Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its first quarter of fiscal year 2022. (All amounts are presented
on an as reported (U.S. GAAP) basis unless otherwise indicated. All
per share amounts are presented on a fully diluted basis. All
comparisons are made to the same period of the prior year unless
otherwise stated.)
First Quarter Overview
- Net sales were $542 million,
compared to $538 million, an increase of 1 percent.
- Net earnings were $30 million, or
$0.47 per share, compared to net earnings of $42 million, or $0.64
per share.
- Adjusted net earnings1 were $36
million, or $0.56 per share.
- Net cash provided by operating
activities was $39 million compared to $147 million. Free cash
flow1 was $26 million compared to $139 million. Adjusted free cash
flow1 was $27 million.
“Although we saw positive signs of recovery in the quarter
across most of our end markets, ongoing industry-wide COVID-19
related disruptions, including supply chain constraints and labor
shortages, adversely impacted our operations and caused some
customer-initiated shipment delays,” said Thomas A. Gendron,
Chairman and Chief Executive Officer. “In Aerospace, passenger
traffic continues to recover, while defense spending remained flat.
Our Industrial segment benefitted from increased demand in marine
transportation and power generation as well as a recovering oil and
gas market, while the China natural gas truck market remains
challenging. Although we expect an uneven market recovery, we are
seeing green shoots throughout the business, and we remain
confident in our ability to deliver on our previously issued fiscal
2022 outlook.”
First Quarter Company
Results
Net sales for the first quarter of fiscal 2022 were $542
million, compared to $538 million for the first quarter of last
year, an increase of 1 percent. Sales for the first quarter were
negatively impacted by approximately $70 million due to ongoing
industry-wide COVID-19 related disruptions.
Net earnings were $30 million, or $0.47 per share, for the first
quarter of 2022, compared to $42 million, or $0.64 per share, in
the first quarter last year. Adjusted net earnings for the first
quarter of 2022 were $36 million, or $0.56 per share. There were no
adjustments made to net earnings in the prior year first
quarter.
EBIT1 was $45 million for the first quarter of 2022, compared to
$56 million for the first quarter of the prior year. Adjusted EBIT1
was $53 million for the first quarter of 2022. There were no
adjustments to EBIT in the first quarter of the prior year.
The effective tax rate was 19.7 percent for the first quarter of
2022, compared to 12.6 percent for the prior year period. The
adjusted effective tax rate1 for the first quarter of 2022 was 20.6
percent. There were no adjustments to the effective tax rate in the
first quarter of the prior year.
Segment Results
Aerospace
Aerospace segment net sales for the first quarter of fiscal 2022
were $336 million, compared to $322 million for the first quarter a
year ago, an increase of 5 percent.
Continued recovery in passenger traffic and increasing aircraft
utilization drove significant growth in commercial OEM and
aftermarket sales compared to the prior year quarter. Defense sales
were down compared to the prior year quarter due to both continued
weakness in guided weapons and lower defense aftermarket sales.
Segment earnings for the first quarter of 2022 were $51 million,
compared to $46 million for the same period of the prior year.
Segment earnings as a percent of segment net sales were 15.2
percent for the first quarter of 2022, compared to 14.4 percent in
the same quarter of the prior year. The increase in segment
earnings was primarily a result of the significantly higher
commercial OEM and aftermarket volume.
Industrial
Industrial segment net sales for the first quarter of fiscal
2022 were $205 million, compared to $216 million for the first
quarter of the prior year, a decrease of 5 percent. Industrial
sales for the first quarter of 2022 declined primarily due to
weakness in China natural gas engines, partially offset by higher
marine sales.
Industrial segment earnings for the first quarter of 2022 were
$24 million, or 11.5 percent of segment net sales, compared to $33
million, or 15.2 percent of segment net sales, for the prior year
quarter. Industrial segment earnings decreased primarily as a
result of lower sales volume, as well as product mix and net
inflationary impacts.
