Delaware
|
13-0612970
|
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
4
Becker Farm Road
|
||
Roseland,
New Jersey
|
07068
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Yes x | No o |
Large accelerated filer x | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Yes o | No x |
|
|||
PART I – FINANCIAL
INFORMATION
|
PAGE
|
||
Item
1.
|
Financial
Statements:
|
||
Condensed
Consolidated Statements of Earnings
|
3
|
||
Condensed
Consolidated Balance Sheets
|
4
|
||
Condensed
Consolidated Statements of Cash Flows
|
5
|
||
Condensed
Consolidated Statements of Stockholders’ Equity
|
6
|
||
Notes
to Condensed Consolidated Financial Statements
|
7-13
|
||
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
14-21
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures about Market Risk
|
22
|
|
Item
4.
|
Controls
and Procedures
|
22
|
|
PART II – OTHER
INFORMATION
|
|||
Item
1.
|
Legal
Proceedings
|
23
|
|
Item
1A.
|
Risk
Factors
|
23
|
|
Item
5.
|
Other
Information
|
23
|
|
Item
6.
|
Exhibits
|
23
|
|
Signatures
|
24
|
CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS
|
||||||||
(UNAUDITED)
|
||||||||
(In
thousands except per share data)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2008
|
2007
|
|||||||
Net
sales
|
$ | 433,379 | $ | 332,609 | ||||
Cost
of sales
|
294,910 | 221,222 | ||||||
Gross
profit
|
138,469 | 111,387 | ||||||
Research
and development costs
|
12,836 | 11,339 | ||||||
Selling
expenses
|
25,340 | 20,272 | ||||||
General
and administrative expenses
|
59,566 | 44,634 | ||||||
Operating
income
|
40,727 | 35,142 | ||||||
Other
income, net
|
474 | 884 | ||||||
Interest
expense
|
(7,583 | ) | (5,500 | ) | ||||
Earnings
before income taxes
|
33,618 | 30,526 | ||||||
Provision
for income taxes
|
11,839 | 11,023 | ||||||
Net
earnings
|
$ | 21,779 | $ | 19,503 | ||||
Basic
earnings per share
|
$ | 0.49 | $ | 0.44 | ||||
Diluted
earnings per share
|
$ | 0.48 | $ | 0.44 | ||||
Dividends
per share
|
$ | 0.08 | $ | 0.06 | ||||
Weighted
average shares outstanding:
|
||||||||
Basic
|
44,584 | 44,150 | ||||||
Diluted
|
45,226 | 44,720 | ||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(UNAUDITED)
|
||||||||
(In
thousands)
|
||||||||
March
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Assets
|
||||||||
Current
Assets:
|
||||||||
Cash
and cash equivalents
|
$ | 64,732 | $ | 66,520 | ||||
Receivables,
net
|
376,517 | 392,918 | ||||||
Inventories,
net
|
268,907 | 241,728 | ||||||
Deferred
tax assets, net
|
28,992 | 30,208 | ||||||
Other
current assets
|
21,346 | 26,807 | ||||||
Total
current assets
|
760,494 | 758,181 | ||||||
Property,
plant, and equipment, net
|
340,198 | 329,657 | ||||||
Prepaid
pension costs
|
68,577 | 73,947 | ||||||
Goodwill
|
573,205 | 570,419 | ||||||
Other
intangible assets, net
|
235,751 | 240,842 | ||||||
Other
assets
|
11,733 | 12,514 | ||||||
Total
Assets
|
$ | 1,989,958 | $ | 1,985,560 | ||||
Liabilities
|
||||||||
Current
Liabilities:
|
||||||||
Short-term
debt
|
$ | 1,036 | $ | 923 | ||||
Accounts
payable
|
119,527 | 137,401 | ||||||
