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8-K - FORM 8-K - CURTISS WRIGHT CORPf8k_021511.htm
For 80 Years & Counting
SOARING TO NEW HEIGHTS
4Q 2010 Earnings Conference Call
February 15, 2011
 
 

 
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 new information that may become
available after the original presentation posting. The presentation contains forward-looking statements
including, among other things, management's estimates of future performance, revenue and earnings,
our management's growth objectives and our management's ability to produce consistent operating
improvements. These forward-looking statements are based on expectations as of the time the
statements were made only, and are subject to a number of risks and uncertainties which could cause
us to fail to achieve our then-current financial projections and other expectations. We undertake no
duty to update this information. More information about potential factors that could affect our business
and financial results is included in our filings with the Securities and Exchange Commission, including
our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, including, among other
sections, under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations," which is on file with the SEC and available at the SEC's website
at www.sec.gov.
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Overview of 2010 Results
2
 Solid sales and profitability
 Continued focus on execution and cost control
 Earnings led by solid operating performance across all
 three segments
 Strong financial position and cash flow generation
 heading into 2011
 
 

 
Fourth Quarter 2010 Results
3
Key sales drivers:
 Organic growth of 2%*
 Led by strength in naval defense, power
 generation, general industrial and
 commercial aerospace
 Expected softness in ground defense
 and oil & gas
Key operating income drivers:
 Continued benefits of cost reduction and
 restructuring programs
 Segment organic operating margin 14%*
 Higher corporate legal costs
 FX impact $1M unfavorable
 
 
 
 
 
Fourth Quarter
2010
 
% Change
vs. Prior Yr
Sales:
 
 
 
Flow Control
$              283
 
 3%
Motion Control
                182
 
 3%
Metal Treatment
                  59
 
13%
Total Sales
$              523
 
 4%
 
 
 
 
Operating Income:
 
 
 
Flow Control
$                37
 
 4%
Motion Control
                 26
 
(14%)
Metal Treatment
                   8
 
 73%
Total Segments
$               71
 
 1%
Corporate and Other
               (14)
 
  (11%)
Total Operating Income
$              57
 
 (2)%
*Organic results exclude the impact of FX and acquisitions
 
 

 
Full Year 2010 Results
4
Key sales drivers:
 Organic growth of 3%*
 Led by strength in general industrial,
 naval defense, aerospace defense and
 commercial aerospace
 Expected softness in ground defense
 and oil & gas
Key operating income drivers:
 Cost reduction and restructuring
 programs providing a lift to profitability
 Organic operating income +12%*
 Segment organic operating margin 12%*
 FX impact $10M unfavorable
 
 
 
 
 
Full Year
2010
 
% Change
vs. Prior Yr
Sales:
 
 
 
Flow Control
$          1,025
 
4%
Motion Control
               647
 
4%
Metal Treatment
               221
 
9%
Total Sales
$         1,893
 
5%
 
 
 
 
Operating Income:
 
 
 
Flow Control
$             104
 
13%
Motion Control
                 80
 
(1%)
Metal Treatment
                 26
 
30%
Total Segments
$             211
 
 9%
Corporate and Other
                (31)
 
      (27%)
Total Operating Income
$             180
 
 6%
*Organic results exclude the impact of FX and acquisitions
 
 

 
2010 Results - Additional Metrics
5
 New Orders up 11%
 Backlog up 3%
 Strong Free Cash Flow*
  Full Year 2010: $119 M
 Lower Capital Expenditures
 Stable Balance Sheet
 Pension Update
 
 
 
 
* Defined as cash flow from operations less capital expenditures
 
 

 
2010 Segment Review - Flow Control
6
4Q 2010 Results
 Sales up 3%, organic operating income
 up 5%*
 Led by strong sales in naval defense and
 power generation
 Reduced demand to oil & gas and
 general industrial
Full Year 2010 Results
 Sales up 4%, organic operating income
 up 15%*
 Strong sales in naval defense
 Commercial markets flat despite modest
 growth in power generation
 FX impact $2 million unfavorable on OI
Segment Sales: $1,025 M
*Organic results excludes impact of FX and acquisitions
 
 

 
2010 Segment Review - Motion Control
7
Segment Sales: $647 M
4Q 2010 Results
 Sales up 3%, organic operating income
 down 13%*
 Led by strong sales in commercial aero and
 general industrial
 Reduced demand in aerospace and ground
 defense
Full Year 2010 Results
 Sales up 4%, organic operating income
 up 8%*
 Strong sales in aerospace defense, general
 industrial and commercial aerospace
 Significant reduction in ground defense
 FX impact >$7 million unfavorable on OI
*Organic results excludes impact of FX and acquisitions
 
 

