SECURITIES and EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
Commission File Number 1-134
CURTISS-WRIGHT CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 13-0612970
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Wall Street West
Lyndhurst, New Jersey 07071
(Address of principal executive offices) (Zip Code)
(201) 896-8400
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, par value $1.00 per share: 5,087,280 shares (as of July 31, 1997)
Page 1 of 16
<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
TABLE of CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Earnings 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Stockholders' Equity 6
Notes to Consolidated Financial Statements 7 - 9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 14
Forward-Looking Statements 15
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 16
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands)
June 30, December 31,
1997 1996
Assets:
Cash and cash equivalents $ 4,652 $ 6,317
Short-term investments 58,263 55,674
Receivables, net 46,223 37,708
Deferred tax asset 9,316 8,769
Inventories 46,395 46,987
Other current assets 1,942 2,378
--------- ---------
Total current assets 166,791 157,833
--------- ---------
Property, plant and equipment, at cost 214,902 210,230
Less, accumulated depreciation 150,081 146,268
--------- ---------
Property, plant and equipment, net 64,821 63,962
Prepaid pension costs 36,736 35,016
Other assets 10,156 10,353
--------- ---------
Total assets $278,504 $267,164
========= =========
Liabilities:
Accounts payable and accrued expenses $ 24,953 $ 25,206
Dividends payable 1,272
Income taxes payable 5,861 3,189
Other current liabilities 14,253 14,021
-------- ---------
Total current liabilities 46,339 42,416
-------- ---------
Long-term debt 10,347 10,347
Deferred income taxes 9,247 8,686
Other liabilities 21,408 22,352
-------- ---------
Total liabilities 87,341 83,801
-------- ---------
Stockholders' equity:
Common stock, $1 par value 10,000 10,000
Capital surplus 57,045 57,127
Retained earnings 309,202 299,740
Unearned portion of restricted stock (477) (608)
Equity adjustments from foreign currency
translation (3,489) (1,506)
---------- ---------
372,281 364,753
Less, cost of treasury stock 181,118 181,390
--------- ---------
Total stockholders' equity 191,163 183,363
--------- ---------
Total liabilities and stockholders' equity $278,504 $267,164
======== =========
See notes to consolidated financial statements.
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of EARNINGS
(UNAUDITED)
(In thousands except per share data)
Six Months Ended Three Months Ended
June 30, June 30,
---------------------- ------------------
1997 1996(1) 1997 1996(1)
---- ---- ---- ----
Net sales $107,560 $79,559 $54,412 $43,243
Cost of sales 71,791 53,162 35,287 29,089
---------- -------- -------- --------
Gross margin 35,769 26,397 19,125 14,154
Research and development costs 946 310 348 141
Selling expenses 2,910 3,230 1,454 1,612
General and administrative 16,653 12,047 8,293 6,120
---------- -------- -------- --------
Operating income 15,260 10,810 9,030 6,281
Investment income, net 1,848 1,535 1,210 1,107
Rental income, net 1,741 1,221 801 774
Other income (expense), net (251) (246) (144) 18
Interest expense 189 193 116 96
----------- -------- --------- --------
Earnings before taxes 18,409 13,127 10,781 8,084
Provision for taxes 6,404 4,610 3,731 2,882
---------- --------- -------- --------
Net earnings $ 12,005 $ 8,517 $ 7,050 $5,202
========== ========= ======== ========
Weighted average number of
common shares outstanding 5,085 5,078 5,085 5,078
===== ===== ===== ======
Earnings per common share $2.36 $1.68 $1.39 $1.02
===== ===== ===== =====
Dividends per common share $0.50 $0.50 $0.25 $0.25
===== ===== ===== =====
(1) Prior year information has been restated to conform to current presentation.
See notes to consolidated financial
statements.