Dividends
payable
|
3,584 | - | ||||||
Accrued
expenses
|
78,958 | 103,207 | ||||||
Income
taxes payable
|
9,880 | 13,260 | ||||||
Deferred
revenue
|
94,867 | 105,421 | ||||||
Other
current liabilities
|
40,807 | 38,403 | ||||||
Total
current liabilities
|
348,659 | 398,615 | ||||||
Long-term
debt
|
547,476 | 510,981 | ||||||
Deferred
tax liabilities, net
|
60,595 | 62,416 | ||||||
Accrued
pension and other postretirement benefit costs
|
40,788 | 39,501 | ||||||
Long-term
portion of environmental reserves
|
20,719 | 20,856 | ||||||
Other
liabilities
|
33,619 | 38,406 | ||||||
Total
Liabilities
|
1,051,856 | 1,070,775 | ||||||
Contingencies
and Commitments (Note 9)
|
||||||||
Stockholders'
Equity
|
||||||||
Common
stock, $1 par value
|
47,798 | 47,715 | ||||||
Additional
paid-in capital
|
83,949 | 79,550 | ||||||
Retained
earnings
|
823,106 | 807,413 | ||||||
Accumulated
other comprehensive income
|
94,421 | 93,327 | ||||||
1,049,274 | 1,028,005 | |||||||
Less: Cost
of treasury stock
|
(111,172 | ) | (113,220 | ) | ||||
Total
Stockholders' Equity
|
938,102 | 914,785 | ||||||
Total
Liabilities and Stockholders' Equity
|
$ | 1,989,958 | $ | 1,985,560 |
Three
Months Ended
March
31,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net earnings
|
$ | 21,779 | $ | 19,503 | ||||
Adjustments to reconcile net
earnings to net cash
used for operating
activities:
|
||||||||
Depreciation and
amortization
|
18,747 | 13,463 | ||||||
Deferred income
taxes
|
(405 | ) | (1,620 | ) | ||||
Share based
compensation
|
2,791 | 2,381 | ||||||
Change in operating assets and
liabilities, net of businesses acquired:
|
||||||||
Decrease (increase) in
receivables
|
10,812 | (3,490 | ) | |||||
Increase in
inventories
|
(24,767 | ) | (13,227 | ) | ||||
Increase (decrease) in progress
payments
|
4,281 | (3,706 | ) | |||||
Decrease in accounts payable and
accrued expenses
|
(41,932 | ) | (19,891 | ) | ||||
(Decrease) increase in deferred
revenue
|
(10,554 | ) | 4,948 | |||||
Decrease in income taxes
payable
|
(3,392 | ) | (1,133 | ) | ||||
Decrease in net pension and
postretirement assets
|
3,047 | 1,128 | ||||||
Decrease (increase) in other
current and long-term assets
|
3,438 | (3,289 | ) | |||||
Decrease in other current and
long-term liabilities
|
(2,397 | ) | (2,765 | ) | ||||
Total adjustments
|
(40,331 | ) | (27,201 | ) | ||||
Net cash used for operating
activities
|
(18,552 | ) | (7,698 | ) | ||||
Cash
flows from investing activities:
|
||||||||
Proceeds from sales and disposals
of equipment
|
292 | 108 | ||||||
Acquisitions of intangible
assets
|
(121 | ) | (234 | ) | ||||
Additions to property, plant, and
equipment
|
(23,544 | ) | (12,069 | ) | ||||
Acquisition of new
businesses
|
(449 | ) | (3,795 | ) | ||||
Net cash used for investing
activities
|
(23,822 | ) | (15,990 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Borrowings on
debt
|
125,500 | – | ||||||
Principal payments on
debt
|
(89,000 | ) | (5,015 | ) | ||||
Proceeds from exercise of stock
options
|
3,715 | 3,817 | ||||||