Nonsegment
Nonsegment expenses were $29 million for the first quarter of
fiscal 2022, compared to $23 million for the prior year. Adjusted
nonsegment expenses1 were $21 million for the first quarter of
2022. There were no adjustments to nonsegment expenses in the prior
year period. Adjusted nonsegment expenses for the first quarter of
2022 excludes costs related to business development activities and
a charge associated with a non-recurring matter unrelated to the
ongoing operations of the business.
Cash Flow and Financial
Position
Net cash provided by operating activities for the first quarter
of fiscal year 2022 was $39 million, compared to $147 million for
the prior year. Payments for property, plant, and equipment for the
first quarter of 2022 were $13 million, compared to $7 million for
the first quarter of 2021.
Free cash flow for the first quarter of 2022 was $26 million
compared to $139 million for the prior year. The decrease in free
cash flow was primarily related to working capital increases to
support this year’s anticipated growth. Adjusted free cash flow was
$27 million. There were no adjustments to cash flow in the prior
year first quarter.
During the first quarter of fiscal 2022, $37 million was
returned to stockholders in the form of $10 million of dividends
and $27 million of repurchased shares under a board authorized
share repurchase program.
Total debt was $730 million at December 31, 2021, compared to
$747 million at December 31, 2020. Debt-to-EBITDA1 leverage at
December 31, 2021, was 1.7 times EBITDA, consistent with the prior
year period.
Fiscal Year 2022 Outlook
COVID-19 related disruptions persisted in the quarter, although
improvement is anticipated in the remainder of fiscal year
2022.
Total net sales for fiscal 2022 are expected to be between $2.45
and $2.65 billion. Aerospace and Industrial sales growth
percentages are each expected to be in the low double digits to
mid-teens.
Aerospace segment earnings as a percent of segment net sales are
expected to increase over last fiscal year by approximately 200 to
300 basis points, primarily due to the increased sales volume in
both commercial OEM and aftermarket, partially offset by lower
guided weapon sales and the anticipated return of annual variable
incentive compensation costs. Industrial segment earnings as a
percent of segment net sales are expected to be approximately flat
to up by 150 basis points over last fiscal year, primarily due to
the increased sales volume, partially offset by the anticipated
return of annual variable incentive compensation costs. Growth and
profitability in both segments could be negatively affected if
current COVID-19 and supply chain disruptions do not improve, or if
the pace of inflation puts additional pressure on labor and
material costs.
The adjusted effective tax rate is expected to be approximately
21 percent.
Adjusted free cash flow is expected to be approximately $315
million, generating an adjusted free cash flow conversion rate of
greater than 100 percent. As the anticipated sales growth returns,
we expect higher working capital requirements, primarily driven by
accounts receivable. Also, capital expenditures are expected to
increase over last fiscal year by approximately $30 million.
Adjusted earnings per share is expected to be between $3.55 and
$3.95 based on approximately 66 million of fully diluted weighted
average shares outstanding. The favorable impacts of sales growth
and productivity improvements in both segments are being partially
offset by the expected return of annual variable compensation
costs, inflationary pressures, and a higher tax rate.
Conference Call
Woodward will hold an investor conference call at 4:30 p.m. EST,
January 31, 2022, to provide an overview of the financial
performance for the first quarter of fiscal year 2022, business
highlights, and outlook for the remainder of fiscal 2022. You are
invited to listen to the live webcast of our conference call, or a
recording, and view or download accompanying presentation slides at
our website, www.woodward.com2.
You may also listen to the call by dialing 1-877-231-2582
(domestic) or 1-478-219-0714 (international). Participants should
call prior to the start time to allow for registration; the
Conference ID is 6258645. An audio replay will be available by
telephone from 7:30 p.m. EST on January 31, 2022 until 11:59 p.m.
EST on February 14, 2022. The telephone number to access the replay
is 1-855-859-2056 (domestic) or 1-404-537-3406 (international),
reference access code 6258645.
A webcast presentation will be available on the website by
selecting “Investors/Events & Presentations”. The call and
presentation will remain accessible on the website for 14 days.