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of CASH FLOWS
(UNAUDITED)
(In thousands)
Six Months Ended
June 30
1997 1996
Cash flows from operating activities:
Net earnings $12,005 $ 8,517
------- -------
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 4,948 4,472
Net gains on short-term investments (1,070) (316)
Increase in deferred taxes 14 573
Changes in operating assets and liabilities:
Proceeds from sales of trading securities 135,263 187,303
Purchases of trading securities (136,621) (169,810)
Increase in receivables (4,636) (1,382)
Increase in inventory (1,603) (4,060)
Increase (decrease) in progress payments (1,684) 73
Increase (decease) in accounts payable
and accrued expenses (253) 3,619
Increase in income taxes payable 2,672 80
Increase in other assets (1,252) (2,371)
Decrease in other liabilities (873) (1,503)
Other, net (1,411) (637)
--------- ---------
Total adjustments (6,506) 16,041
--------- ---------
Net cash provided by operating activities 5,499 24,558
-------- ---------
Cash flows from investing activities:
Proceeds from sales of real estate and equipment 18 420
Additions to property, plant and equipment (5,911) (5,187)
Acquisition of Accessory Services business (16,390)
-------- ---------
Net cash used by investing activities (5,893) (21,157)
-------- ---------
Cash flows from financing activities:
Dividends paid (1,271) (2,539)
-------- --------
Net cash used by financing activities (1,271) (2,539)
-------- --------
Net increase (decrease) in cash and cash
equivalents (1,665) 862
Cash and cash equivalents at beginning of period 6,317 8,865
------- --------
Cash and cash equivalents at end of period $ 4,652 $ 9,727
======= ========
See notes to consolidated financial
statements.
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<PAGE>
<TABLE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
CONSOLIDATED STATEMENTS of STOCKHOLDERS' EQUITY
(UNAUDITED)
(In thousands)
<CAPTION>
Equity
Unearned Adjustments
Portion of from Foreign
Common Capital Retained Restricted Currency Treasury
Stock Surplus Earnings Stock Awards Translation Stock
<S> <C> <C> <C> <C> <C> <C>
December 31, 1995 $10,000 $57,141 $288,710 $(780) $(1,330) $181,562
Net earnings 16,109
Common dividends (5,079)
Stock awards issued 10 (93) (83)
Stock options exercised (24) (89)
Amortization of earnings portion
of restricted stock 265
Translation adjustments, net (176)
------- ------- -------- ----- -------- --------
December 31, 1996 10,000 57,127 299,740 (608) (1,506) 181,390
Net earnings 12,005
Common dividends (2,543)
Stock options exercised (82) (272)
Amortization of earned portion
of restricted stock 131
Translation adjustment, net (1,983)
------- ------- -------- ------ ------- ---------
June 30, 1997 $10,000 $57,045 $309,202 $(477) $(3,489) $181,118
======= ======= ======== ====== ======== =========
See notes to consolidated financial statements.
</TABLE>
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS of PRESENTATION
Curtiss-Wright Corporation (the "Corporation") is a diversified
multi-national manufacturing and service concern that designs,
manufactures and overhauls precision components and systems and
provides highly engineered services to the aerospace, automotive,
shipbuilding, oil, petrochemical, agricultural equipment, power
generation, metal working and fire & rescue industries. Operations are
conducted principally by three wholly-owned subsidiaries:
Curtiss-Wright Flight Systems, Inc., Metal Improvement Company, Inc.
and Curtiss-Wright Flow Control Corporation. The group's principal
operations include three domestic manufacturing facilities, thirty-four
Metal Improvement service facilities located in North America and
Europe, and five component overhaul facilities.
The information furnished in this report has been prepared in
conformity with generally accepted accounting principles and as such
reflects all adjustments, consisting primarily of normal recurring
accruals, which are, in the opinion of management, necessary for a fair
statement of the results for the interim periods presented. The
unaudited consolidated financial statements should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Corporation's 1996 Annual Report on Form 10-K.
The results of operations for these interim periods are not necessarily
indicative of the operating results for a full year.
2. RECEIVABLES
Receivables, at June 30, 1997 and December 31, 1996, include amounts
billed to customers and unbilled charges on long-term contracts
consisting of amounts recognized as sales but not billed at the dates
presented. Substantially all amounts of unbilled receivables are
expected to be billed and collected within a year. The composition of
receivables for those periods is as follows:
(In thousands)
June 30, December 31,
1997 1996
Accounts receivable, billed $49,109 $37,253
Less: progress payments applied 7,443 5,701
--------- --------
41,666 31,552
--------- --------
Unbilled charges on long-term
contracts 12,693 19,761
Less: progress payments applied 6,427 12,048
-------- --------
6,266 7,713
--------- ---------
Allowance for doubtful accounts (1,709) (1,557)
--------- ---------
Receivables, net $46,223 $37,708
========= =========
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
3. INVENTORIES
Inventories are valued at the lower of cost (principally average cost)
or market. The composition of inventories at June 30, 1997 and December
31, 1996 is as follows:
(In thousands)
June 30, December 31,
1997 1996
Raw materials $ 5,042 $ 4,653
Work-in-process 24,218 25,128
Finished goods 18,062 15,817
Inventoried costs related to U.S.
