Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its fiscal year 2023 and fourth quarter ending September 30, 2023.
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 fiscal year unless otherwise stated.
Fourth Quarter Overview
- Net sales were $777 million,
compared to $640 million, an increase of 21 percent.
- Net earnings and adjusted net
earnings1 were $83 million, or $1.33 per share, compared to net
earnings of $54 million, or $0.88 per share, and adjusted net
earnings of $51 million, or $0.84 per share.
Fiscal Year 2023 Overview
- Net sales were $2.91 billion,
compared to $2.38 billion, an increase of 22 percent.
- Net earnings were $232 million, or
$3.78 per share, compared to net earnings of $172 million, or $2.71
per share.
- Adjusted net earnings were $259
million, or $4.21 per share, compared to adjusted net earnings of
$174 million, or $2.75 per share.
- Net cash provided by operating
activities was $309 million, compared to $194 million. Free cash
flow1 was $232 million, compared to $141 million. Adjusted free
cash flow1 was $238 million, compared to $144 million.
“We delivered strong results in fiscal 2023 driven by robust
demand across our aerospace and industrial end markets as well as
improved operational performance. Our Aerospace business continued
to perform well throughout the year. In the second half of the
year, our Industrial business began to realize the benefits from
our strategic investments in operational excellence including
reduced complexity, improved productivity, and increased output.
These sustainable improvements supported double digit revenue
growth and significant margin expansion,” said Chip Blankenship,
Chairman and Chief Executive Officer.
“For fiscal 2024, we anticipate continued strong demand for our
products and services. Combined with benefits from our ongoing
operational excellence focus, we expect to deliver solid revenue
growth, expanded earnings per share, and robust cash flow. Our
pursuit of operational excellence, talent development, and
innovation for the future positions Woodward for long-term
sustainable growth and enhanced value for our shareholders.”
Company Results
Net sales for the fourth quarter of fiscal 2023 were $777
million, compared to $640 million, an increase of 21 percent.
Net earnings for the fourth quarter of 2023 were $83 million, or
$1.33 per share, compared to net earnings of $54 million, or $0.88
per share. Adjusted net earnings for the fourth quarter of 2022
were $51 million, or $0.84 per share.
EBIT1 was $108 million for the fourth quarter of 2023, compared
to $67 million. Adjusted EBIT in the fourth quarter of 2022 was $64
million.
The effective tax rate was 15.7 percent for the fourth quarter
of 2023, compared to 6.5 percent. The adjusted effective tax rate1
for the fourth quarter of 2022 was 5.3 percent.
Net sales for fiscal 2023 were $2.91 billion, compared to $2.38
billion, an increase of 22 percent.
Net earnings for fiscal 2023 were $232 million, or $3.78 per
share, compared to net earnings of $172 million, or $2.71 per
share. Adjusted net earnings for fiscal 2023 were $259 million, or
$4.21 per share, compared to adjusted net earnings of $174 million,
or $2.75 per share.
EBIT was $321 million for fiscal 2023, compared to $233 million.
Adjusted EBIT1 was $356 million for fiscal 2023, compared to $235
million.
The effective tax rate was 15.7 percent for fiscal 2023,
compared to 14.1 percent. The adjusted effective tax rate for
fiscal 2023 was 16.8 percent, compared to 14.3 percent.
Segment Results
Aerospace
Aerospace segment net sales for the fourth quarter of fiscal
2023 were $455 million, compared to $408 million, an increase of 11
percent.
Commercial OEM and aftermarket sales increased significantly
compared to the prior year, driven by higher OEM production rates,
continued growth in passenger traffic, increasing aircraft
utilization, and price realization. Defense sales were down
compared to the prior year due to continued weakness in guided
weapons, partially offset by higher defense aftermarket sales.
Segment earnings for the fourth quarter of 2023 were $78
million, compared to $63 million. Segment earnings as a percent of
segment net sales were 17.2 percent for the fourth quarter of 2023,
compared to 15.5 percent. The increase in segment earnings was
primarily a result of price realization, higher commercial OEM and
aftermarket volume, and productivity gains, partially offset by
inflation and higher annual incentive compensation.
For fiscal 2023, Aerospace segment net sales were $1.77 billion,
compared to $1.52 billion, an increase of 16 percent. Segment
earnings for fiscal 2023 were $290 million, or 16.4 percent of
segment net sales, compared to $231 million, or 15.2 percent of
segment net sales.
