Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its second quarter of fiscal year 2024.
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.
Second Quarter Overview
- Net sales were
$835 million, compared to $718 million, an increase of 16
percent.
- Net earnings
were $98 million, or $1.56 per share, compared to net earnings of
$36 million, or $0.58 per share.
- Adjusted net
earnings1 were $101 million, or $1.62 per share, compared to
adjusted net earnings of $62 million, or $1.01 per share.
- Net cash
provided by operating activities was $144 million for the first
half of fiscal 2024, compared to $40 million. Free cash flow1 for
the first half of fiscal 2024 was $88 million, compared to negative
$4 million. Adjusted free cash flow1 was $90 million for the first
half of fiscal 2024, compared to negative $1 million.
"Our focus on operational excellence continues
to enable significant sales growth and margin expansion, thanks to
the efforts of all our members,” stated Chip Blankenship, Chairman
and Chief Executive Officer. “In Aerospace, both original equipment
and aftermarket demonstrated strong growth, and our Industrial
segment benefited from growth of our China on-highway business and
strong demand in power generation.
“Our improving operational performance allows us
to capitalize on robust demand for Woodward products and services
across both aerospace and industrial markets. Based on these
improvements and better visibility, we are raising certain aspects
of our full-year guidance. As we drive profitable growth,
operational excellence, and innovation, we remain well positioned
to deliver long term shareholder value.”
Second Quarter Company
Results
Net sales for the second quarter of fiscal 2024
were $835 million, compared to $718 million, an increase of 16
percent.
Net earnings were $98 million, or $1.56 per
share, for the second quarter of 2024, compared to $36 million, or
$0.58 per share. Adjusted net earnings for the second quarter of
2024 were $101 million, or $1.62 per share, compared to $62
million, or $1.01 per share.
EBIT1 was $131 million for the second quarter of
2024, compared to $53 million. Adjusted EBIT1 was $135 million for
the second quarter of 2024, compared to $87 million.
The effective tax rate was 19.1 percent for the
second quarter of 2024, compared to 11.8 percent. The adjusted
effective tax rate1 for the second quarter of 2024 was 19.3
percent, compared to 17.8 percent.
Segment Results
Aerospace
Aerospace segment net sales for the second
quarter of fiscal 2024 were $498 million, compared to $437 million,
an increase of 14 percent.
Commercial aerospace sales increased
significantly, driven by increased aircraft utilization as a result
of continued growth in passenger traffic, and price realization.
Overall defense sales grew modestly.
Segment earnings for the second quarter of 2024
were $98 million, compared to $73 million. Segment earnings as a
percent of segment net sales were 19.8 percent for the second
quarter of 2024, compared to 16.8 percent. The increase in segment
earnings was primarily a result of higher volume and net price
realization.
Industrial
Industrial segment net sales for the second
quarter of fiscal 2024 were $338 million, compared to $281 million,
an increase of 20 percent. The increase in Industrial segment net
sales was driven primarily by growth in transportation,
particularly in the on-highway natural gas truck business in China,
as well as strong sales in power generation and price realization,
partially offset by decreased oil and gas sales.
Industrial segment earnings for the second
quarter of 2024 were $65 million, or 19.3 percent of segment net
sales, compared to $38 million, or 13.4 percent of segment net
sales. The increase in Industrial earnings was a result of higher
volume, largely due to the heightened demand for our China
on-highway business, net price realization, and operational
improvements including increased output and efficiency gains.
Nonsegment
Nonsegment expenses were $33 million for the
second quarter of fiscal 2024, compared to $58 million. Adjusted
nonsegment expenses1 were $29 million for the second quarter of
2024, compared to $23 million.
Year-to-Date Results
Net sales for the first half of 2024 were $1.62
billion, compared to $1.34 billion. Net earnings for the first half
of 2024 were $188 million, or $3.02 per share, compared to $65
million, or $1.07 per share. Adjusted net earnings for the first
half of 2024 were $191 million, or $3.07 per share, compared to $91
million, or $1.50 per share.
