales Growth Key Drivers 4Q’19 % of Total Change Sales Defense Markets: Up 9% overall, 8% organic Aerospace Defense: Higher COTS embedded computing revenues Aero Defense 18% 19% on UAV and helicopter programs; Higher actuation revenues on F-35 Ground Defense (16%) 4%
Slide 13: Full-Year 2019 End Market Sales Growth
Full-Year 2019 End Market Sales Growth Key Drivers FY’19 % of Total Change Sales Defense Markets: Up 12% overall, 9% organic Aerospace Defense: Higher revenues on F-35, UAV and helicopter Aero Defense 11% 16% programs Ground Defense (4%) 4% Ground Defense: Lower revenues on various international
Slide 14: 2019 Sales by Segment vs. End Market: Realignment to New Structure
2019 Sales by Segment vs. End Market: Realignment to New Structure Commercial / Industrial Segment (OLD) Defense Segment (OLD) Power Segment (OLD) Commercial General Naval Aerospace 31% Aerospace Power Generation Industrial Defense 45% Defense 50% Naval 48% 49% Defense 25% Aerospace Defense 10% Nava
Slide 15: FY2019 End Market Sales Waterfall
FY2019 End Market Sales Waterfall Overall UP 3% ($ Millions) Total CW End Markets Defense Markets Up 12% $2,488 Comm’l Markets Down 3% Defense Markets Commercial Markets 43% 57% Naval Commercial Aerospace Power Generation General Industrial 23% 17% 16% 24% Industrial Vehicles: Aerospace Aircraft Equ
Slide 16: FY2020E Guidance: Sales Waterfall (as of February 26, 2020)
FY2020E Guidance: Sales Waterfall (as of February 26, 2020) Guidance: ($ Millions) Total CW End Markets Overall UP 4 - 6% $2,590 - 2,630 Defense Markets UP 8 - 10% Comm’l Markets UP 0 - 2% Defense Markets Commercial Markets 45% 55% Naval Commercial Aerospace Power Generation General Industrial 25% 1
Slide 17: Non-GAAP Reconciliation – Organic Results
Non-GAAP Reconciliation – Organic Results Three Months Ended December 31, 2019 vs. 2018 Commercial/Industrial Defense Power Total Curtiss-Wright Operating Operating Operating Operating Sales income Sales income Sales income Sales income Organic 6% 13% 6% 21% (12)% (10)% 1% 10% Acquisitions 0% 0% 2%
Slide 18: Non-GAAP Reconciliations – 4Q 2019 Results
Non-GAAP Reconciliations – 4Q 2019 Results (In millions, except EPS) 4Q-2019 4Q-2018 Change Sales $ 655.8 $ 648.6 1% Reported operating income (GAAP) $ 120.7 $ 110.0 10% Adjustments (1) 2.5 0.4 - Adjusted operating income (Non-GAAP) $ 123.2 $ 110.4 12% Adjusted operating margin (Non-GAAP) 18.8% 17.0
Slide 19: Non-GAAP Reconciliation – 2019 vs. 2018 (Adjusted)
Non-GAAP Reconciliation – 2019 vs. 2018 (Adjusted) 19 | February 27, 2020 | © 2020 Curtiss-Wright
Slide 20: Non-GAAP Reconciliation – 2020 Segment Reorganization
Non-GAAP Reconciliation – 2020 Segment Reorganization 20 | February 27, 2020 | © 2020 Curtiss-Wright
Slide 21: Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted)
Non-GAAP Reconciliation – 2020 vs. 2019 (Adjusted) 21 | February 27, 2020 | © 2020 Curtiss-Wright