Industrial
Industrial segment net sales for the fourth quarter of fiscal
2023 were $322 million, compared to $232 million, an increase of 39
percent. The increase in Industrial segment net sales for the
fourth quarter of 2023 was driven by higher volumes across all
markets and price realization.
Industrial segment earnings for the fourth quarter of 2023 were
$54 million, or 16.9 percent of segment net sales, compared to $21
million, or 9.0 percent of segment net sales. Industrial segment
earnings increased due to higher volume, price realization, and
favorable product mix, partially offset by inflation and higher
annual incentive compensation.
For fiscal 2023, Industrial segment net sales were $1.15
billion, compared to $863 million, an increase of 33 percent.
Segment earnings for fiscal 2023 were $162 million, or 14.1 percent
of segment net sales, compared to $83 million, or 9.6 percent of
segment net sales.
Industrial sales and earnings benefitted from significant
operational improvements including increased output and other
efficiency gains, as well as significantly increased demand for
on-highway natural gas truck production in China in the second half
of fiscal 2023.
Nonsegment
Nonsegment expenses were $24 million for the fourth quarter of
fiscal 2023, compared to $17 million. Adjusted nonsegment expenses1
for the fourth quarter of 2022 were $21 million.
Nonsegment expenses were $131 million for fiscal 2023, compared
to $81 million. Adjusted nonsegment expenses were $96 million for
fiscal 2023, compared to $78 million.
Cash Flow and Financial
Position
Net cash provided by operating activities was $309 million,
compared to $194 million. Payments for property, plant, and
equipment for fiscal 2023 were $77 million, compared to $53
million.
Free cash flow was $232 million for fiscal 2023, compared to
$141 million. Adjusted free cash flow was $238 million for fiscal
2023, compared to $144 million. The increase in free cash flow and
adjusted free cash flow was primarily due to increased earnings,
partially offset by higher capital expenditures.
During fiscal 2023, $177 million was returned to stockholders in
the form of $51 million of dividends and $126 million under our
stock repurchase program.
Total debt was $722 million at September 30, 2023, compared to
$777 million at September 30, 2022. Debt-to-EBITDA1 leverage
at September 30, 2023, was 1.5 times EBITDA, compared to 2.1 times
EBITDA at September 30, 2022.
Fiscal Year 2024 Outlook
Woodward’s fiscal 2024 outlook includes a continued strong
demand environment and improving operational performance throughout
the year.
The Aerospace segment outlook includes increasing revenue and
margin expansion driven by continued strength in commercial markets
and increased defense activity.
The Industrial segment outlook includes broad based market
strength and improving operational performance. Given the
volatility and limited visibility into the China on-highway natural
gas truck market, the outlook assumes peak sales levels in the
first quarter with minimal activity through the remainder of
2024.
Woodward’s fiscal 2024 outlook can be found in the table
below.
Woodward, Inc. and Subsidiaries |
FY24 Guidance |
|
|
|
|
|
Total
Company |
|
Sales |
$3.10 billion - $3.25 billion |
Effective Tax Rate |
~21% |
Free Cash Flow |
$275 million - $325 million |
Capital Expenditures |
~$100 million |
Earnings per Share |
$4.70 - $5.15 |
Diluted Weighted Average
Shares Outstanding |
~62 million |
|
|
Segment
Data |
|
Aerospace |
|
Sales Growth |
10% - 14% |
Segment Earnings (% of
Sales) |
18% - 19% |
Industrial |
|
Sales Growth |
4% - 6% |
Segment Earnings (% of
Sales) |
13% - 14% |
|
|
Conference Call
Woodward will hold an investor conference call at 4:30 p.m. ET,
November 16, 2023, to provide an overview of the financial
performance for the fourth quarter and fiscal year 2023, business
highlights, and outlook for fiscal 2024. 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 1-888-440-4531
(domestic) or 1-646-960-0808 (international). Participants should
call prior to the start time to allow for registration; the
Conference ID is 4278216. An audio replay will be available by
telephone from 7:30 p.m. ET on November 16, 2023 until 11:59 p.m.