Excess tax benefits from share
based compensation
|
128 | 691 | ||||||
Net cash provided/(used) by
financing activities
|
40,343 | (507 | ) | |||||
Effect
of exchange-rate changes on cash
|
243 | 258 | ||||||
Net
decrease in cash and cash equivalents
|
(1,788 | ) | (23,937 | ) | ||||
Cash
and cash equivalents at beginning of period
|
66,520 | 124,517 | ||||||
Cash
and cash equivalents at end of period
|
$ | 64,732 | $ | 100,580 | ||||
Common
Stock
|
Additional
Paid
in
Capital
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Income
|
Treasury
Stock
|
||||||||||||||||
December
31, 2006
|
$ | 47,533 | $ | 69,887 | $ | 716,030 | $ | 55,806 | $ | (127,182 | ) | |||||||||
Net
earnings
|
– | – | 104,328 | – | ||||||||||||||||
Pension
and postretirement adjustment, net
|
– | – | – | 11,587 | – | |||||||||||||||
Foreign
currency translation adjustments, net
|
– | – | – | 25,934 | – | |||||||||||||||
Adjustment
for initial application of FIN 48
|
– | – | (505 | ) | – | – | ||||||||||||||
Dividends
declared
|
– | – | (12,440 | ) | – | – | ||||||||||||||
Stock
options exercised, net
|
182 | 2,198 | – | – | 10,515 | |||||||||||||||
Share
based compensation
|
– | 7,816 | – | – | 3,096 | |||||||||||||||
Other
|
– | (351 | ) | – | – | 351 | ||||||||||||||
December
31, 2007
|
47,715 | 79,550 | 807,413 | 93,327 | (113,220 | ) | ||||||||||||||
Net
earnings
|
– | – | 21,779 | – | ||||||||||||||||
Pension
and postretirement adjustment, net
|
– | – | – | 127 | – | |||||||||||||||
Adjustment
for SFAS No. 158 measurement date change
|
– | – | (2,494 | ) | 178 | – | ||||||||||||||
Foreign
currency translation adjustments, net
|
– | – | – | 789 | – | |||||||||||||||
Dividends
declared
|
– | – | (3,592 | ) | – | – | ||||||||||||||
Stock
options exercised, net
|
83 | 3,098 | – | – | 558 | |||||||||||||||
Share
based compensation
|
– | 1,493 | – | – | 1,298 | |||||||||||||||
Other
|
– | (192 | ) | – | – | 192 | ||||||||||||||
March
31, 2008
|
$ | 47,798 | $ | 83,949 | $ | 823,106 | $ | 94,421 | $ | (111,172 | ) |
(In
thousands)
|
||||||||
March
31,
2008
|
December
31, 2007
|
|||||||
Billed
Receivables:
|
||||||||
Trade
and other receivables
|
$ | 270,174 | $ | 288,661 | ||||
Less: Allowance for doubtful
accounts
|
(5,020 | ) | (5,347 | ) | ||||
Net
billed receivables
|
265,154 | 283,314 | ||||||
Unbilled
Receivables:
|
||||||||
Recoverable
costs and estimated earnings not billed
|
132,373 | 123,695 | ||||||
Less: Progress payments
applied
|
(21,010 | ) | (14,091 | ) | ||||
Net
unbilled receivables
|
111,363 | 109,604 | ||||||
Receivables,
net
|
$ | 376,517 | $ | 392,918 |
|
(In
thousands)
|
|||||||
March
31,
2008
|
December
31, 2007
|
|||||||
Raw
material
|
$ | 117,400 | $ | 97,580 | ||||
Work-in-process
|
65,972 | 58,700 | ||||||
Finished
goods and component parts
|
77,271 | 70,637 | ||||||
Inventoried
costs related to U.S. Government and other long-term
contracts
|
52,087 | 62,219 | ||||||
Gross
inventories
|
312,730 | 289,136 | ||||||
Less: Inventory reserves
|
(30,052 | ) | (30,999 | ) | ||||
Progress