The effective tax rate was 18.6 percent for the
first half of 2024, compared to 9.5 percent. The adjusted effective
tax rate for the first half of 2024 was 18.6 percent, compared to
14.5 percent.
Aerospace segment net sales for the first half
of 2024 were $958 million, compared to $833 million. Aerospace
segment earnings for the first half of 2024 were $177 million, or
18.5 percent of segment net sales, compared to $129 million, or
15.5 percent of segment net sales.
Industrial segment net sales for the first half
of 2024 were $664 million, compared to $504 million. Industrial
segment earnings for the first half of 2024 were $132 million, or
19.9 percent of segment net sales, compared to $49 million, or 9.7
percent of segment net sales.
Nonsegment expenses were $59 million for the
first half of 2024, compared to $83 million. Adjusted nonsegment
expenses for the first half of 2024 were $55 million, compared to
$48 million.
Cash Flow and Financial
Position
Net cash provided by operating activities was
$144 million for the first half of 2024, compared to $40 million.
Payments for property, plant, and equipment were $56 million for
the first half of 2024, compared to $44 million.
Free cash flow was $88 million for the first
half of fiscal 2024, compared to negative $4 million. Adjusted free
cash flow was $90 million for the first half of fiscal 2024,
compared to negative $1 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 the first half of fiscal 2024, $28
million was returned to stockholders in the form of dividends.
Total debt was $791 million at March 31, 2024,
compared to $859 million at March 31, 2023. Debt-to-EBITDA1
leverage at March 31, 2024, was 1.2 times EBITDA, compared to 2.2
times EBITDA at March 31, 2023.
Fiscal Year 2024 Guidance
Based on visibility into the third quarter
demand for the China on-highway natural gas truck business and
anticipated improved operational performance in the second half of
fiscal 2024, we are raising certain aspects of our full-year
guidance.
Woodward, Inc. and Subsidiaries |
Revised Guidance |
(In millions, except per share amount and
percentages) |
|
|
Prior |
|
Revised |
|
|
FY24 Guidance issued on |
|
FY24 Guidance issued on |
|
|
January 29, 2024 |
|
April 29, 2024 |
Total
Company |
|
|
|
|
Sales |
|
$3,150 - $3,300 |
|
$3,250 - $3,350 |
Adjusted Effective Tax
Rate |
|
~21% |
|
~20% |
Adjusted Free Cash Flow |
|
$300 - $350 |
|
$325 - $375 |
Capital Expenditures |
|
~100 |
|
No change |
Shares |
|
~62 |
|
No change |
Adjusted EPS |
|
$5.00 - $5.40 |
|
$5.70 - $6.00 |
|
|
|
|
|
Segment
Data |
|
|
|
|
Aerospace |
|
|
|
|
Sales Growth |
|
Up 10% to 14% |
|
Up 12% to 14% |
Segment Earnings (% of
Sales) |
|
18% to 19% |
|
No change |
Industrial |
|
|
|
|
Sales Growth |
|
Up 8% to 10% |
|
Up 13% to 15% |
Segment Earnings (% of
Sales) |
|
14% - 15% |
|
17% - 18% |
Conference Call
Woodward will hold an investor conference call
at 4:30 p.m. ET, April 29, 2024, to provide an overview of the
financial performance for the second quarter of fiscal year 2024,
business highlights, and outlook for the remainder of 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
1-800-715-9871 (U.S. domestic) or 1-646-307-1963 (international).
Participants should call prior to the start time to allow for
registration; the Conference ID is 2819144. An audio replay will be
available by telephone from 7:30 p.m. ET on April 29, 2024 until
11:59 p.m. ET on May 13, 2024. The telephone number to access the
replay is 1-800-770-2030 (U.S. domestic) or 1-609-800-9909
(international), reference access code 2819144.