About Woodward, Inc.
Woodward is the global leader in the design, manufacturing, and
service of energy conversion and control solutions for the
aerospace and industrial equipment markets. Together with our
customers, we are enabling the path to a cleaner, decarbonized
world. Our innovative fluid, combustion, electrical, propulsion and
motion control systems perform in some of the world’s harshest
environments. Woodward is a global company headquartered in Fort
Collins, Colorado, USA. Visit our website at www.woodward.com.
Cautionary Statement
Information in this press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995 that involve risks and uncertainties, including,
but not limited to, statements regarding our business and financial
outlook for fiscal 2022, including trends in our business,
statements about the continued and expected or potential effects of
the COVID-19 pandemic on our business and the management of our
business, including supply chain constraints and labor shortages,
the continued market volatility and expected uneven recovery in our
markets, the ongoing challenges in the China natural gas truck
market, the continued and expected uncertainty and volatility
around the pace of recovery in our markets, the strength of our
financial position and our ability to maintain our financial
position, the anticipated return of annual variable incentive
compensation, our ability to effectively deliver on our fiscal 2022
outlook, and expectations related to the performance of our
segments and specific markets within those segments, and our future
sales and the anticipated future sales growth, earnings, earnings
per share and adjusted earnings per share, segment earnings as a
percent of segment net sales, cash flows, free cash flows and
adjusted free cash flows, working capital and the anticipated
higher working capital requirements, expected increases in capital
expenditures, and effective tax rate. Readers are cautioned that
these forward-looking statements are only predictions and are
subject to risks, uncertainties, and assumptions that are difficult
to predict. Factors that could cause actual results and the timing
of certain events to differ materially from the forward-looking
statements include, but are not limited to, the COVID-19 pandemic
and related significant volatility in financial, product, service,
commodities (including oil and gas) and other markets and
industries (including the aviation industry); a decline in our
customers’ business, or our business with, or financial distress
of, Woodward’s significant customers; global economic uncertainty
and instability in the financial markets, including inflationary
pressures; Woodward’s ability to manage product liability claims,
product recalls or other liabilities associated with the products
and services that Woodward provides; Woodward’s long sales cycle,
customer evaluation process, and implementation period of some of
its products and services; Woodward’s ability to implement and
realize the intended effects of any restructuring efforts;
Woodward’s ability to successfully manage competitive factors,
including prices, competitor product development, industry
consolidation, and commodity and other input cost increases;
Woodward’s ability to manage expenses and product mix while
responding to sales increases or decreases; the ability of
Woodward’s suppliers to perform contractual obligations and to
provide Woodward with materials of sufficient quality or quantity
required to meet Woodward’s production needs at favorable prices or
at all; Woodward’s ability to monitor its technological expertise
and the success of, and/or costs associated with, its product
development activities; consolidation in the aerospace market and
our participation in a strategic joint venture with General
Electric Company may make it more difficult to secure long-term
sales in certain aerospace markets; Woodward’s debt obligations,
debt service requirements, and ability to operate its business,
pursue its business strategies and incur additional debt in light
of covenants contained in its outstanding debt agreements;
Woodward’s ability to manage additional tax expense and exposures;
risks related to Woodward’s U.S. Government contracting activities,
including liabilities resulting from legal and regulatory
proceedings, inquiries, or investigations related to such
activities; the potential of a significant reduction in defense
sales due to decreases, delays or changes in the amount of U.S.