payments applied, principally related to long-term
contracts
|
(13,771 | ) | (16,409 | ) | ||||
Inventories,
net
|
$ | 268,907 | $ | 241,728 |
|
(In
thousands)
|
|||||||
2008
|
2007
|
|||||||
Warranty
reserves at January 1,
|
$ | 10,774 | $ | 9,957 | ||||
Provision
for current year sales
|
1,533 | 869 | ||||||
Current
year claims
|
(707 | ) | (613 | ) | ||||
Change
in estimates to pre-existing warranties
|
(780 | ) | (383 | ) | ||||
Foreign
currency translation adjustment
|
97 | 29 | ||||||
Warranty
reserves at March 31,
|
$ | 10,917 | $ | 9,859 |
|
(In
thousands)
Three
Months ended March 31,
|
|||||||
2008
|
2007
|
|||||||
Service
cost
|
$ | 5,744 | $ | 5,175 | ||||
Interest
cost
|
5,332 | 4,699 | ||||||
Expected
return on plan assets
|
(7,558 | ) | (7,051 | ) | ||||
Amortization
of:
|
||||||||
Prior service
cost
|
130 | 113 | ||||||
Unrecognized actuarial
loss
|
149 | 105 | ||||||
Net
periodic benefit cost
|
$ | 3,797 | $ | 3,041 |
|
(In
thousands)
Three
Months ended March 31,
|
|||||||
2008
|
2007
|
|||||||
Service
cost
|
$ | 169 | $ | 132 | ||||
Interest
cost
|
452 | 428 | ||||||
Amortization
of unrecognized actuarial gain
|
(129 | ) | (133 | ) | ||||
Net
periodic postretirement benefit cost
|
$ | 492 | $ | 427 |
(In
thousands)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2008
|
2007
|
|||||||
Basic
weighted average shares outstanding
|
44,584 | 44,150 | ||||||
Dilutive
effect of stock options and deferred stock compensation
|
642 | 570 | ||||||
Diluted
weighted average shares outstanding
|
45,226 | 44,720 |
(In
thousands)
Three Months Ended
March 31, 2008
|
||||||||||||||||||||||||
Flow
Control
|
Motion
Control
|
Metal
Treatment
|
Segment
Totals
|
Corporate
& Other (1)
|
Consolidated
Totals
|
|||||||||||||||||||
Revenue
from external customers
|
$ | 210,962 | $ | 154,832 | $ | 67,585 | $ | 433,379 | $ | – | $ | 433,379 | ||||||||||||
Intersegment
revenues
|
– | 133 | 241 | 374 | (374 | ) | – | |||||||||||||||||
Operating
income
|
14,006 | 13,923 | 13,100 | 41,029 | (302 | ) | 40,727 |
(In
thousands)
Three Months Ended
March 31, 2007
|
||||||||||||||||||||||||
Flow
Control
|
Motion
Control
|
Metal
Treatment
|
Segment
Totals
|
Corporate
& Other (1)
|
Consolidated
Totals
|
|||||||||||||||||||
Revenue
from external customers
|
$ | 137,693 | $ | 131,257 | $ | 63,659 | $ | 332,609 | $ | – | $ | 332,609 | ||||||||||||
Intersegment
revenues
|
– | 553 | 276 | 829 | (829 | ) | – | |||||||||||||||||
Operating
income
|
9,980 | 13,061 | 12,970 | 36,011 | (869 | ) | 35,142 |
(In
thousands)
Identifiable
Assets
|
||||||||||||||||||||||||
Flow
Control
|
Motion
Control
|
Metal
Treatment
|
Segment
Totals
|
Corporate
& Other
|
Consolidated
Totals
|
|||||||||||||||||||
March
31, 2008
|
$ | 856,556 | $ | 817,909 | $ | 242,241 | $ | 1,916,706 | $ | 73,252 | $ | 1,989,958 | ||||||||||||
December
31, 2007
|
867,075 | 800,565 | 234,978 | 1,902,618 | 82,942 | 1,985,560 |
|
(1) Operating expense
for Corporate and Other includes pension expense, environmental
remediation and administrative expenses, legal, and other
expenses.