Government and other long-term
contracts 6,186 6,307
--------- ---------
Total inventories 53,508 51,905
Less: progress payments applied,
principally related to long-term
contracts 7,113 4,918
--------- ---------
Net inventories $46,395 $46,987
========= =========
4. ENVIRONMENTAL MATTERS
The Corporation establishes a reserve for a potential environmental
responsibility when it concludes that a determination of legal
liability is probable. Such amounts, if quantified, reflect the
Corporation's estimate of the amount of that liability. If only a range
of potential liability can be estimated, a reserve will be established
at the low end of that range. Such reserves represent today's values of
anticipated remediation not reduced by any potential recovery from
insurance carriers or through contested third-party legal actions, and
are not discounted for the time value of money.
The Corporation is joined with many other corporations and
municipalities as potentially responsible parties (PRPs) in a number of
environmental cleanup sites, which include the Sharkey Landfill
Superfund Site, Parsippany, N. J., Caldwell Trucking Company Superfund
Site, Fairfield, N. J., and Pfohl Brothers Landfill Site, Cheektowaga,
N. Y., identified to date as the most significant sites. Other
environmental sites in which the Corporation is involved include but
are not limited to Chemsol, Inc. Superfund Site, Piscataway, N. J., and
PJP Landfill, Jersey City, N. J.
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued
(UNAUDITED)
The Corporation believes that the outcome of any of these matters would
not have a material adverse effect on the Corporation's results of
operations or financial condition.
5. EARNINGS PER SHARE
Earnings per share were computed by dividing the applicable amount of
earnings by the weighted average number of common shares outstanding
during each period shown in the accompanying Consolidated Statements of
Earnings. The assumed exercise of outstanding stock options had an
immaterial dilutive effect on earnings per share in each respective
period.
6. RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share" ("SFAS No. 128"). This
statement simplifies the standards for computing earnings per share
("EPS"), making them comparable to international EPS standards and
amends certain disclosure requirements regarding EPS. The Corporation
plans to adopt this statement for interim and annual periods ending
after December 15, 1997 which is the statement's effective date. The
statement is not expected to have a material impact on the Corporation.
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<PAGE>
PART I - ITEM 2
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS
RESULTS of OPERATIONS
Curtiss-Wright Corporation posted a 26% increase in sales and a 36%
increase in consolidated net earnings for the second quarter of 1997, as
compared with the second quarter of 1996. Net earnings of $7.0 million, or $1.39
per share for the 1997 period, represent the highest quarterly earnings per
share amount achieved by the Corporation in seven years. In the aggregate,
operating earnings totaled $9.0 million for the second quarter of 1997, a 44%
increase over the same quarter of last year. Sales totaled $54.4 million for the
second quarter of 1997 compared with sales of $43.2 million for the same prior
year period. New orders received during the second quarter 1997 period also
increased, totaling $53.4 million, compared with orders of $44.4 million
received in the same period of 1996. Increases in sales, new orders and net
earnings reflect the continued improvements generated by the Corporation's
Aerospace & Marine segment, both in its traditional product lines and, to a
lesser extent, as a result of its May 1996 acquisition of the Miami, Florida
overhaul and repair facility.
For the first six months of 1997 the Corporation posted consolidated
net earnings of $12.0 million, or $2.36 per share, a 41% improvement as compared
with net earnings of $8.5 million, or $1.68 per share, posted for the first six
months of 1996. Sales for the six-month 1997 period were $107.6 million, 35%
higher than sales of $79.6 million posted in the same six-month period of 1996.
Operating income rose 41%, to $15.3 million for the first six months of 1997,
compared with operating income of $10.8 million for the same 1996 period. New
orders received in the first half of 1997 totaled $99.0 million, compared with
new orders of $82.6 million received during the first half of 1996. At June 30,
1997, the Corporation's backlog of unshipped orders totaled $98.8 million,
compared with a backlog of $109.5 million at June 30, 1996.