Federal defense spending or other specific budget cuts impacting
defense programs in which Woodward participates; changes in
government spending patterns, priorities, subsidy programs and/or
regulatory requirements; future impairment charges resulting from
changes in the estimates of fair value of reporting units or of
long-lived assets; environmental liabilities related to
manufacturing activities and/or real estate acquisitions;
Woodward’s continued access to a stable workforce and favorable
labor relations with its employees; physical and other risks
related to Woodward’s operations and suppliers, including natural
disasters and COVID-19 related impacts, which could disrupt
production; Woodward’s ability to successfully manage regulatory,
tax, and legal matters; impacts of tariff regulations; risks from
operating internationally, including the impact on reported
earnings from fluctuations in foreign currency exchange rates, and
compliance with and changes in the legal and regulatory
environments of the United States and the countries in which
Woodward operates; industry risks, including increases in natural
gas prices, unforeseen events that may reduce commercial aviation,
such as diseases, epidemics, pandemics and natural disasters, and
increasing emissions standards; any adverse effects on Woodward’s
operations due to cybersecurity breaches or other information
technology system interruptions or intrusions; and other risk
factors described in Woodward's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the fiscal year ended September 30, 2021, as well as its Quarterly
Report on Form 10-Q for the first quarter ended December 31, 2021,
which we expect to file shortly, and other risks described in
Woodward’s filings with the Securities and Exchange Commission.
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS |
(Unaudited - in thousands except per share
amounts) |
|
|
|
|
|
|
|
Three-Months Ended |
|
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Net sales |
|
$ |
541,586 |
|
|
$ |
537,619 |
|
Costs and expenses: |
|
|
|
|
Cost of goods sold |
|
|
419,151 |
|
|
|
401,640 |
|
Selling, general, and administrative expenses |
|
|
62,306 |
|
|
|
56,111 |
|
Research and development costs |
|
|
25,392 |
|
|
|
31,996 |
|
Interest expense |
|
|
8,306 |
|
|
|
8,906 |
|
Interest income |
|
|
(641 |
) |
|
|
(495 |
) |
Other (income) expense, net |
|
|
(10,674 |
) |
|
|
(8,123 |
) |
Total costs and expenses |
|
|
503,840 |
|
|
|
490,035 |
|
Earnings before income taxes |
|
|
37,746 |
|
|
|
47,584 |
|
Income taxes |
|
|
7,441 |
|
|
|
6,014 |
|
Net earnings |
|
$ |
30,305 |
|
|
$ |
41,570 |
|
|
|
|
|
|
Earnings per share amounts: |
|
|
|
|
Basic earnings per share |
|
$ |
0.48 |
|
|
$ |
0.66 |
|
Diluted earnings per share |
|
$ |
0.47 |
|
|
$ |
0.64 |
|
Weighted average common shares outstanding: |
|
|
|
|
Basic |
|
|
63,094 |
|
|
|
62,812 |
|
Diluted |
|
|
65,099 |
|
|
|
64,892 |
|
|
|
|
|
|
Cash dividends per share paid to Woodward common stockholders |
|
$ |
0.1625 |
|
|
$ |
0.0813 |
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
December 31, |
|
September 30, |
|
|
|
2021 |
|
|
|
2021 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
426,982 |
|
|
$ |
448,462 |
|
Accounts receivable |
|
|
506,216 |
|
|
|
523,051 |
|
Inventories |
|
|
451,834 |
|
|
|
419,971 |
|
Income taxes receivable |
|
|
8,928 |
|
|
|
12,071 |
|
Other current assets |
|
|
52,771 |
|
|
|
61,168 |
|
Total current assets |
|
|
1,446,731 |
|
|
|
1,464,723 |
|
Property, plant, and equipment, net |
|
|
934,403 |
|
|
|
