Woodward, Inc. (NASDAQ:WWD) today reported financial results for
its second 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.)
Second Quarter Overview
- Net sales were $587 million,
compared to $581 million, an increase of 1 percent.
- Net earnings were $48 million, or
$0.74 per share, compared to net earnings of $68 million, or $1.04
per share.
- Adjusted net earnings1 were $47
million, or $0.72 per share.
- Net cash provided by operating
activities was $50 million for the first half of fiscal 2022,
compared to $219 million. Free cash flow1 for the first half of
fiscal 2022 was $26 million, compared to $206 million. Adjusted
free cash flow1 for the first half of fiscal 2022 was $27 million.
There were no adjustments made to free cash flow during the first
half of the prior fiscal year.
“We continue to see recovery across most of our end markets;
however, ongoing industry-wide COVID-19 related disruptions,
including supply chain constraints and labor shortages, as well as
higher inflation, provided greater than anticipated pressure on our
results in the second quarter,” said Thomas A. Gendron, Chairman
and Chief Executive Officer. “Aerospace segment sales benefitted
from recovering passenger traffic and increased aircraft
utilization, while defense sales were down. Our Industrial segment
sales were positively impacted by increased demand in marine
transportation and power generation as well as a recovering oil and
gas market, although the China natural gas market continues to be
challenged. While market volatility remains, we expect further
recovery across our end markets, and we remain focused on improving
our operational execution and delivering on our backlog.”
Second Quarter Company
Results
Net sales for the second quarter of fiscal 2022 were $587
million, compared to $581 million for the second quarter of last
year, an increase of 1 percent. Sales for the second quarter were
negatively impacted by approximately $100 million due to ongoing
industry-wide COVID-19 related disruptions.
Net earnings were $48 million, or $0.74 per share, for the
second quarter of 2022, compared to $68 million, or $1.04 per
share. Adjusted net earnings for the second quarter of 2022 were
$47 million, or $0.72 per share. There were no adjustments made to
net earnings in the prior year second quarter.
EBIT1 was $62 million for the second quarter of 2022, compared
to $86 million. Adjusted EBIT1 was $60 million for the second
quarter of 2022. There were no adjustments to EBIT in the second
quarter of the prior year.
The effective tax rate was 11.4 percent for the second quarter
of 2022, compared to 13.0 percent. The adjusted effective tax rate1
for the second quarter of 2022 was 11.0 percent. There were no
adjustments to the effective tax rate in the second quarter of the
prior year.
Segment Results
Aerospace
Aerospace segment net sales for the second quarter of fiscal
2022 were $373 million, compared to $365 million, an increase of 2
percent.
Commercial OEM and aftermarket sales increased significantly
compared to the prior year quarter driven by higher OEM production
rates, continued recovery in passenger traffic, and increasing
aircraft utilization. Defense sales were down compared to the prior
year quarter primarily due to lower guided weapons sales, as well
as lower defense aftermarket sales as a result of COVID-19 related
disruptions. However, with the exception of guided weapons, defense
demand remained stable at elevated levels.
Segment earnings for the second quarter of 2022 were $60
million, compared to $69 million. Segment earnings as a percent of
segment net sales were 16.0 percent for the second quarter of 2022,
compared to 18.9 percent. Aerospace segment earnings decreased
primarily as a result of net inflationary impacts, including
material and labor cost increases, as well as increases in
manufacturing costs related to COVID-19 disruptions and
inefficiencies related to hiring and training.
Industrial
Industrial segment net sales for the second quarter of fiscal
2022 were $214 million, compared to $217 million, a decrease of 1
percent. Foreign currency exchange rates had an unfavorable impact
on Industrial segment net sales for the second quarter of 2022 of
approximately $8 million. Industrial sales for the second quarter
of 2022 declined primarily due to weakness in China natural gas
engines, partially offset by higher marine sales driven by higher
utilization of the in-service fleet.