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 This press
release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve
risks and uncertainties. These forward-looking statements include,
but are not limited to, our prioritization of growth, operational
excellence and innovation, including to the outcome of such efforts
on our long-term success and shareholder value; demand for our
products and services and our ability to capitalize on such demand,
trends in our markets and statements regarding our business and
financial guidance for the remainder of fiscal year 2024, including
our guidance for sales, adjusted earnings, adjusted earnings per
share, segment sales growth, segment earnings as a percent of
sales, adjusted effective tax rate, adjusted free cash flow,
capital expenditures, and diluted weighted shares outstanding, as
well as our assumptions and expectations regarding our guidance.
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)
volatility with respect to the China on-highway natural gas truck
market; (11) Woodward’s ability to protect its intellectual
property rights and avoid infringing the intellectual property
rights of others; (12) changes in the estimates of fair value of
reporting units or of long-lived assets; (13) environmental risks;
(14) Woodward’s continued access to a stable workforce and
favorable labor relations with its employees; (15) Woodward’s
ability to manage various regulatory and legal matters; (16) risks
from operating internationally; (17) 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, 2023, any subsequently filed Quarterly Report on Form
10-Q, as well as its Quarterly Report on Form 10-Q for the second
quarter ended March 31, 2024, 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 March 31, |
|
Six Months Ended March 31, |
|
|
2024 |
|
|
2023 |
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
835,343 |
|
|
$ |
718,214 |
|
$ |
1,622,073 |
|
|
$ |
1,336,833 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
600,954 |
|
|
|
559,149 |
|
|
1,183,335 |
|
|
|
1,051,812 |
|
Selling, general, and
administrative expenses |
|
|
81,447 |
|
|
|
75,578 |
|
|
155,958 |
|
|
|
138,765 |
|
Research and development
costs |
|
|
36,465 |
|
|
|
37,777 |
|
|
67,259 |
|
|
|
66,411 |
|
Restructuring charges |
|
|
- |
|
|
|
5,172 |
|
|
- |
|
|
|
5,172 |
|
Interest expense |
|
|
11,530 |
|
|
|
12,845 |
|
|
22,966 |
|
|
|
23,987 |
|
Interest income |
|
|
(1,293 |
) |
|
|
(508 |
) |
|
(2,766 |
) |
|
|
(874 |
) |
Other (income) expense,
net |
|
|
(14,384 |
) |
|
|
(12,040 |
) |
|
(35,023 |
) |
|
|
(20,430 |
) |
Total costs and expenses |
|
|
714,719 |
|
|
|
677,973 |
|
|
1,391,729 |
|
|
|
1,264,843 |
|
Earnings before income
taxes |
|
|
120,624 |
|
|
|
40,241 |
|
|
230,344 |
|
|
|
71,990 |
|
Income taxes |
|
|
23,068 |
|
|
|
4,730 |
|
|
42,744 |
|
|
|
6,873 |
|
Net
earnings |
|
$ |
97,556 |
|
|
$ |
35,511 |
|
$ |
187,600 |
|
|
$ |
65,117 |
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
amounts: |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
1.61 |
|
|
$ |
0.59 |
|
$ |
3.12 |
|
|
$ |
1.09 |
|
Diluted earnings per
share |
|
$ |
1.56 |
|
|
$ |
0.58 |
|
$ |
3.02 |
|
|
$ |
1.07 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
60,427 |
|
|
|