|
(In
thousands)
|
||||||||
Three
months ended
|
||||||||
March
31,
|
||||||||
2008
|
2007
|
|||||||
Total
segment operating income
|
$ | 41,029 | $ | 36,011 | ||||
Corporate
and administrative
|
(302 | ) | (869 | ) | ||||
Other
income, net
|
474 | 884 | ||||||
Interest
expense
|
(7,583 | ) | (5,500 | ) | ||||
Earnings
before income taxes
|
$ | 33,618 | $ | 30,526 |
(In
thousands)
|
||||||||
Three
Months Ended
|
||||||||
March
31,
|
||||||||
|
2008
|
2007
|
||||||
Net
earnings
|
$ | 21,779 | $ | 19,503 | ||||
Equity
adjustment from foreign currency translations
|
789 | 1,249 | ||||||
Defined
benefit pension and post retirement plans
|
127 | (183 | ) | |||||
Total
comprehensive income
|
$ | 22,695 | $ | 20,569 |
·
|
the
Corporation's successful execution of internal performance plans and
estimates to complete;
|
·
|
performance
issues with key suppliers, subcontractors, and business
partners;
|
·
|
the
ability to negotiate financing arrangements with
lenders;
|
·
|
legal
proceedings;
|
·
|
changes
in the need for additional machinery and equipment and/or in the cost for
the expansion of the Corporation's
operations;
|
·
|
ability
of outside third parties to comply with their
commitments;
|
·
|
product
demand and market acceptance risks;
|
·
|
the
effect of economic conditions;
|
·
|
the
impact of competitive products and pricing; product development,
commercialization, and technological
difficulties;
|
·
|
social
and economic conditions and local regulations in the countries in which
the Corporation conducts its
businesses;
|
·
|
unanticipated
environmental remediation expenses or
claims;
|
·
|
capacity
and supply constraints or
difficulties;
|
·
|
an
inability to perform customer contracts at anticipated cost
levels;
|
·
|
changing
priorities or reductions in the U.S. and Foreign Government defense
budgets;
|
·
|
contract
continuation and future contract
awards;
|
·
|
U.S.
and international military budget constraints and
determinations;
|
·
|
the
other factors discussed under the caption “Risk Factors” in the
Corporation’s 2007 Annual Report on Form 10-K;
and
|
·
|
other
factors that generally affect the business of companies operating in the
Corporation's markets and/or
industries.
|
Three
Months Ended
|
||||||||||||
March
31,
|
||||||||||||
%
|
||||||||||||
2008
|
2007
|
Change
|
||||||||||
Sales:
|
||||||||||||
Flow
Control
|
$ | 210,962 | $ | 137,693 | 53.2 | % | ||||||
Motion
Control
|
154,832 | 131,257 | 18.0 | % | ||||||||
Metal
Treatment
|
67,585 | 63,659 | 6.2 | % | ||||||||
Total
Sales
|
$ | 433,379 | $ | 332,609 | 30.3 | % | ||||||
Operating
Income:
|
||||||||||||
Flow
Control
|
$ | 14,006 | $ | 9,980 | 40.3 | % | ||||||
Motion
Control
|
13,923 | 13,061 | 6.6 | % | ||||||||
Metal
Treatment
|
13,100 | 12,970 | 1.0 | % | ||||||||
Total
Segments
|
41,029 | 36,011 | 13.9 | % | ||||||||
Corporate
& Other
|
(302 | ) | (869 | ) | (65.2 | %) | ||||||
Total
Operating Income
|
$ | 40,727 | $ | 35,142 | 15.9 | % | ||||||
Operating
Margins:
|
||||||||||||
Flow
Control
|
6.6 | % | 7.2 | % | ||||||||
Motion
Control
|
9.0 | % | 10.0 | % | ||||||||
Metal
Treatment
|
19.4 | % | 20.4 | % | ||||||||
Total
Curtiss-Wright
|
9.4 | % | 10.6 | % | ||||||||
|
Exhibit
3.1
|
Amended
and Restated Certificate of Incorporation of the Registrant (incorporated
by reference to the Registrant’s Registration Statement on Form 8-A/A
filed May 24, 2005)
|
|
Exhibit
3.2
|
Amended
and Restated Bylaws of the Registrant (incorporated by reference to the
Registrant’s Registration Statement on Form 8-A/A filed May 24,
2005)
|
|
Exhibit
31.1
|
Certification
of Martin R. Benante, Chairman and CEO, Pursuant to Rules 13a – 14(a) and
15d-14(a) under the Securities Exchange Act of 1934, as amended (filed
herewith)
|
|
Exhibit
31.2
|
Certification
of Glenn E. Tynan, Chief Financial Officer, Pursuant to Rules 13a – 14(a)
and 15d-14(a) under the Securities Exchange Act of 1934, as amended (filed
herewith)
|
|
Exhibit
32
|
Certification
of Martin R. Benante, Chairman and CEO, and Glenn E. Tynan, Chief
Financial Officer, Pursuant to 18 U.S.C. Section 1350 (filed
herewith)
|