Industrial segment earnings for the second quarter of 2022 were
$17 million, or 8.1 percent of segment net sales, compared to $28
million, or 12.9 percent of segment net sales. Industrial segment
earnings decreased primarily as a result of net inflationary
impacts, including material and labor cost increases, as well as
increases in manufacturing costs related to COVID-19 disruptions
and inefficiencies related to hiring and training.
Nonsegment
Nonsegment expenses were $15 million for the second quarter of
fiscal 2022, compared to $10 million. Adjusted nonsegment expenses1
were $17 million for the second quarter of 2022. There were no
adjustments to nonsegment expenses in the prior year period. The
increase in nonsegment expenses was the result of the timing of
certain expenses, as well as the return of annual variable
incentive compensation costs.
Year-to-Date Results
Net sales for the first half of 2022 were $1.13 billion,
compared to $1.12 billion. Net earnings for the first half of 2022
were $78 million, or $1.21 per share, compared to $110 million, or
$1.68 per share. Adjusted net earnings for the first half of 2022
were $83 million, or $1.28 per share. There were no adjustments to
earnings in the prior year period.
The effective tax rate was 14.8 percent for the first half of
2022, compared to 12.8 percent. The adjusted effective tax rate for
the first half of 2022 was 15.5 percent. There were no adjustments
to the effective tax rate in the first half of the prior year.
Aerospace segment net sales for the first half of 2022 were $709
million, compared to $686 million. Aerospace segment earnings for
the first half of 2022 were $111 million, or 15.6 percent of
segment net sales, compared to $115 million, or 16.8 percent of
segment net sales.
Industrial segment net sales for the first half of 2022 were
$419 million, compared to $433 million. Industrial segment earnings
for the first half of 2022 were $41 million, or 9.8 percent of
segment net sales, compared to $61 million, or 14.0 percent of
segment net sales.
Nonsegment expenses were $45 million for the first half of 2022,
compared to $34 million. Adjusted nonsegment expenses were $38
million. There were no adjustments to nonsegment expense for the
first half of the prior year.
Cash Flow and Financial
Position
Net cash provided by operating activities for the first half of
fiscal year 2022 was $50 million, compared to $219 million.
Payments for property, plant, and equipment for the first half of
2022 were $24 million, compared to $13 million for the first half
of 2021.
Free cash flow for the first half of 2022 was $26 million,
compared to $206 million. Adjusted free cash flow was $27 million.
There were no adjustments to cash flow in the prior year. The
decrease in free cash flow was primarily related to working capital
increases to support this year’s second half anticipated
growth.
During the first half of 2022, $294 million was returned to
stockholders in the form of $22 million of dividends and $272
million of repurchased shares.
Total debt was $729 million at March 31, 2022, compared to $737
million at March 31, 2021. Debt-to-EBITDA1 leverage was 1.8 times
EBITDA at March 31, 2022, compared to 1.7 times EBITDA at March 31,
2021.
Fiscal Year 2022 Outlook
COVID-19 operational related disruptions and net inflationary
impacts during the second quarter of fiscal 2022 were greater than
anticipated. Although operational improvement is expected through
the remainder of the year, Woodward has revised its fiscal year
2022 outlook. The revised outlook assumes the current inflationary
environment does not significantly worsen.
Total net sales for 2022 are now expected to be between $2.40
and $2.55 billion. Aerospace sales growth percentage is still
expected to be in the low double digits to mid-teens. Industrial
sales growth percentage is now expected to be between 5 and 10
percent.
Aerospace segment earnings as a percent of segment net sales are
now expected to be approximately 18 percent. Industrial segment
earnings as a percent of segment net sales are now expected to be
between 10 and 11 percent.
The adjusted effective tax rate is now expected to be
approximately 20 percent.
Adjusted free cash flow is now expected to be approximately $200
to $230 million. Adjusted free cash flow conversion rate is still
expected to be greater than 100 percent. Also, capital expenditures
are now expected to be approximately $60 million.
Adjusted earnings per share is now expected to be between $3.20
and $3.60 based on approximately 64 million of fully diluted
weighted average shares outstanding. The previous outlook assumed
approximately 66 million of fully diluted weighted average shares
outstanding, which would equate to adjusted earnings per share
between $3.10 and $3.50.