ET on November 30, 2023. The telephone number to access the replay
is 1-800-770-2030 (domestic) or 1-647-362-9199 (international),
reference access code 4278216.
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, manufacture, 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 expectations for our
business in fiscal year 2024, including with respect to sustainable
growth, revenue growth, expanded earnings per share, and cash flow,
expectations regarding demand for our products and services,
expectations regarding the impacts of our ongoing focus on
operational excellence, talent development, and innovation,
expectations regarding long-term growth and value for shareholders
, and statements regarding our business and financial outlook for
fiscal year 2024, including our guidance for sales, segment sales
growth, earnings per share, segment earnings margin, effective tax
rate, free cash flow, capital expenditures, and diluted weighted
average shares outstanding, as well as our assumptions regarding
our outlook, anticipated trends in our business, including trends
in commercial aerospace markets, defense activity in our Aerospace
segment, our Industrial markets, operational performance in our
Industrial segment, and the China on-highway natural gas truck
market, including our assumptions regarding sales and demand trends
in fiscal 2024. 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: (1)
global economic uncertainty and instability, including in the
financial markets that affect Woodward, its customers, and its
supply chain; (2) risks related to constraints and disruptions in
the global supply chain and labor markets; (3) Woodward’s long
sales cycle; (4) risks related to Woodward’s concentration of
revenue among a relatively small number of customers; (5)
Woodward’s ability to implement and realize the intended effects of
any restructuring efforts; (6) Woodward’s ability to successfully
manage competitive factors including expenses and fluctuations in
sales; (7) changes and consolidations in the aerospace market; (8)
Woodward’s financial obligations including debt obligations and tax
expenses and exposures; (9) risks related to Woodward’s U.S.
government contracting activities including potential changes in
government spending patterns; (10) Woodward’s ability to protect
its intellectual property rights and avoid infringing the
intellectual property rights of others; (11) changes in the
estimates of fair value of reporting units or of long-lived assets;
(12) environmental risks; (13) Woodward’s continued access to a
stable workforce and favorable labor relations with its employees;
(14) Woodward’s ability to manage various regulatory and legal
matters; (15) risks from operating internationally; (16)
cybersecurity and other technological risks; and other risk factors
and risks 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, 2022, any subsequently filed
Quarterly Report on Form 10-Q, as well as its Annual Report on Form
10-K for the year ended September 30, 2023, which we expect to file
shortly, and other risks described in Woodward’s filings with the
Securities and Exchange Commission. The forward-looking statements
contained in this press release are made as of the date hereof and
Woodward assumes no obligation to update such statements, except as
required by applicable law.
Woodward, Inc. and Subsidiaries |
|
CONSOLIDATED STATEMENTS OF EARNINGS |
|
(Unaudited - in thousands except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Year Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
777,070 |
|
|
$ |
640,033 |
|
|
$ |
2,914,566 |
|
|
$ |
2,382,790 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
587,510 |
|
|
|
504,506 |
|
|
|
2,236,983 |
|
|
|
1,857,485 |
|
Selling, general and administrative expenses |
|
|
65,944 |