Segment Performance
The Corporation's Aerospace & Marine segment posted substantially
improved results for both the second quarter and first six months of 1997, when
compared with those for the same periods of 1996. Sales increased 47% in the
second quarter of 1997, to $40.4 million, from sales in the same quarter of the
prior year, and totaled $77.6 million for the six-month 1997 period, 59% higher
than the same six-month period of 1996. Operating income also increased
substantially when comparing both the second quarter and first six months of
1997 with the same respective periods of 1996.
The Corporation posted significant increases in sales of its commercial
aerospace actuation systems when comparing the second quarter and first half of
1997 with the same respective periods of 1996. Sales increases in original
equipment manufacturing (OEM) products are attributable to the high level of
production being
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
generated for Boeing jetliners. New Boeing programs and increased build rates on
traditional programs have contributed to a production sales growth of 149% over
the same six-month period of 1996. Despite significant increases in sales
associated with the new Boeing programs, operating income was partially impaired
due to high initial manufacturing costs. Sales of military actuation products
declined in the aggregate for the Corporation's three major development programs
(F-22, the V-22 and the F/A-18 E/F aircraft) reflecting the conclusion of the
design portion of these programs. Each of these development programs has
achieved substantial levels of completion and further cost overruns should be
limited. Declines in development programs were partially offset by increased
sales in support of Lockheed Martin's foreign military F-16 program.
Aerospace & Marine sales and operating income improvements are also
reflective of a significantly high volume of work being done by our
metal-treating businesses. Sales of metal-treating services to aerospace
customers have increased worldwide when comparing 1997 results with the prior
year.
In addition, segment results for the second quarter and first six
months of 1997 have benefited from full-period contributions from the May 1996
Miami facility acquisition, although only a relatively small portion of the
improved earnings in this segment are attributable to that facility. In the
aggregate, sales of overhaul and repair services, including those of the Miami
facility, totaled $19.6 million and accounted for 25% of Aerospace & Marine
segment sales for the first six months of 1997, compared with 18% for the same
respective period of 1996.
New Orders received by the Aerospace & Marine segment totaled $36.7
million for the second quarter and $66.2 million for the first six months of
1997, increases of 22% and 25%, respectively, from orders received in those same
periods of 1996. The increases in new orders for both periods are primarily due
to a higher volume of metal- treating services and orders resulting from the
Miami operation.
The Industrial segment posted slight declines in sales for both the
second quarter and first six months of 1997, as compared to the same respective
periods of 1996. Sales of industrial products totaled $14.0 million for the
second quarter of 1997, 11% below sales posted in the same prior year period,
while sales for the six-month 1997 period totaled $30.0 million, just 2% below
the prior year. Operating income also declined slightly for both the second
quarter and first six months of 1997 in comparison to results of the same 1996
periods. Declines in sales and operating income for the Industrial segment are
attributed, in part, to a general softening of automotive and other markets
serviced by our metal treating businesses. Sales of commercial valve products
also declined for the second quarter and first six month periods of 1997, as
compared with those same periods of 1996, due to a non-recurrence of the high
level of field service and spare parts sales experienced in the 1996 periods.
For the second quarter of 1997, sales and operating earnings of the Industrial
segment benefited, in part, from
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
a new flapper valve program for the refrigeration industry which started in the
latter part of 1996. New orders received by the Industrial segment in the second
quarter of 1997 increased 16% over orders received in the second quarter of 1996
and improved 10% when comparing the first half of 1997 with the same prior year
period. The Corporation received commercial nuclear valve orders from Korea
totaling more than $3.0 million during the first half of 1997 and expects to
receive additional orders totaling approximately $2.0 million during the third
quarter of 1997.
Non-Operating Revenue and Costs
The Corporation recorded other non-operating net revenue totaling $3.3
million for the first six months of 1997, compared with $2.5 million for the
first six months of 1996. Non-operating net revenue totaled $1.9 million for the
second quarter of both 1997 and 1996. For the six-month period of 1997, net
rental income improved $.5 million, as compared to the prior year period, driven
by an increase in occupancy at the Corporation's Wood-Ridge, New Jersey Business
Complex and a non-recurrence of high maintenance costs at the complex due to the
severe winter of 1996. Investment income increased slightly in the second
quarter and first six month periods of 1997 over the same respective periods of
1996.