Conference Call
Woodward will hold an investor conference call at 4:30 p.m. EDT,
May 2, 2022, to provide an overview of the financial performance
for the second 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 6577704. An audio replay will be available by
telephone from 7:30 p.m. EDT on May 2, 2022 until 11:59 p.m. EDT on
May 16, 2022. The telephone number to access the replay is
1-855-859-2056 (domestic) or 1-404-537-3406 (international),
reference access code 6577704.
A webcast presentation will be available on the website by
selecting “Investors/Events & Presentations”.
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 year 2022, including assumptions regarding our
outlook, trends in our business, statements about the continued and
expected or potential effects of the COVID-19 pandemic and related
supply chain constraints and labor shortages as well as
inflationary pressures on our business and the management of our
business, the continued market volatility and expected further
recovery across our markets, the ongoing challenges in the China
natural gas truck market, expected improvement through the
remainder of the fiscal year with respect to COVID-19 related
disruptions, particularly with respect to COVID-19 related supply
chain disruptions, our ability to improve our operational execution
and to deliver on our backlog, 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, our
anticipated growth during the second half of this fiscal year 2022.
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, 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, 2022, 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 |
|
|
Six-Months Ended |
|
|
March 31, |
|
|
March 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ |
586,839 |
|
|
$ |
581,321 |
|
|
$ |
1,128,425 |
|
|
$ |
1,118,940 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
453,425 |
|
|
|
434,243 |
|
|
|
872,576 |
|
|
|
835,883 |
|
Selling, general, and administrative expenses |
|
44,124 |
|
|
|
44,329 |
|
|
|
106,430 |
|
|
|
100,440 |
|
Research and development costs |
|
32,384 |
|
|
|
27,627 |
|
|
|
57,776 |
|
|
|
59,623 |
|
Interest expense |
|
8,197 |
|
|
|
8,249 |
|
|
|
16,503 |
|
|
|
17,155 |
|
Interest income |
|
(500 |
) |
|
|
(283 |
) |
|
|
(1,141 |
) |
|
|
(778 |
) |
Other (income) expense, net |
|
(4,887 |
) |
|
|
(11,331 |
) |
|
|
(15,561 |
) |
|
|
(19,454 |
) |
Total costs and expenses |
|
532,743 |
|
|
|
502,834 |
|
|
|
1,036,583 |
|
|
|
992,869 |
|
Earnings before income
taxes |
|
54,096 |
|
|
|
78,487 |
|
|
|
91,842 |
|
|
|
126,071 |
|
Income taxes |
|
6,190 |
|
|
|
10,174 |
|
|
|
13,631 |
|
|
|
16,188 |
|
Net
earnings |
$ |
47,906 |
|
|
$ |
68,313 |
|
|
$ |
78,211 |
|
|
$ |
109,883 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
amounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.77 |
|
|
$ |
1.08 |
|
|
$ |
1.24 |
|
|
$ |
1.74 |
|
Diluted earnings per
share |
$ |
0.74 |
|
|
$ |
1.04 |
|
|
$ |
1.21 |
|
|
$ |
1.68 |
|
Weighted average
common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
62,550 |
|
|
|
63,278 |
|
|
|
62,825 |
|
|
|
63,043 |
|
Diluted |
|
64,618 |
|
|
|
65,654 |
|
|
|
64,863 |
|
|
|
65,274 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash dividends per share paid
to Woodward common stockholders |
$ |