|
|
|
50,085 |
|
|
|
269,692 |
|
|
|
203,005 |
|
Research and development costs |
|
|
32,061 |
|
|
|
29,782 |
|
|
|
132,095 |
|
|
|
119,782 |
|
Restructuring charges |
|
|
- |
|
|
|
(3,420 |
) |
|
|
5,172 |
|
|
|
(3,420 |
) |
Interest expense |
|
|
11,736 |
|
|
|
9,509 |
|
|
|
47,898 |
|
|
|
34,545 |
|
Interest income |
|
|
(1,361 |
) |
|
|
(320 |
) |
|
|
(2,751 |
) |
|
|
(1,814 |
) |
Other (income) expense, net |
|
|
(16,860 |
) |
|
|
(7,878 |
) |
|
|
(50,291 |
) |
|
|
(26,691 |
) |
Total costs and expenses |
|
|
679,030 |
|
|
|
582,264 |
|
|
|
2,638,798 |
|
|
|
2,182,892 |
|
Earnings before income
taxes |
|
|
98,040 |
|
|
|
57,769 |
|
|
|
275,768 |
|
|
|
199,898 |
|
Income taxes |
|
|
15,388 |
|
|
|
3,728 |
|
|
|
43,400 |
|
|
|
28,200 |
|
Net
earnings |
|
$ |
82,652 |
|
|
$ |
54,041 |
|
|
$ |
232,368 |
|
|
$ |
171,698 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.38 |
|
|
$ |
0.90 |
|
|
$ |
3.88 |
|
|
$ |
2.79 |
|
Diluted earnings per
share |
|
$ |
1.33 |
|
|
$ |
0.88 |
|
|
$ |
3.78 |
|
|
$ |
2.71 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,103 |
|
|
|
59,929 |
|
|
|
59,908 |
|
|
|
61,517 |
|
Diluted |
|
|
62,039 |
|
|
|
61,234 |
|
|
|
61,482 |
|
|
|
63,254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
share |
|
$ |
0.2200 |
|
|
$ |
0.1900 |
|
|
$ |
0.8500 |
|
|
$ |
0.7325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
September 30, |
|
|
September 30, |
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
137,447 |
|
|
$ |
107,844 |
|
Accounts receivable |
|
749,859 |
|
|
|
609,964 |
|
Inventories |
|
517,843 |
|
|
|
514,287 |
|
Income taxes receivable |
|
14,120 |
|
|
|
5,179 |
|
Other current assets |
|
50,183 |
|
|
|
74,695 |
|
Total current assets |
|
1,469,452 |
|
|
|
1,311,969 |
|
Property, plant, and equipment, net |
|
913,094 |
|
|
|
910,472 |
|
Goodwill |
|
791,468 |
|
|
|
772,559 |
|
Intangible assets, net |
|
452,363 |
|
|
|
460,580 |
|
Deferred income tax assets |
|
58,550 |
|
|
|
23,447 |
|
Other assets |
|
325,276 |
|
|
|
327,419 |
|
Total
assets |
$ |
4,010,203 |
|
|
$ |
3,806,446 |
|
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Short term borrowings |
|
- |
|
|
|
66,800 |
|
Current portion of long term debt |
|
75,817 |
|
|
|
856 |
|
Accounts payable |
|
234,328 |
|
|
|
230,519 |
|
Income taxes payable |
|
44,435 |
|
|
|
34,655 |
|
Accrued liabilities |
|
262,616 |
|
|
|
206,283 |
|
Total current liabilities |
|
617,196 |
|
|
|
539,113 |
|
Long-term debt, less current portion |
|
645,709 |
|
|
|
709,760 |
|
Deferred income tax liabilities |
|
132,819 |
|
|
|
127,195 |
|
Other liabilities |
|
543,490 |
|
|
|
529,256 |
|
Total liabilities |
|
1,939,214 |
|
|
|
1,905,324 |
|
Stockholders’ equity |
|
2,070,989 |
|
|
|
1,901,122 |
|
Total liabilities and
stockholders’ equity |
$ |
4,010,203 |
|
|
$ |
3,806,446 |
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(Unaudited - in thousands) |
|
|
|
For the YearEnded September 30, |
|
|
|
2023 |
|
|
2022 |
|
Net cash provided by operating activities |
|
$ |
308,543 |
|
|
$ |
193,638 |
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
Payments for purchase of
property, plant, and equipment |
|
|
(76,500 |
) |
|
|
(52,868 |
) |
Proceeds from sale of
assets |
|
|
488 |
|
|
|
43 |
|
Payments for business
acquisition, net of cash acquired |
|
|
878 |
|
|
|
(21,549 |
) |
Proceeds from sale of the
renewable power systems business and other related business |
|
|
- |
|
|
|
6,000 |
|
Proceeds from sales of
short-term investments |
|
|
7,692 |
|
|
|
12,557 |
|
Payments for purchases of
short-term investments |
|
|
(6,109 |
) |
|
|
(9,632 |
) |
Net cash used in
investing activities |
|
|
(73,551 |
) |
|
|
(65,449 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Cash dividends paid |
|
|
(51,027 |
) |
|
|
(44,978 |
) |
Proceeds from sales of