59,807 |
|
|
60,223 |
|
|
|
59,736 |
|
Diluted |
|
|
62,365 |
|
|
|
61,227 |
|
|
62,106 |
|
|
|
61,083 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends paid per
share |
|
$ |
0.25 |
|
|
$ |
0.22 |
|
$ |
0.47 |
|
|
$ |
0.41 |
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
September 30, |
|
|
2024 |
|
|
|
2023 |
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
316,932 |
|
|
|
$ |
137,447 |
|
Accounts receivable |
|
|
831,777 |
|
|
|
|
749,859 |
|
Inventories |
|
|
580,377 |
|
|
|
|
517,843 |
|
Income taxes receivable |
|
|
32,816 |
|
|
|
|
14,120 |
|
Other current assets |
|
|
50,072 |
|
|
|
|
50,183 |
|
Total current assets |
|
|
1,811,974 |
|
|
|
|
1,469,452 |
|
Property, plant, and
equipment, net |
|
|
921,355 |
|
|
|
|
913,094 |
|
Goodwill |
|
|
796,706 |
|
|
|
|
791,468 |
|
Intangible assets, net |
|
|
443,414 |
|
|
|
|
452,363 |
|
Deferred income tax
assets |
|
|
58,911 |
|
|
|
|
58,550 |
|
Other assets |
|
|
333,899 |
|
|
|
|
325,276 |
|
Total
assets |
|
$ |
4,366,259 |
|
|
|
$ |
4,010,203 |
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Short-term debt |
|
$ |
141,300 |
|
|
|
$ |
- |
|
Current portion of long-term debt |
|
|
699 |
|
|
|
|
75,817 |
|
Accounts payable |
|
|
258,670 |
|
|
|
|
234,328 |
|
Income taxes payable |
|
|
54,242 |
|
|
|
|
44,435 |
|
Accrued liabilities |
|
|
236,944 |
|
|
|
|
262,616 |
|
Total current liabilities |
|
|
691,855 |
|
|
|
|
617,196 |
|
Long-term debt, less current
portion |
|
|
649,039 |
|
|
|
|
645,709 |
|
Deferred income tax
liabilities |
|
|
135,022 |
|
|
|
|
132,819 |
|
Other liabilities |
|
|
560,930 |
|
|
|
|
543,490 |
|
Total liabilities |
|
|
2,036,846 |
|
|
|
|
1,939,214 |
|
Stockholders’ equity |
|
|
2,329,413 |
|
|
|
|
2,070,989 |
|
Total liabilities and
stockholders’ equity |
|
$ |
4,366,259 |
|
|
|
$ |
4,010,203 |
|
Woodward, Inc. and Subsidiaries |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
Net cash provided by operating activities |
|
$ |
144,118 |
|
|
$ |
40,150 |
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
Payments for purchase of
property, plant, and equipment |
|
|
(56,301 |
) |
|
|
(44,046 |
) |
Proceeds from sale of
assets |
|
|
51 |
|
|
|
199 |
|
Proceeds from business
divestiture |
|
|
600 |
|
|
|
- |
|
Payments for business
acquisition, net of cash acquired |
|
|
- |
|
|
|
878 |
|
Payments for short-term
investments |
|
|
(3,723 |
) |
|
|
- |
|
Proceeds from sales of
short-term investments |
|
|
9,732 |
|
|
|
7,733 |
|
Net cash used in
investing activities |
|
|
(49,641 |
) |
|
|
(35,236 |
) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Cash dividends paid |
|
|
(28,327 |
) |
|
|
(24,537 |
) |
Proceeds from sales of
treasury stock |
|
|
43,087 |
|
|
|
14,067 |
|
Payments for repurchases of
common stock |
|
|
- |
|
|
|
(26,369 |
) |
Borrowings on revolving lines
of credit and short-term borrowings |
|
|
1,539,100 |
|
|
|
1,031,800 |
|
Payments on revolving lines of
credit and short-term borrowings |
|
|
(1,397,800 |
) |
|
|
(968,100 |
) |
Payments of debt financing
costs |
|
|
- |
|
|
|
(2,236 |
) |
Payments of long-term debt and
finance lease obligations |
|
|
(75,472 |
) |
|
|
(288 |
) |
Net cash provided by
financing activities |
|
|
80,588 |
|
|
|