0.1900 |
|
|
$ |
0.1625 |
|
|
$ |
0.3525 |
|
|
$ |
0.2438 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
March 31, |
|
|
September 30, |
|
|
2022 |
|
|
2021 |
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
208,355 |
|
|
$ |
448,462 |
|
Accounts receivable |
|
575,174 |
|
|
|
523,051 |
|
Inventories |
|
484,933 |
|
|
|
419,971 |
|
Income taxes receivable |
|
17,415 |
|
|
|
12,071 |
|
Other current assets |
|
45,513 |
|
|
|
61,168 |
|
Total current assets |
|
1,331,390 |
|
|
|
1,464,723 |
|
Property, plant, and equipment, net |
|
923,651 |
|
|
|
950,569 |
|
Goodwill |
|
796,028 |
|
|
|
805,333 |
|
Intangible assets, net |
|
522,502 |
|
|
|
559,289 |
|
Deferred income tax assets |
|
13,798 |
|
|
|
14,066 |
|
Other assets |
|
303,175 |
|
|
|
297,024 |
|
Total
assets |
$ |
3,890,544 |
|
|
$ |
4,091,004 |
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders’ equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Current portion of long-term debt |
$ |
459 |
|
|
$ |
728 |
|
Accounts payable |
|
188,543 |
|
|
|
170,909 |
|
Income taxes payable |
|
17,701 |
|
|
|
11,481 |
|
Accrued liabilities |
|
162,343 |
|
|
|
183,139 |
|
Total current liabilities |
|
369,046 |
|
|
|
366,257 |
|
Long-term debt, less current portion |
|
728,247 |
|
|
|
734,122 |
|
Deferred income tax liabilities |
|
155,092 |
|
|
|
157,936 |
|
Other liabilities |
|
586,280 |
|
|
|
617,908 |
|
Total liabilities |
|
1,838,665 |
|
|
|
1,876,223 |
|
Stockholders’ equity |
|
2,051,879 |
|
|
|
2,214,781 |
|
Total liabilities and
stockholders’ equity |
$ |
3,890,544 |
|
|
$ |
4,091,004 |
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
Six-Months Ended |
|
|
March 31, |
|
|
2022 |
|
|
2021 |
|
Net cash provided by
operating activities |
$ |
50,108 |
|
|
$ |
218,997 |
|
|
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
|
Payments for purchase of
property, plant, and equipment |
|
(24,150 |
) |
|
|
(13,313 |
) |
Proceeds from sale of
assets |
|
5 |
|
|
|
86 |
|
Payments for purchases of
short-term investments |
|
(8 |
) |
|
|
(2,750 |
) |
Proceeds from sales of
short-term investments |
|
11,305 |
|
|
|
16,566 |
|
Net cash provided by
(used in) investing activities |
|
(12,848 |
) |
|
|
589 |
|
|
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
|
Cash dividends paid |
|
(22,134 |
) |
|
|
(15,404 |
) |
Proceeds from sales of
treasury stock |
|
19,399 |
|
|
|
28,454 |
|
Purchase of treasury
stock |
|
(273,535 |
) |
|
|
- |
|
Borrowings on revolving lines
of credit and short-term borrowings |
|
11,500 |
|
|
|
74,400 |
|
Payments on revolving lines of
credit and short-term borrowings |
|
(11,500 |
) |
|
|
(74,400 |
) |
Payments of long-term debt and
finance lease obligations |
|
(564 |
) |
|
|
(100,835 |
) |
Net cash used in
financing activities |
|
(276,834 |
) |
|
|
(87,785 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(533 |
) |
|
|
2,524 |
|
Net change in cash and
cash equivalents |
|
(240,107 |
) |
|
|
134,325 |
|
Cash and cash equivalents at
beginning of year |
|
448,462 |
|
|
|
153,270 |
|
Cash and cash equivalents at
end of period |
$ |
208,355 |
|
|
$ |
287,595 |
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
SEGMENT NET SALES AND EARNINGS |
(Unaudited - in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months EndedMarch 31, |
|