treasury stock |
|
|
50,749 |
|
|
|
21,897 |
|
Payments for repurchases of
common stock |
|
|
(126,380 |
) |
|
|
(485,300 |
) |
Borrowings on revolving lines
of credit and short-term borrowings |
|
|
2,323,500 |
|
|
|
952,000 |
|
Payments on revolving lines of
credit and short-term borrowings |
|
|
(2,390,300 |
) |
|
|
(885,200 |
) |
Payments of debt financing
costs |
|
|
(2,236 |
) |
|
|
- |
|
Payments of long-term debt and
finance lease obligations |
|
|
(779 |
) |
|
|
(797 |
) |
Net cash used in
financing activities |
|
|
(196,473 |
) |
|
|
(442,378 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(8,916 |
) |
|
|
(26,429 |
) |
Net change in cash and
cash equivalents |
|
|
29,603 |
|
|
|
(340,618 |
) |
Cash and cash equivalents at
beginning of year |
|
|
107,844 |
|
|
|
448,462 |
|
Cash and cash equivalents at
end of year |
|
$ |
137,447 |
|
|
$ |
107,844 |
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
SEGMENT NET SALES AND EARNINGS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Year Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
454,870 |
|
|
$ |
408,418 |
|
|
$ |
1,768,103 |
|
|
$ |
1,519,322 |
|
Industrial |
|
|
322,200 |
|
|
|
231,615 |
|
|
|
1,146,463 |
|
|
|
863,468 |
|
Total consolidated net
sales |
|
$ |
777,070 |
|
|
$ |
640,033 |
|
|
$ |
2,914,566 |
|
|
$ |
2,382,790 |
|
Segment
earnings*: |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
78,281 |
|
|
$ |
63,475 |
|
|
$ |
290,104 |
|
|
$ |
230,933 |
|
As a percent of segment net
sales |
|
|
17.2 |
% |
|
|
15.5 |
% |
|
|
16.4 |
% |
|
|
15.2 |
% |
Industrial |
|
|
54,451 |
|
|
|
20,759 |
|
|
|
161,622 |
|
|
|
82,788 |
|
As a percent of segment net
sales |
|
|
16.9 |
% |
|
|
9.0 |
% |
|
|
14.1 |
% |
|
|
9.6 |
% |
Total segment
earnings |
|
|
132,732 |
|
|
|
84,234 |
|
|
|
451,726 |
|
|
|
313,721 |
|
Nonsegment expenses |
|
|
(24,317 |
) |
|
|
(17,276 |
) |
|
|
(130,811 |
) |
|
|
(81,092 |
) |
EBIT |
|
|
108,415 |
|
|
|
66,958 |
|
|
|
320,915 |
|
|
|
232,629 |
|
Interest
expense, net |
|
|
(10,375 |
) |
|
|
(9,189 |
) |
|
|
(45,147 |
) |
|
|
(32,731 |
) |
Consolidated earnings
before income taxes |
|
$ |
98,040 |
|
|
$ |
57,769 |
|
|
$ |
275,768 |
|
|
$ |
199,898 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*This schedule
reconciles segment earnings, which exclude certain costs, to
consolidated earnings before taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property,
plant and equipment |
|
$ |
19,358 |
|
|
$ |
15,763 |
|
|
$ |
76,500 |
|
|
$ |
52,868 |
|
Depreciation
expense |
|
$ |
20,942 |
|
|
$ |
20,345 |
|
|
$ |
82,154 |
|
|
$ |
83,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF EARNINGS TO ADJUSTED NET
EARNINGS1 |
|
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2023 |
|
|
Three Months Ended September 30, 2022 |
|
|
|
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 |
|
Net Earnings (U.S. GAAP) |
|
$ |
98,040 |
|
|
$ |
82,652 |
|
|
$ |
1.33 |
|
|
$ |
57,769 |
|
|
$ |
54,041 |
|
|
$ |
0.88 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific charge for excess and obsolete inventory |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Product rationalization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Restructuring charge |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,420 |
) |
|
|
(2,565 |
) |
|
|
(0.04 |
) |
Non-recurring charge related to customer collections |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Certain non-restructuring separation costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development activities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total non-U.S. GAAP
adjustments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,420 |
) |
|
|
(2,565 |
) |
|
|
(0.04 |
) |
Adjusted net earnings
(Non-U.S. GAAP) |
|
$ |
98,040 |
|
|
$ |
82,652 |
|
|
$ |
1.33 |
|
|
$ |