While the dollar amount of a administrative expenses for the
Corporation as a whole increased for the second quarter and first six month
periods of 1997, as compared with those same respective periods of 1996, in the
aggregate, such expenses have remained largely consistent as a percentage of
sales for both the 1997 and 1996 periods. Impacting six-month 1997
administrative costs were increased charges for legal services provided in
defense or pursuit of environmental and related claims, offset to an extent by
higher accrued income generated from the Corporation's overfunded pension plan.
Net pension income increased slightly, totaling $1.8 million for the first half
of 1997, compared with $1.5 million for the first half of 1996.
Corporation Expansion
The Corporation recently entered into an exclusive long-term
requirements agreement to provide shot-peening services on aircraft engine parts
for a major customer. In conjunction with the agreement, the Corporation is
preparing to further expand its metal-treating operations later this year, after
having already expanded its international operations by opening a facility in
Belgium earlier this year. A second facility in Germany is scheduled to open in
the third quarter of 1997. Domestic metal- treating capabilities are also being
expanded by the opening of an additional facility in Kansas. This new facility,
the third metal-treating facility in Kansas, is expected to be operational later
this year. In addition, two other domestic metal-treating facilities are moving
to larger quarters, having outgrown their current locations.
The Corporation has also expanded its Accessory Services business to
better service the global aerospace market. During the second quarter of 1997,
the
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
Corporation received approval from the Singapore Trade and Development Board to
open an aerospace parts, distribution and sales center in Singapore. This
represents the fifth facility utilized globally by the Corporation to service
the aerospace overhaul and repair market. The establishment of the Singapore
office follows the recent establishment of a sales office in London, England to
aggressively pursue European opportunities for both OEM and overhaul business.
CHANGES IN FINANCIAL CONDITION:
Liquidity and Capital Resources:
The Corporation's working capital was $120.5 million at June 30, 1997,
a 4% increase from working capital at December 31, 1996 of $115.4 million. The
ratio of current assets to current liabilities was 3.60 to 1 at June 30, 1997,
compared with a current ratio of 3.72 to 1 at December 31, 1996. Cash, cash
equivalents and short-term investments totaled $62.9 million in aggregate at
June 30, 1996, a slight increase from $62.0 million at the prior year end.
Changes in working capital primarily reflect an increase in accounts
receivable caused by significantly higher sales levels. Gross inventory also
increased due to a high level of finished goods maintained at our component
overhaul and repair businesses but was offset by increased progress payments
received under long-term government contracts. Partially offsetting the increase
in working capital was an increase in income taxes payable at June 30, 1997,
from December 31, 1996, and accrued dividends payable for the second quarter of
1997.
The Corporation continues to maintain its $22.5 million revolving
credit lending facility and its $22.5 million short-term credit agreement, which
provide additional sources of capital to the Corporation. The revolving credit
agreement, of which $7.8 million remains unused at June 30, 1997, encompasses
various letters of credit issued primarily in connection with outstanding
industrial revenue bonds. There were no cash borrowings during the first half of
1997 and no outstanding balances for borrowed funds under the agreement at June
30, 1997.
During the first six months of 1997, internally generated funds were
adequate to meet capital expenditures of $5.9 million. Expenditures incurred
during the first half of 1997 were primarily for machinery and equipment at the
Corporation's newly expanded Shelby, North Carolina facility and expenditures
related to the opening of a metal- treating facility in Belgium. Projected funds
from operating sources and the Corporation's short-term investments are expected
to be more than adequate in 1997 to cover the costs of anticipated capital
expenditures, environmental remediation costs
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<PAGE>
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES
MANAGEMENT'S DISCUSSION and ANALYSIS of
FINANCIAL CONDITION and RESULTS of OPERATIONS, Continued
and planned expansion. Capital expenditures of approximately $7.3 million are
anticipated for the balance of the year along with $3.1 million of anticipated
expenditures connected with environmental remediation programs at the
Corporation's Wood-Ridge, New Jersey Business Complex.
Recently Issued Accounting Standards:
As discussed in Note 6 to the Consolidated Financial Statements, the
Corporation plans to adopt SFAS No. 128, "Earnings per Share," for interim and
annual periods ending after December 15, 1997 as required by the statement. The
adoption of SFAS No. 128 is not expected to have a material impact on the
Corporation.
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<PAGE>
FORWARD-LOOKING STATEMENTS
Because forward-looking statements involve risks and uncertainties,
actual results may differ materially from those which are expressed or implied.