|
Six-Months EndedMarch 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net
sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ |
372,757 |
|
|
$ |
364,706 |
|
|
$ |
709,192 |
|
|
$ |
686,373 |
|
Industrial |
|
214,082 |
|
|
|
216,615 |
|
|
|
419,233 |
|
|
|
432,567 |
|
Total consolidated net
sales |
$ |
586,839 |
|
|
$ |
581,321 |
|
|
$ |
1,128,425 |
|
|
$ |
1,118,940 |
|
Segment
earnings*: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace |
$ |
59,809 |
|
|
$ |
69,008 |
|
|
$ |
110,892 |
|
|
$ |
115,474 |
|
As a percent of segment net
sales |
|
16.0 |
% |
|
|
18.9 |
% |
|
|
15.6 |
% |
|
|
16.8 |
% |
Industrial |
|
17,234 |
|
|
|
27,871 |
|
|
|
40,927 |
|
|
|
60,759 |
|
As a percent of segment net
sales |
|
8.1 |
% |
|
|
12.9 |
% |
|
|
9.8 |
% |
|
|
14.0 |
% |
Total segment
earnings |
|
77,043 |
|
|
|
96,879 |
|
|
|
151,819 |
|
|
|
176,233 |
|
Nonsegment expenses |
|
(15,250 |
) |
|
|
(10,426 |
) |
|
|
(44,615 |
) |
|
|
(33,785 |
) |
EBIT |
|
61,793 |
|
|
|
86,453 |
|
|
|
107,204 |
|
|
|
142,448 |
|
Interest expense, net |
|
(7,697 |
) |
|
|
(7,966 |
) |
|
|
(15,362 |
) |
|
|
(16,377 |
) |
Consolidated earnings
before income taxes |
$ |
54,096 |
|
|
$ |
78,487 |
|
|
$ |
91,842 |
|
|
$ |
126,071 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*This schedule
reconciles segment earnings, which exclude certain costs, to
consolidated earnings before taxes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property,
plant and equipment |
$ |
11,027 |
|
|
$ |
6,050 |
|
|
$ |
24,150 |
|
|
$ |
13,313 |
|
Depreciation
expense |
$ |
21,023 |
|
|
$ |
21,919 |
|
|
$ |
42,056 |
|
|
$ |
44,527 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF EARNINGS TO ADJUSTED
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Months Ended |
|
Three-Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
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) |
$ |
54,096 |
|
|
$ |
47,906 |
|
|
$ |
0.74 |
|
|
$ |
78,487 |
|
|
$ |
68,313 |
|
|
$ |
1.04 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring matter unrelated to the ongoing operations of the
business |
(1,728 |
) |
|
(1,296 |
) |
|
|
(0.02 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development activities |
- |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total non-U.S. GAAP
adjustments |
|
(1,728 |
) |
|
|
(1,296 |
) |
|
|
(0.02 |
) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted earnings
(Non-U.S. GAAP) |
$ |
52,368 |
|
|
$ |
46,610 |
|
|
$ |
0.72 |
|
|
$ |
78,487 |
|
|
$ |
68,313 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Woodward, Inc. and Subsidiaries |
RECONCILIATION OF EARNINGS TO ADJUSTED
EARNINGS1 |
(Unaudited - in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six-Months Ended |
|
Six-Months Ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
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) |
$ |
91,842 |
|
|
$ |
78,211 |
|
|
$ |
1.21 |
|
|
$ |
126,071 |
|
|
$ |
109,883 |
|
|
$ |
1.68 |
|
Non-U.S. GAAP
adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring matter unrelated to the ongoing operations of the
business |
|
3,272 |
|
|
|
2,454 |
|
|
|
0.04 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Business development activities |
|
2,982 |
|
|
|
2,236 |
|
|
|
0.03 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Total non-U.S. GAAP