24,337 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
4,420 |
|
|
|
(7,668 |
) |
Net change in cash and
cash equivalents |
|
|
179,485 |
|
|
|
21,583 |
|
Cash and cash equivalents at
beginning of year |
|
|
137,447 |
|
|
|
107,844 |
|
Cash and cash equivalents at
end of period |
|
$ |
316,932 |
|
|
$ |
129,427 |
|
Woodward, Inc. and Subsidiaries |
|
SEGMENT NET SALES AND NET EARNINGS |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
497,512 |
|
|
$ |
437,017 |
|
|
$ |
958,268 |
|
|
$ |
832,702 |
|
Industrial |
|
|
337,831 |
|
|
|
281,197 |
|
|
|
663,805 |
|
|
|
504,131 |
|
Total consolidated net
sales |
|
$ |
835,343 |
|
|
$ |
718,214 |
|
|
$ |
1,622,073 |
|
|
$ |
1,336,833 |
|
Segment
earnings*: |
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
|
$ |
98,451 |
|
|
$ |
73,314 |
|
|
$ |
177,453 |
|
|
$ |
128,748 |
|
As a percent of segment net
sales |
|
|
19.8 |
% |
|
|
16.8 |
% |
|
|
18.5 |
% |
|
|
15.5 |
% |
Industrial |
|
|
65,244 |
|
|
|
37,571 |
|
|
|
132,125 |
|
|
|
48,973 |
|
As a percent of segment net
sales |
|
|
19.3 |
% |
|
|
13.4 |
% |
|
|
19.9 |
% |
|
|
9.7 |
% |
Total segment
earnings |
|
|
163,695 |
|
|
|
110,885 |
|
|
|
309,578 |
|
|
|
177,721 |
|
Nonsegment expenses |
|
|
(32,834 |
) |
|
|
(58,307 |
) |
|
|
(59,034 |
) |
|
|
(82,618 |
) |
EBIT |
|
|
130,861 |
|
|
|
52,578 |
|
|
|
250,544 |
|
|
|
95,103 |
|
Interest expense, net |
|
|
(10,237 |
) |
|
|
(12,337 |
) |
|
|
(20,200 |
) |
|
|
(23,113 |
) |
Consolidated earnings
before income taxes |
|
$ |
120,624 |
|
|
$ |
40,241 |
|
|
$ |
230,344 |
|
|
$ |
71,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*This schedule
reconciles segment earnings, which exclude certain costs, to
consolidated earnings before taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property,
plant and equipment |
|
$ |
14,489 |
|
|
$ |
19,656 |
|
|
$ |
56,301 |
|
|
$ |
44,046 |
|
Depreciation
expense |
|
$ |
20,607 |
|
|
$ |
20,535 |
|
|
$ |
40,833 |
|
|
$ |
40,661 |
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET
EARNINGS1 |
|
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2024 |
|
|
Three Months Ended March 31, 2023 |
|
|
|
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) |
|
$ |
120,624 |
|
|
$ |
97,556 |
|
|
$ |
1.56 |
|
|
$ |
40,241 |
|
|
$ |
35,511 |
|
|
$ |
0.58 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring gain related to
a previous acquisition |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development
activities |
|
|
1,664 |
|
|
|
1,256 |
|
|
|
0.02 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Certain non-restructuring
separation costs |
|
|
2,666 |
|
|
|
2,013 |
|
|
|
0.04 |
|
|
|
2,208 |
|
|
|
1,661 |
|
|
|
0.03 |
|
Specific charge for excess and
obsolete inventory |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,995 |
|
|
|
9,016 |
|
|
|
0.15 |
|
Product rationalization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,504 |
|
|
|
7,896 |
|
|
|
0.13 |
|
Restructuring charges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,172 |
|
|
|
3,874 |
|
|
|
0.06 |
|
Non-recurring charge related
to customer collections |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,997 |
|
|
|
3,761 |
|
|
|
0.06 |
|
Total non-U.S. GAAP
adjustments |
|
|
4,330 |
|
|
|
3,269 |
|
|
|
0.06 |
|
|
|
34,876 |