950,569 |
|
Goodwill |
|
|
800,022 |
|
|
|
805,333 |
|
Intangible assets, net |
|
|
538,782 |
|
|
|
559,289 |
|
Deferred income tax assets |
|
|
13,970 |
|
|
|
14,066 |
|
Other assets |
|
|
301,332 |
|
|
|
297,024 |
|
Total assets |
|
$ |
4,035,240 |
|
|
$ |
4,091,004 |
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Current portion of long-term debt |
|
$ |
424 |
|
|
$ |
728 |
|
Accounts payable |
|
|
165,867 |
|
|
|
170,909 |
|
Income taxes payable |
|
|
17,004 |
|
|
|
11,481 |
|
Accrued liabilities |
|
|
146,213 |
|
|
|
183,139 |
|
Total current liabilities |
|
|
329,508 |
|
|
|
366,257 |
|
Long-term debt, less current portion |
|
|
729,826 |
|
|
|
734,122 |
|
Deferred income tax liabilities |
|
|
156,169 |
|
|
|
157,936 |
|
Other liabilities |
|
|
596,305 |
|
|
|
617,908 |
|
Total liabilities |
|
|
1,811,808 |
|
|
|
1,876,223 |
|
Stockholders’ equity |
|
|
2,223,432 |
|
|
|
2,214,781 |
|
Total liabilities and stockholders’ equity |
|
$ |
4,035,240 |
|
|
$ |
4,091,004 |
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
Three-Months Ended |
|
|
December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Net cash provided by operating activities |
|
$ |
39,290 |
|
|
$ |
146,725 |
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
Payments for purchase of property, plant, and equipment |
|
|
(13,123 |
) |
|
|
(7,263 |
) |
Proceeds from sale of assets |
|
|
1 |
|
|
|
48 |
|
Payments for purchases of short-term investments |
|
|
- |
|
|
|
(2,740 |
) |
Proceeds from sales of short-term investments |
|
|
7 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(13,115 |
) |
|
|
(9,955 |
) |
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
Cash dividends paid |
|
|
(10,247 |
) |
|
|
(5,102 |
) |
Proceeds from sales of treasury stock |
|
|
3,198 |
|
|
|
10,855 |
|
Purchase of treasury stock |
|
|
(39,258 |
) |
|
|
- |
|
Borrowings on revolving lines of credit and short-term
borrowings |
|
|
- |
|
|
|
74,400 |
|
Payments on revolving lines of credit and short-term
borrowings |
|
|
- |
|
|
|
(74,400 |
) |
Payments of long-term debt and finance lease obligations |
|
|
(381 |
) |
|
|
(100,395 |
) |
Net cash used in financing activities |
|
|
(46,688 |
) |
|
|
(94,642 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
(967 |
) |
|
|
6,483 |
|
Net change in cash and cash equivalents |
|
|
(21,480 |
) |
|
|
48,611 |
|
Cash and cash equivalents at beginning of year |
|
|
448,462 |
|
|
|
153,270 |
|
Cash and cash equivalents at end of period |
|
$ |
426,982 |
|
|
$ |
201,881 |
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
SEGMENT NET SALES AND EARNINGS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
Three-Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Net sales: |
|
|
|
|
Aerospace |
|
$ |
336,435 |
|
|
$ |
321,667 |
|
Industrial |
|
|
205,151 |
|
|
|
215,952 |
|
Total consolidated net sales |
|
$ |
541,586 |
|
|
$ |
537,619 |
|
Segment earnings*: |
|
|
|
|
Aerospace |
|
$ |
51,083 |
|
|
$ |
46,466 |
|
As a percent of segment net sales |
|
|
15.2 |
% |
|
|
14.4 |
% |
Industrial |
|
|
23,693 |
|
|
|
32,888 |
|
As a percent of segment net sales |
|
|
11.5 |
% |
|
|
15.2 |
% |
Total segment earnings |
|
|
74,776 |
|
|
|
79,354 |
|
Nonsegment expenses |
|
|
(29,365 |
) |
|
|
(23,359 |
) |
EBIT |
|
|
45,411 |
|
|
|
55,995 |
|
Interest expense, net |
|
|
(7,665 |
) |
|
|
(8,411 |
) |
Consolidated earnings before income taxes |
|
$ |
37,746 |
|
|
$ |
47,584 |
|
|
|
|
|
|
*This schedule reconciles segment earnings, which exclude certain
costs, to consolidated earnings before taxes.