adjustments |
|
6,254 |
|
|
|
4,690 |
|
|
|
0.07 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Adjusted earnings
(Non-U.S. GAAP) |
$ |
98,096 |
|
|
$ |
82,901 |
|
|
$ |
1.28 |
|
|
$ |
126,071 |
|
|
$ |
109,883 |
|
|
$ |
1.68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net earnings (U.S. GAAP) |
$ |
47,906 |
|
|
$ |
68,313 |
|
|
$ |
78,211 |
|
|
$ |
109,883 |
|
Income taxes |
|
6,190 |
|
|
|
10,174 |
|
|
|
13,631 |
|
|
|
16,188 |
|
Interest expense |
|
8,197 |
|
|
|
8,249 |
|
|
|
16,503 |
|
|
|
17,155 |
|
Interest income |
|
(500 |
) |
|
|
(283 |
) |
|
|
(1,141 |
) |
|
|
(778 |
) |
EBIT (Non-U.S. GAAP) |
|
61,793 |
|
|
|
86,453 |
|
|
|
107,204 |
|
|
|
142,448 |
|
Non-U.S. GAAP
adjustments* |
|
(1,728 |
) |
|
|
- |
|
|
|
6,254 |
|
|
|
- |
|
Adjusted
EBIT (Non-U.S. GAAP) |
$ |
60,065 |
|
|
$ |
86,453 |
|
|
$ |
113,458 |
|
|
$ |
142,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 March 31, |
|
|
Six-Months Ended March 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net earnings (U.S. GAAP) |
$ |
47,906 |
|
|
$ |
68,313 |
|
|
$ |
78,211 |
|
|
$ |
109,883 |
|
Income taxes |
|
6,190 |
|
|
|
10,174 |
|
|
|
13,631 |
|
|
|
16,188 |
|
Interest expense |
|
8,197 |
|
|
|
8,249 |
|
|
|
16,503 |
|
|
|
17,155 |
|
Interest income |
|
(500 |
) |
|
|
(283 |
) |
|
|
(1,141 |
) |
|
|
(778 |
) |
Amortization of intangible
assets |
|
9,587 |
|
|
|
10,560 |
|
|
|
19,275 |
|
|
|
21,029 |
|
Depreciation expense |
|
21,023 |
|
|
|
21,919 |
|
|
|
42,056 |
|
|
|
44,527 |
|
EBITDA (Non-U.S. GAAP) |
|
92,403 |
|
|
|
118,932 |
|
|
|
168,535 |
|
|
|
208,004 |
|
Non-U.S. GAAP
adjustments* |
|
(1,728 |
) |
|
|
- |
|
|
|
6,254 |
|
|
|
- |
|
Adjusted
EBITDA (Non-U.S. GAAP) |
$ |
90,675 |
|
|
$ |
118,932 |
|
|
$ |
174,789 |
|
|
$ |
208,004 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*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 March 31, |
|
|
Six-Months Ended March 31, |
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Nonsegment expenses (U.S.
GAAP) |
$ |
15,250 |
|
|
$ |
10,426 |
|
|
$ |
44,615 |
|
|
$ |
33,785 |
|
Non-recurring matter unrelated
to the ongoing operations of the business |
|
1,728 |
|
|
|
- |
|
|
|
(3,272 |
) |
|
|
- |
|
Business development
activities |
|
- |
|
|
|
- |
|
|
|
(2,982 |
) |
|
|
- |
|
Adjusted nonsegment
expenses (Non-U.S. GAAP) |
$ |
16,978 |
|
|
$ |
10,426 |
|
|
$ |
38,361 |
|
|
$ |
33,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, |
|
|
2022 |
|
|
2021 |
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities (U.S. GAAP) |
$ |
50,108 |
|
|
$ |
218,997 |
|
Payments for property, plant,
and equipment |
|
(24,150 |
) |
|
|
(13,313 |
) |
Free cash
flow (Non-U.S. GAAP) |
|
25,958 |
|
|
|
205,684 |
|
Cash paid for business
development activities |
|
770 |
|
|
|
- |
|
Cash paid for restructuring
charges |
|
505 |
|
|
|
- |
|
Adjusted free cash
flow (Non-U.S. GAAP) |
$ |
27,233 |
|
|
$ |
205,684 |
|
|
|
|
|
|
|
|
|
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 and partial reversal
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 ProvaznikDirector, Investor
Relations970-498-3849Dan.Provaznik@woodward.com |
Woodward (NASDAQ:WWD)
Historical Stock Chart
From Apr 2024 to May 2024
Woodward (NASDAQ:WWD)
Historical Stock Chart
From May 2023 to May 2024