|
|
|
26,208 |
|
|
|
0.43 |
|
Adjusted net earnings
(Non-U.S. GAAP) |
|
$ |
124,954 |
|
|
$ |
100,825 |
|
|
$ |
1.62 |
|
|
$ |
75,117 |
|
|
$ |
61,719 |
|
|
$ |
1.01 |
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO ADJUSTED NET
EARNINGS1 |
|
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended March 31, 2024 |
|
|
Six Months Ended March 31, 2023 |
|
|
|
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) |
|
$ |
230,344 |
|
|
$ |
187,600 |
|
|
$ |
3.02 |
|
|
$ |
71,990 |
|
|
$ |
65,117 |
|
|
$ |
1.07 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring gain related to
a previous acquisition |
|
|
(4,803 |
) |
|
|
(3,433 |
) |
|
|
(0.06 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development
activities |
|
|
5,902 |
|
|
|
4,456 |
|
|
|
0.07 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Certain non-restructuring
separation costs |
|
|
2,666 |
|
|
|
2,013 |
|
|
|
0.04 |
|
|
|
2,208 |
|
|
|
1,661 |
|
|
|
0.03 |
|
Specific charge for excess and
obsolete inventory |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
11,995 |
|
|
|
9,016 |
|
|
|
0.15 |
|
Product rationalization |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
10,504 |
|
|
|
7,896 |
|
|
|
0.13 |
|
Restructuring charges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5,172 |
|
|
|
3,874 |
|
|
|
0.06 |
|
Non-recurring charge related
to customer collections |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
4,997 |
|
|
|
3,761 |
|
|
|
0.06 |
|
Total non-U.S. GAAP
adjustments |
|
|
3,765 |
|
|
|
3,036 |
|
|
|
0.05 |
|
|
|
34,876 |
|
|
|
26,208 |
|
|
|
0.43 |
|
Adjusted net earnings
(Non-U.S. GAAP) |
|
$ |
234,109 |
|
|
$ |
190,636 |
|
|
$ |
3.07 |
|
|
$ |
106,866 |
|
|
$ |
91,325 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
|
RECONCILIATION OF NET EARNINGS TO
EBIT1 AND ADJUSTED
EBIT1 |
|
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net earnings (U.S. GAAP) |
|
$ |
97,556 |
|
|
$ |
35,511 |
|
|
$ |
187,600 |
|
|
$ |
65,117 |
|
Income tax expense |
|
|
23,068 |
|
|
|
4,730 |
|
|
|
42,744 |
|
|
|
6,873 |
|
Interest expense |
|
|
11,530 |
|
|
|
12,845 |
|
|
|
22,966 |
|
|
|
23,987 |
|
Interest income |
|
|
(1,293 |
) |
|
|
(508 |
) |
|
|
(2,766 |
) |
|
|
(874 |
) |
EBIT (Non-U.S.
GAAP) |
|
|
130,861 |
|
|
|
52,578 |
|
|
|
250,544 |
|
|
|
95,103 |
|
Total non-U.S. GAAP
adjustments* |
|
|
4,330 |
|
|
|
34,876 |
|
|
|
3,765 |
|
|
|
34,876 |
|
Adjusted EBIT
(Non-U.S. GAAP) |
|
$ |
135,191 |
|
|
$ |
87,454 |
|
|
$ |
254,309 |
|
|
$ |
129,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See Reconciliation
of Net Earnings to Adjusted Net 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 March 31, |
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net earnings (U.S. GAAP) |
|
$ |
97,556 |
|
|
$ |
35,511 |
|
|
$ |
187,600 |
|
|
$ |
65,117 |
|
Income tax expense |
|
|
23,068 |
|
|
|
4,730 |
|
|
|
42,744 |
|
|
|
6,873 |
|
Interest expense |
|
|
11,530 |
|
|
|
12,845 |
|
|
|
22,966 |
|
|
|
23,987 |
|
Interest income |
|
|
(1,293 |
) |
|
|
(508 |
) |
|
|
(2,766 |
) |
|
|
(874 |
) |
Amortization of intangible
assets |
|
|
8,618 |
|
|
|
9,418 |
|
|
|
17,217 |
|
|
|
18,596 |
|
Depreciation expense |
|
|
20,607 |
|
|
|
20,535 |
|
|
|
40,833 |
|
|
|
40,661 |
|
EBITDA (Non-U.S.