54,349 |
|
|
$ |
51,476 |
|
|
$ |
0.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF EARNINGS TO ADJUSTED NET
EARNINGS1 |
|
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended September 30, 2023 |
|
|
Year Ended September 30, 2022 |
|
|
|
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 |
|
Net Earnings (U.S. GAAP) |
|
$ |
275,768 |
|
|
$ |
232,368 |
|
|
$ |
3.78 |
|
|
$ |
199,898 |
|
|
$ |
171,698 |
|
|
$ |
2.71 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Specific charge for excess and obsolete inventory2 |
|
|
11,995 |
|
|
|
9,016 |
|
|
|
0.15 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Product rationalization3 |
|
|
10,504 |
|
|
|
7,896 |
|
|
|
0.13 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Restructuring charge |
|
|
5,172 |
|
|
|
3,874 |
|
|
|
0.06 |
|
|
|
(3,420 |
) |
|
|
(2,565 |
) |
|
|
(0.04 |
) |
Non-recurring charge related to customer collections4 |
|
|
4,997 |
|
|
|
3,761 |
|
|
|
0.06 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Certain non-restructuring separation costs4 |
|
|
2,208 |
|
|
|
1,661 |
|
|
|
0.03 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Non-recurring matter unrelated to the ongoing operations of the
business4 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
3,272 |
|
|
|
2,454 |
|
|
|
0.04 |
|
Business development activities4 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,982 |
|
|
|
2,236 |
|
|
|
0.04 |
|
Total non-U.S. GAAP
adjustments |
|
|
34,876 |
|
|
|
26,208 |
|
|
|
0.43 |
|
|
|
2,834 |
|
|
|
2,125 |
|
|
|
0.04 |
|
Adjusted net earnings
(Non-U.S. GAAP) |
|
$ |
310,644 |
|
|
$ |
258,576 |
|
|
$ |
4.21 |
|
|
$ |
202,732 |
|
|
$ |
173,823 |
|
|
$ |
2.75 |
|
(2) Presented in the line item "Cost of goods sold" in
Woodward's Consolidated Statements of Earnings.
(3) On a pre-tax basis, $5,822 is presented in the line item
"Cost of goods sold" and $4,682 is presented in the line item "
Selling, general and administrative" expenses in Woodward's
Consolidated Statement of Earnings. On an after-tax basis, $4,374
is presented in the line item "Cost of goods sold" and $3,522 is
presented in the line item " Selling, general and administrative"
expenses in Woodward's Consolidated Statements of Earnings.
(4) Presented in the line item "Selling, general and
administrative" expenses in Woodward's Consolidated Statement of
Earnings.
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO
EBIT1 AND ADJUSTED
EBIT1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Year Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings (U.S. GAAP) |
|
$ |
82,652 |
|
|
$ |
54,041 |
|
|
$ |
232,368 |
|
|
$ |
171,698 |
|
Income taxes |
|
|
15,388 |
|
|
|
3,728 |
|
|
|
43,400 |
|
|
|
28,200 |
|
Interest expense |
|
|
11,736 |
|
|
|
9,509 |
|
|
|
47,898 |
|
|
|
34,545 |
|
Interest income |
|
|
(1,361 |
) |
|
|
(320 |
) |
|
|
(2,751 |
) |
|
|
(1,814 |
) |
EBIT
(Non-U.S. GAAP) |
|
|
108,415 |
|
|
|
66,958 |
|
|
|
320,915 |
|
|
|
232,629 |
|
Non-U.S. GAAP
adjustments* |
|
|
- |
|
|
|
(3,420 |
) |
|
|
34,876 |
|
|
|
2,834 |
|
Adjusted EBIT
(Non-U.S. GAAP) |
|
$ |
108,415 |
|
|
$ |
63,538 |
|
|
$ |
355,791 |
|
|
$ |
235,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See Reconciliation of Net Earnings to Adjusted Net Earnings1
tables 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 September 30, |
|
|
Year Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net earnings (U.S. GAAP) |
|
$ |
82,652 |
|
|
$ |
54,041 |
|
|
$ |
232,368 |
|
|
$ |
171,698 |
|
Income taxes |
|
|
15,388 |
|
|
|
3,728 |
|
|
|
43,400 |
|
|
|
28,200 |
|
Interest expense |
|
|
11,736 |
|
|
|
9,509 |
|
|
|
47,898 |
|
|
|
34,545 |
|
Interest income |
|
|
(1,361 |
) |
|
|
(320 |
) |
|
|
(2,751 |
) |
|
|
(1,814 |
) |
Amortization of intangible
assets |
|
|
9,500 |
|
|
|
9,025 |
|
|
|
37,589 |
|
|