 
2010 Segment Review - Metal Treatment
8
Segment Sales: $221 M
4Q 2010 Results
 Sales up 13%, organic operating income
 up 78%*
 Led by higher demand for shot peening
 and heat treating services
 Strong sales to general industrial and
 modest increase in aerospace defense
Full Year 2010 Results
 Sales up 9%, organic operating income
 up 32%*
 Led by strong sales to general industrial
 with increased demand for comm. aero
 FX impact <$1 million unfavorable on OI
*Organic results excludes impact of FX and acquisitions
 
 

 
2010 End Markets Summary*
9
Key Positives
 Naval defense remained strong
 Continued demand for embedded
 computing, and sensors and controls
 products
 Most Commercial/Industrial markets
 ended strongly
Key Negatives
 Cancellation of F-22 and FCS programs
 Winding down of sales related to CVN-78
 Weaker overall ground defense market
 Lower China AP1000 sales
 Slower recovery in oil & gas industry
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Aerospace Defense
10
4Q 2010 Results
 Strength in helicopters, P-8 Poseidon,
 Global Hawk and other UAV programs
 Overall sales relatively flat due to impact
 of F-22 cancellation
Full Year 2010 Results
 Strong sales of embedded computing
 products on Global Hawk and helicopters
 Lower overall sales on F-22 and F-16
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Ground Defense
11
4Q 2010 Results
 Impacted by lower sales on Bradley and
 cancellation of FCS program
 Slightly higher sales on other platforms
Full Year 2010 Results
 Continued overall weakness in ground
 defense market
 Improved demand for international
 ground defense platforms
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Naval Defense
12
4Q 2010 Results
 Led by strong sales on VA class
 submarine and CVN-79 aircraft carrier
 Reduced sales related to DDG-1000
Full Year 2010 Results
 Continued strength in submarines and
 aircraft carrier sales
 Full production on EMALS aircraft
 launching system
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Commercial Aerospace
13
4Q 2010 Results
 Improved sales due to increased
 production levels at Boeing
 Performed metal treatment services on
 various commercial aircraft
Full Year 2010 Results
 Benefitted from ongoing ramp in
 commercial aircraft production rates
 Experienced strong sales for single-aisle
 aircraft, as well as Boeing 787
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Oil & Gas
14
4Q 2010 Results
 Improved demand for aftermarket sales
 opportunities
 Continued delays in capital spending
 worldwide
Full Year 2010 Results
 Rebound in coker equipment sales in
 second half of 2010
 Prolonged delays in capital spending on
 larger projects
 Received 3Q’10 order for complete coker
 system
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - Power Generation
15
4Q 2010 Results
 Driven by demand for upgrades and
 plant maintenance projects
 Decrease in new nuclear construction
 revenues related to China AP1000
Full Year 2010 Results
 Continued demand for content related to
 plant life extension process and power
 uprates on existing operating reactors
 Uptick in domestic AP1000 sales
 Expected reduction in China AP1000
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2010 Summary - General Industrial
16
4Q 2010 Results
 Improving economy led to higher sales
 volumes
 Surge in demand for metal treatment
 services
 Strong sales to automotive industry
Full Year 2010 Results
 Recovery starting to take hold
 Strong demand from automotive and
 transportation industries
 Modest sales to HVAC industry
2010*
* Percentages in chart relate to full year 2010 sales.
 
 

 
2011E Market Outlook (as of February 14, 2011)
17
Management Guidance
FY2011E
Aero Defense
1 - 3%
Ground Defense
 8 - 10%
Naval Defense
1 - 3%
 Total Defense
 
Including Other Defense
2 - 4%
Commercial Aero
10 - 12%
Oil & Gas
3 - 5%
Power Generation
1 - 2%
General Industrial
 9 - 11%
 Total Commercial
5 - 7%
Total Curtiss-Wright
4 - 5%
 
 

 
2011E Financial Outlook (as of February 14, 2011)
18
Management Guidance
FY2011E
Total Sales
$1,960 - 1,990M
4% - 5%
 Flow Control
$1,050 - 1,060M
2% - 3%
 Motion Control
$670 - 680M
4% - 5%
 Metal Treatment
$240 - 250M
 9% - 13%
Operating Income
$200 - 207M
11% - 15%
Diluted EPS
$2.48 - 2.58
 8% - 12%
Diluted Shares Outstanding
 47.3M
Effective Tax Rate
 33.0%
 
 

 
2011E Financial Outlook (as of February 14, 2011)
19
Management Guidance
FY2011E
Free Cash Flow
 $90 - 100M
Depreciation & Amortization
~$82M
CapEx
~$70M
Pension Expense
~$23M
 
 

 
Outlook for 2011 and Closing Comments
20
 Sales up 4-5% with 8-12% EPS growth
 Continued execution and margin expansion
 Solid performance across all end markets
  Defense business is stable and will start to
 overcome several 2010 headwinds
  Commercial markets rebounding as economy
 continue to improve
 Well positioned for long term organic growth
 
 

 
Appendix
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