|
|
|
|
|
|
Payments for property, plant and equipment |
|
$ |
13,123 |
|
|
$ |
7,263 |
|
Depreciation expense |
|
$ |
21,033 |
|
|
$ |
22,608 |
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF EARNINGS TO ADJUSTED
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended |
|
Three-Months Ended |
|
|
December 31, 2021 |
|
December 31, 2020 |
|
|
Before Income Tax |
|
Net of Income Tax |
|
Per Share, Net of Income Tax |
|
Before Income Tax |
|
Net of Income Tax |
|
Per Share, Net of Income Tax |
Earnings (U.S. GAAP) |
|
$ |
37,746 |
|
$ |
30,305 |
|
|
$ |
0.47 |
|
|
$ |
47,584 |
|
$ |
41,570 |
|
$ |
0.64 |
Non-U.S. GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
|
5,000 |
|
|
3,750 |
|
|
|
0.06 |
|
|
|
- |
|
|
- |
|
|
- |
Business development activities |
|
|
2,982 |
|
|
2,236 |
|
|
|
0.03 |
|
|
|
- |
|
|
- |
|
|
- |
Total non-U.S. GAAP adjustments |
|
|
7,982 |
|
|
5,986 |
|
|
|
0.09 |
|
|
|
- |
|
|
- |
|
|
- |
Adjusted earnings (Non-U.S. GAAP) |
|
$ |
45,728 |
|
$ |
36,291 |
|
|
$ |
0.56 |
|
|
$ |
47,584 |
|
$ |
41,570 |
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NET EARNINGS TO
EBIT1 AND ADJUSTED
EBIT1 |
(Unaudited - in thousands) |
|
|
|
|
|
Three-Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Net earnings (U.S. GAAP) |
|
$ |
30,305 |
|
|
$ |
41,570 |
|
Income taxes |
|
|
7,441 |
|
|
|
6,014 |
|
Interest expense |
|
|
8,306 |
|
|
|
8,906 |
|
Interest income |
|
|
(641 |
) |
|
|
(495 |
) |
EBIT (Non-U.S. GAAP) |
|
|
45,411 |
|
|
|
55,995 |
|
Non-U.S. GAAP adjustments* |
|
|
7,982 |
|
|
|
- |
|
Adjusted EBIT (Non-U.S. GAAP) |
|
$ |
53,393 |
|
|
$ |
55,995 |
|
|
|
|
|
|
*See Reconciliation of Earnings to Adjusted Earnings1 table above
for the list of Non-U.S. GAAP adjustments made in the applicable
periods. |
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NET EARNINGS TO
EBITDA1 AND ADJUSTED
EBITDA1 |
(Unaudited - in thousands) |
|
|
|
|
|
Three-Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Net earnings (U.S. GAAP) |
|
$ |
30,305 |
|
|
$ |
41,570 |
|
Income taxes |
|
|
7,441 |
|
|
|
6,014 |
|
Interest expense |
|
|
8,306 |
|
|
|
8,906 |
|
Interest income |
|
|
(641 |
) |
|
|
(495 |
) |
Amortization of intangible assets |
|
|
9,688 |
|
|
|
10,469 |
|
Depreciation expense |
|
|
21,033 |
|
|
|
22,608 |
|
EBITDA (Non-U.S. GAAP) |
|
|
76,132 |
|
|
|
89,072 |
|
Non-U.S. GAAP adjustments* |
|
|
7,982 |
|
|
|
- |
|
Adjusted EBITDA (Non-U.S. GAAP) |
|
$ |
84,114 |
|
|
$ |
89,072 |
|
|
|
|
|
|
*See Reconciliation of Earnings to Adjusted Earnings1 table above
for the list of Non-U.S. GAAP adjustments made in the applicable
periods. |
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED
NONSEGMENT EXPENSES1 |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
Three-Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Nonsegment expenses (U.S. GAAP) |
|
$ |
29,365 |
|
|
$ |
23,359 |
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
|
(5,000 |
) |
|
|
- |
|
Business development activities |
|
|
(2,982 |
) |
|
|
- |
|
Adjusted nonsegment expenses (Non-U.S. GAAP) |
|
$ |
21,383 |
|
|
$ |
23,359 |
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO
FREE CASH FLOW1 AND ADJUSTED FREE
CASH FLOW1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
Three-Months Ended December 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Net cash provided by operating activities (U.S. GAAP) |
|
$ |
39,290 |
|
|
$ |
146,725 |
|
Payments for property, plant, and equipment |
|
|
(13,123 |
) |
|
|
(7,263 |
) |
Free cash flow (Non-U.S. GAAP) |
|
|
26,167 |
|
|
|
139,462 |
|
Cash paid for business development activities |
|
|
770 |
|
|
|
- |
|
Cash paid for restructuring charges |
|
|
505 |
|
|
|
- |
|
Adjusted free cash flow (Non-U.S. GAAP) |
|
$ |
27,442 |
|
|
$ |
139,462 |
|
|
|
|
|
|
|
|
|
|
1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net
earnings, adjusted earnings per share, adjusted EBIT, adjusted
EBITDA, adjusted effective tax rate, and adjusted nonsegment
expenses exclude, as applicable, (i) costs related to business
development activities and (ii) a charge related to a non-recurring
matter unrelated to the ongoing operations of the business.