Such statements in this report include those contained in (a) the Environmental
Matters note to the Consolidated Financial Statements, (b) projections regarding
development costs and orders in the Results of Operations portion of the
Management Discussion and Analysis ("MD&A") section hereof and (c) information
relating to future capital expenditures contained in the Changes in Financial
Condition portion of the MD&A section hereof. Important factors that could cause
the actual results to differ materially from those in these forward-looking
statements include, among other items, (i) unanticipated environmental
remediation expenses or claims; (ii) a reduction in anticipated orders; (iii) an
economic downturn; (iv) changes in the need for additional machinery and
equipment and/or in the cost for the expansion of the Corporation's operations;
(v) changes in the competitive marketplace and/or customer requirements; (vi) an
inability to perform customer contracts at anticipated cost levels and (vii)
other factors that generally affect the business of aerospace and industrial
companies.
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<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS and REPORTS on FORM 8-K
(a) Exhibits
Exhibit 10 - Material Contracts (Page 17)
Exhibit 27 - Financial Data Schedules (Page 20)
(b) Reports on Form 8-K
The Registrant did not file any report on Form 8-K during the
quarter ended June 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undesigned thereunto duly authorized.
CURTISS-WRIGHT CORPORATION
(Registrant)
By: /s Robert A. Bosi
Robert A. Bosi
Vice President - Finance
By: /s Kenneth P. Slezak
Kenneth P. Slezak
Controller
Dated: August 4, 1997
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EXHIBIT 10
Page 1 of 3
CURTISS-WRIGHT CORPORATION
RETIREMENT BENEFITS
RESTORATION PLAN
(as amended April 15, 1997)
I. Purpose of Plan
The purpose of this Plan is solely to provide a means of paying those
benefits that would be payable under the Curtiss-Wright Corporation Retirement
Plan (the "Retirement Plan") were it not for the limitations now or hereafter
imposed by any provision of the Internal Revenue Code (the "Code") or the
Employee Retirement Income Security Act of 1974 ("ERISA").
II. Administration of the Plan
This Plan shall be administered by the Executive Compensation Committee
(the "Committee") of the Board of Directors of Curtiss Wright Corporation (the
"Corporation"). All questions arising in connection with the interpretation and
application of this Plan shall be determined by the Committee and such
determinations of the Committee shall be final, conclusive and binding upon all
persons.
III. Participation in the Plan
Except to the extent provided in Article IV, hereof, all participants
in the Retirement Plan shall be eligible to participate in this Plan whenever
their benefits under the Retirement Plan as from time to time in effect would be
limited as a result of any provision of the Code (including, but not limited to,
Sections 401(a)(17) and 415 thereof) or ERISA.
IV. Restored Benefits
Each eligible participant in the Retirement Plan (and/or, to the extent
consistent with this Plan and elections made hereunder, his spouse or other
beneficiary under the Retirement Plan) shall receive a supplemental retirement
benefit under this Plan equal to the excess, if any, of
(a) the benefit that would have been payable to him, her or them under
the Retirement Plan, computed on the basis of the participant's:
(1) pre-September 1, 1994 basic salary and cash payments
to the participant under the Corporation's Modified
Incentive Compensation Plan (the "IC Plan"); plus
(2) his or her "compensation," as defined in the Retirement Plan,
from and after September 1, 1994;
in either event calculated without regard to any Retirement Plan provision
incorporating or reflecting (i) limitations imposed by Section 401 (a) (17) of
the Code on the amount of compensation that may
-17-
<PAGE>
Page 2 of 3
be taken into account under the Retirement Plan or (ii) limitations imposed by
Section 415 of the Code or ERISA on the maximum amount of benefits payable under
the Retirement Plan, over
(b) the benefit payable under the Retirement Plan, computed otherwise
as above but limited by any provision incorporating or reflecting such Code or
ERISA limitations.
The supplemental retirement benefit otherwise payable hereunder as
related to periods of employment prior to September 1, 1994 shall be payable to
or in respect of a participant only if, or to the extent that, participant
during such period or periods made the contributions under this Plan required by
Article V hereof.
The supplemental retirement benefit shall be payable at the same time
and otherwise in accordance with all the terms and conditions applicable to the
participant's benefit under the Retirement Plan except that the participant may
make different elections under this Plan with respect to the forms in which
payment is to be received than he or she makes under the Retirement Plan. The
right of the participant to make different elections under this Plan than under
the Retirement Plan is subject to the qualification that no election to take a
single or partial lump sum under this plan shall be effective until sixty days
after the election is made. Any actuarial or other adjustments of the amounts
payable to an individual under this Plan shall be made on the same basis as such
adjustments are or would have been made on the corresponding benefit under the
Retirement Plan.