|
37,609 |
|
Depreciation expense |
|
|
20,942 |
|
|
|
20,345 |
|
|
|
82,154 |
|
|
|
83,019 |
|
EBITDA
(Non-U.S. GAAP) |
|
|
138,857 |
|
|
|
96,328 |
|
|
|
440,658 |
|
|
|
353,257 |
|
Non-U.S. GAAP
adjustments* |
|
|
- |
|
|
|
(3,420 |
) |
|
|
34,876 |
|
|
|
2,834 |
|
Adjusted
EBITDA (Non-U.S. GAAP) |
|
$ |
138,857 |
|
|
$ |
92,908 |
|
|
$ |
475,534 |
|
|
$ |
356,091 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See Reconciliation of Net Earnings to Adjusted Net Earnings1
tables 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 September 30, |
|
|
Year Ended September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Nonsegment expenses (U.S. GAAP) |
|
$ |
24,317 |
|
|
$ |
17,276 |
|
|
$ |
130,811 |
|
|
$ |
81,092 |
|
Specific charge for excess and
obsolete inventory |
|
|
- |
|
|
|
- |
|
|
|
(11,995 |
) |
|
|
- |
|
Product rationalization |
|
|
- |
|
|
|
- |
|
|
|
(10,504 |
) |
|
|
- |
|
Restructuring activities |
|
|
- |
|
|
|
3,420 |
|
|
|
(5,172 |
) |
|
|
3,420 |
|
Non-recurring charge related
to customer collections |
|
|
- |
|
|
|
- |
|
|
|
(4,997 |
) |
|
|
- |
|
Certain non-restructuring
separation costs |
|
|
- |
|
|
|
- |
|
|
|
(2,208 |
) |
|
|
- |
|
Non-recurring matter unrelated
to the ongoing operations of the business |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(3,272 |
) |
Business development
activities |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,982 |
) |
Adjusted nonsegment
expenses (Non-U.S. GAAP) |
|
$ |
24,317 |
|
|
$ |
20,696 |
|
|
$ |
95,935 |
|
|
$ |
78,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO
FREE CASH FLOW1 AND ADJUSTED FREE
CASH FLOW1 |
|
(Unaudited - in thousands) |
|
|
|
Year Ended |
|
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
308,543 |
|
|
$ |
193,638 |
|
Payments for property, plant,
and equipment |
|
|
(76,500 |
) |
|
|
(52,868 |
) |
Free cash
flow (Non-U.S. GAAP) |
|
|
232,043 |
|
|
|
140,770 |
|
Cash paid for business
development activities |
|
|
- |
|
|
|
2,982 |
|
Cash paid for restructuring
activities |
|
|
5,207 |
|
|
|
505 |
|
Cash paid for certain
non-restructuring separation costs |
|
|
977 |
|
|
|
- |
|
Adjusted free cash
flow (Non-U.S. GAAP) |
|
$ |
238,227 |
|
|
$ |
144,257 |
|
|
|
|
|
|
|
|
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) a specific charge for excess
and obsolete inventory, (ii) product rationalization, (iii) a
restructuring charge, (iv) a non-recurring charge related to
customer collections, (v) certain non-restructuring separation
costs, (vi) a charge in connection with a non-recurring matter
unrelated to the ongoing operations of the business, and (vii)
costs related to business development activities. The product
rationalization adjustment pertains to a non-recurring write-off of
inventory and assets related to the elimination of certain product
lines. The specific charge for excess and obsolete inventory
pertains to a non-recurring write down of other excess inventory
that are not related to product rationalization. The non-recurring
charge related to customer collections pertains to a discrete
process issue that was identified and corrected. The Company
believes that these excluded items are short‐term in nature, not
directly related to the ongoing operations of the business, and
therefore, the exclusion of them illustrates 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, restructuring
activities, and certain non-restructuring costs. Management
believes these adjustments to free cash flow better portray
Woodward’s operating performance.
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, X: Woodward has used, and intends to
continue to use, its Investor Relations website, its Facebook page
and its X 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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