Woodward believes that these items are short-term costs or charges
and are otherwise not related to the ongoing operations of the
business. Therefore, Woodward uses them to illustrate more clearly
how the underlying business of Woodward is performing. Adjusted
free cash flow is free cash flow (defined below) plus the cash
payments for costs related to business development activities and
restructuring activities. Management believes these adjustments to
free cash flow better portray Woodward’s operating performance.
Guidance with respect to non-U.S. GAAP measures as provided in this
release excludes, as applicable, costs, charges and payments
related to (i) business development activities, and (ii)
restructuring activities.
EBIT (earnings before interest and taxes), EBITDA (earnings
before interest, taxes, depreciation and amortization), free cash
flow, adjusted free cash flow, adjusted net earnings, adjusted
earnings per share, adjusted EBIT, adjusted EBITDA, adjusted
effective tax rate, and adjusted nonsegment expenses are financial
measures not prepared and presented in accordance with accounting
principles generally accepted in the United States of America (U.S.
GAAP). Management uses EBIT and adjusted EBIT to evaluate
Woodward’s operating performance without the impacts of financing
and tax related considerations. Management uses EBITDA and adjusted
EBITDA in evaluating Woodward’s operating performance, making
business decisions, including developing budgets, managing
expenditures, forecasting future periods, and evaluating capital
structure impacts of various strategic scenarios. Management also
uses free cash flow, which is derived from net cash provided by or
used in operating activities less payments for property, plant, and
equipment, as well as adjusted free cash flow (as described above),
in reviewing the financial performance of Woodward’s various
business segments and evaluating cash generation levels. Securities
analysts, investors, and others frequently use EBIT, EBITDA and
free cash flow in their evaluation of companies, particularly those
with significant property, plant, and equipment, and intangible
assets that are subject to amortization. The use of any of these
non-U.S. GAAP financial measures is not intended to be considered
in isolation of, or as a substitute for, the financial information
prepared and presented in accordance with U.S. GAAP. Because EBIT,
EBITDA, adjusted EBIT, and adjusted EBITDA exclude certain
financial information compared with net earnings, the most
comparable U.S. GAAP financial measure, users of this financial
information should consider the information that is excluded. Free
cash flow does not necessarily represent funds available for
discretionary use and is not necessarily a measure of our ability
to fund our cash needs. Management’s calculations of EBIT, EBITDA,
adjusted net earnings, adjusted earnings per share, adjusted EBIT,
adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment
expenses, free cash flow, and adjusted free cash flow may differ
from similarly titled measures used by other companies, limiting
their usefulness as comparative measures.
2Website, Facebook, Twitter: Woodward has used, and intends to
continue to use, its Investor Relations website, its Facebook page
and its Twitter handle as means of disclosing material non-public
information and for complying with its disclosure obligations under
Regulation FD.
Contact: |
Dan Provaznik Director, Investor
Relations970-498-3849Dan.Provaznik@woodward.com |
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