V. Contributions
For any period of employment prior to September 1, 1994 to be counted
with respect to a participant's entitlement under this Plan the participant must
have made contributions to the Corporation with respect to such period equal to
3% of that portion, if any, of his or her basic salary and cash payments to him
or her under the IC Plan that, under Section 401(a) (17) of the Code, were not,
or would not have been, permitted to be taken into account under the
Curtiss-Wright Corporation Contributory Retirement Plan. For purposes of the
preceding sentence the term "basic salary" shall have the meaning set forth in
subparagraph 4(e) and the last unnumbered subparagraph of paragraph 4 of Article
VIII of the Curtiss-Wright Corporation Contributory Retirement Plan as in effect
on December 31, 1988. Amounts equivalent to interest shall accrue on a
participant's contributions under this Plan at the same rate, to the same extent
and under the same circumstances (except as provided in paragraph B of Article
VI of this Plan) as shall apply to interest on the participant's contributions
under the Curtiss-Wright Corporation Contributory Retirement Plan.
VI. Miscellaneous
A. This Plan may be amended at any time from time to time or terminated
at any time by the Board of Directors of the Corporation, provided however, that
no amendment or termination shall reduce or eliminate any benefit to the extent
that the right thereto shall have accrued prior to such amendment or
termination. In the event of a termination or an amendment that would reduce or
eliminate any such accrued benefit then or thereafter payable pursuant to this
Plan the Corporation shall remain liable for the payment of the accrued benefits
at substantially the same time and under substantially the same conditions as,
the accrued benefits that would have been payable under this Plan.
-18-
<PAGE>
Page 3 of 3
B. All benefits provided for in this Plan shall be paid in cash from
the general funds of the Corporation, without interest (except as provided in
the last sentence of Article V of this Plan). No special or separate fund shall
be established and no segregation of assets shall be made in connection with
such benefits, the contributions by participants under the Curtiss-Wright
Corporation Contributory Retirement Plan or amounts equivalent to interest.
However, the Corporation may at its election establish a bookkeeping reserve in
respect of its obligations hereunder. Nothing contained in this Plan, and no
action taken pursuant to its provisions, shall create or be construed to create
a trust of any kind, or a fiduciary relationship, between the Corporation and
any participant in this Plan or any other person. The rights that any
participant in this Plan or any other person shall have to receive benefits
hereunder shall be limited to the rights of an unsecured general creditor of the
Corporation.
C. The benefits payable under this Plan shall not be subject in any
manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either
voluntary or involuntary; and any attempt to anticipate, alienate, sell,
transfer, assign, pledge, encumber, charge or otherwise dispose of any right to
benefits payable hereunder shall be null and void and without effect.
D. Any reference in this Plan to Sections 401(a) (17) or 415 of the
Code or to ERISA shall be deemed to apply to the same as they may from time to
time be amended or supplemented.
E. Nothing in this Plan shall be construed as conferring upon any
person any right to be continued as an employee or as affecting the right to
discharge an employee.
F. This Plan shall be construed, administered and enforced according
to the laws of the State of New Jersey.
-19-
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,652
<SECURITIES> 58,263
<RECEIVABLES> 47,692
<ALLOWANCES> 1,469
<INVENTORY> 46,395
<CURRENT-ASSETS> 166,791
<PP&E> 214,902
<DEPRECIATION> 150,081
<TOTAL-ASSETS> 278,504
<CURRENT-LIABILITIES> 46,339
<BONDS> 10,347
0
0
<COMMON> 10,000
<OTHER-SE> 181,163
<TOTAL-LIABILITY-AND-EQUITY> 278,504
<SALES> 107,560
<TOTAL-REVENUES> 111,149
<CGS> 71,791
<TOTAL-COSTS> 92,300
<OTHER-EXPENSES> 251
<LOSS-PROVISION> 100
<INTEREST-EXPENSE> 189
<INCOME-PRETAX> 18,409
<INCOME-TAX> 6,404
<INCOME-CONTINUING> 12,005
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,005
<EPS-PRIMARY> 2.36
<EPS-DILUTED> 2.36
</TABLE>