GAAP) |
|
|
160,086 |
|
|
|
82,531 |
|
|
|
308,594 |
|
|
|
154,360 |
|
Total non-U.S. GAAP
adjustments* |
|
|
4,330 |
|
|
|
34,876 |
|
|
|
3,765 |
|
|
|
34,876 |
|
Adjusted EBITDA
(Non-U.S. GAAP) |
|
$ |
164,416 |
|
|
$ |
117,407 |
|
|
$ |
312,359 |
|
|
$ |
189,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*See Reconciliation
of Net Earnings to Adjusted Net 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 March 31, |
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Nonsegment expenses (U.S. GAAP) |
|
$ |
32,834 |
|
|
$ |
58,307 |
|
|
$ |
59,034 |
|
|
$ |
82,618 |
|
Non-recurring gain related to
a previous acquisition |
|
|
- |
|
|
|
- |
|
|
|
4,803 |
|
|
|
- |
|
Certain non-recurring
separation costs |
|
|
(2,666 |
) |
|
|
(2,208 |
) |
|
|
(2,666 |
) |
|
|
(2,208 |
) |
Business development
activities |
|
|
(1,664 |
) |
|
|
- |
|
|
|
(5,902 |
) |
|
|
- |
|
Specific charge for excess and
obsolete inventory |
|
|
- |
|
|
|
(11,995 |
) |
|
|
- |
|
|
|
(11,995 |
) |
Product rationalization |
|
|
- |
|
|
|
(10,504 |
) |
|
|
- |
|
|
|
(10,504 |
) |
Restructuring charge |
|
|
- |
|
|
|
(5,172 |
) |
|
|
- |
|
|
|
(5,172 |
) |
Non-recurring charge related
to customer collections |
|
|
- |
|
|
|
(4,997 |
) |
|
|
- |
|
|
|
(4,997 |
) |
Adjusted nonsegment
expenses (Non-U.S. GAAP) |
|
$ |
28,504 |
|
|
$ |
23,431 |
|
|
$ |
55,269 |
|
|
$ |
47,742 |
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO
FREE CASH FLOW1 AND ADJUSTED FREE
CASH FLOW1 |
(Unaudited - in thousands) |
|
|
|
|
|
|
Six Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
|
Net cash provided by operating activities (U.S. GAAP) |
|
$ |
144,118 |
|
|
$ |
40,150 |
|
Payments for
property, plant, and equipment |
|
|
(56,301 |
) |
|
|
(44,046 |
) |
Free cash
flow (Non-U.S. GAAP) |
|
|
87,817 |
|
|
|
(3,896 |
) |
Cash received for
a non-recurring matter related to a previous acquisition |
|
|
(4,803 |
) |
|
|
- |
|
Cash paid for
business development activities |
|
|
4,293 |
|
|
|
- |
|
Cash paid for
non-recurring matter unrelated to the ongoing operations of the
business |
|
|
2,725 |
|
|
|
- |
|
Cash paid for
restructuring charges |
|
|
- |
|
|
|
2,836 |
|
Adjusted
free cash flow (Non-U.S. GAAP) |
|
$ |
90,032 |
|
|
$ |
(1,060 |
) |
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 non-recurring
gain related to a previous acquisition, (ii) costs related to
business development activities, (iii) certain non-restructuring
separation costs, (iv) a specific charge for excess and obsolete
inventory, (v) product rationalization, (vi) a restructuring
charges, and (vii) a non-recurring charge related to customer
collections. 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 process
change that resulted in the identification and write down of
certain excess inventory unrelated 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 cash
received for a non-recurring matter related to a previous
acquisition, minus (i) cash paid for business development
activities, (ii) cash paid for a non-recurring matter unrelated to
the ongoing operations of the business, and (iii) cash paid for
restructuring charges. 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 (i) a non-recurring gain related to
a previous acquisition, (ii) costs related to business development
activities, (iii) certain non-restructuring separation costs, (iv)
cash received for a non-recurring matter related to a previous
acquisition, (v) cash paid for business development activities, and
(vi) cash paid for non-recurring matter unrelated to the ongoing
operations of the business.
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 adjusted net earnings, adjusted
earnings per share, 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 and adjusted free cash flow do 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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