Woodward Reports First Quarter Fiscal Year 2025 Results

~Results in Line with Expectations, on Track to Deliver Full-Year Guidance~ FORT COLLINS, Colo., Feb. 03, 2025 (GLOBE NEWSWIRE) -- Woodward, Inc. (NASDAQ: WWD) today reported financial results for its first quarter of fiscal year 2025. 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. All references to years are references to the Company’s fiscal year unless otherwise stated. First Quarter Overview First Quarter 2025Net sales$773M, -2%Net earnings$87M, -3%Adjusted net earnings¹$83M, -8%Earnings per share (EPS)$1.42, -3%Adjusted EPS¹$1.35, -7%Cash from operations$35M, -26%Free cash flow¹$1M, -81% “We’re pleased with our strong start to 2025, as our first quarter results were in line with our expectations. Our Aerospace segment performed well with growth in both sales and margin despite a pause in deliveries for some Boeing product lines and a reduced delivery rate in others,” said Chip Blankenship, Chairman and Chief Executive Officer. “High aircraft utilization continued to drive both commercial and defense aftermarket demand. As anticipated, increased smart defense demand contributed to strong sales in the quarter. In Industrial, broad-based strength in power generation, oil & gas, and marine transportation was offset by an expected decline in sales related to China on-highway natural gas trucks. “First quarter results reflect the effective execution of our strategy, reinforcing our confidence in our ability to achieve our full-year guidance. We remain committed to operational excellence, innovation and delivering profitable growth to build a stronger, more focused Woodward.” First Quarter Fiscal Year 2025 Company Results Total Company Results Three Months Ended December 31,Dollars in millions, except per share amounts 2024 2023 Year over YearIncome Statement Total Sales $773 $787 -2%Net Earnings 87 90 -3%Adjusted Net Earnings 83 90 -8%EPS $1.42 $1.46 -3%Adjusted EPS $1.35 $1.45 -7%EBIT 113 120 -6%Adjusted EBIT¹ 107 119 -10%Effective Tax Rate 14.5% 17.9% -340bpsAdjusted Effective Tax Rate¹ 14.0% 17.7% -370bps Cash Flow and Financial Position Cash from operating activities $35 $47 -26%Free cash flow 1 5 -81% Dividends Paid $15 $13 12%Share Repurchases 35 - 100%Total Debt 902 719 25%EBITDA Leverage 1.5x 1.3x Segment Results Aerospace Three Months Ended December 31,Dollars in millions 2024 2023 Year over YearCommercial OEM $154 $171 -10%Commercial Aftermarket 164 138 19%Defense OEM 113 93 21%Defense Aftermarket 63 58 8% Revenue 494 461 7%Segment Earnings 95 79 20%Segment Margin % 19.2% 17.2% 200bps The increase in Aerospace segment earnings in the first quarter was primarily a result of price realization, partially offset by inflation, unfavorable mix, and lower volumes. Industrial Three Months Ended December 31,Dollars in millions 2024 2023 Year over YearTransportation $117 $174 -33%Power generation 105 98 7%Oil and gas 57 53 7% Revenue 279 326 -15%Segment Earnings 40 67 -40%Segment Margin % 14.4% 20.5% -610bps The decrease in Industrial segment earnings in the first quarter was primarily a result of lower volume and unfavorable mix, partially offset by price realization and favorable foreign currency exchange rates. Nonsegment Three Months Ended December 31,Dollars in millions 2024 2023 Year over YearNonsegment Expense $(22) $(26) -16%Adjusted Nonsegment Expenses (28) (27) 4% Fiscal Year 2025 Guidance Woodward reaffirms its 2025 guidance with the exception of adjusted effective tax rate and adjusted earnings per share. Based on the favorable tax rate in the first quarter, the adjusted effective tax rate is now expected to be approximately 19 percent. As a result, the Company narrowed its adjusted earnings per share range to $5.85-6.25. Woodward, Inc. and SubsidiariesRevised Guidance(In millions, except per share amount and percentages) Prior Revised FY25 Guidance issued on FY25 Guidance issued on November 25, 2024 February 3, 2025Total Company Sales $3,300 - $3,500 No changeAdjusted Effective Tax Rate ~20% ~19%Free Cash Flow $350 - $400 No changeCapital Expenditures ~$115 No changeShares ~61.5 No changeAdjusted EPS $5.75 - $6.25 $5.85 - $6.25 Segment Data Aerospace Sales Growth Up 6% to 13% No changeSegment Earnings (% of Sales) 20% - 21% No changeIndustrial Sales Growth Down 7% to 11% No changeSegment Earnings (% of Sales) 13% - 14% No change Conference Call Woodward will hold an investor conference call at 5:00 p.m. ET, February 3, 2025, to provide an overview of the financial performance for its first quarter of fiscal year 2025 ending December 31, 2024, business highlights, and guidance for fiscal 2025. 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 (domestic) or 1-646-307-1963 (international). Participants should call prior to the start time to allow for registration; the Conference ID is 4675940. The call and presentation will be available on the website by selecting “Investors/Events & Presentations” from the menu and will remain accessible on the company’s website for one year. 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. Our purpose is to design and deliver energy control solutions our partners count on to power a clean future. 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, our focus on and commitment to growth, operational excellence and innovation, including whether such focus ultimately leads to profitable growth and long-term term success, and statements regarding our business, expectations and guidance for fiscal year 2025, including our guidance for sales, segment sales as compared to the prior fiscal year, adjusted earnings per share, segment earnings margin, adjusted effective tax rate, free cash flow, capital expenditures, and diluted weighted average shares outstanding, as well as our assumptions regarding our guidance and our progress toward achieving it, and anticipated trends in our business and markets. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to: (1) global economic uncertainty and instability, including in the financial markets that affect Woodward, its customers, and its supply chain; (2) risks related to constraints and disruptions in the global supply chain and labor markets; (3) Woodward’s long sales cycle; (4) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (5) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (6) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales; (7) changes and consolidations in the aerospace market; (8) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (9) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (10) Woodward’s ability to protect its intellectual property rights and avoid infringing the intellectual property rights of others; (11) changes in the estimates of fair value of reporting units or of long-lived assets; (12) environmental risks; (13) Woodward’s continued access to a stable workforce and favorable labor relations with its employees; (14) Woodward’s ability to manage various regulatory and legal matters; (15) risks from operating internationally; (16) cybersecurity and other technological risks; and other risk factors and risks described in Woodward's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended September 30, 2024, as well as its Quarterly Report on Form 10-Q, which we expect to file shortly, and other risks described in Woodward’s filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and Woodward assumes no obligation to update such statements, except as required by applicable law. Woodward, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF EARNINGS(Unaudited – in thousands, except per share amounts) Three Months Ended December 31, 2024 2023Net sales $772,725 $786,730 Costs and expenses: Cost of goods sold 583,091 582,381 Selling, general, and administrative expenses 69,696 74,511 Research and development costs 30,207 30,794 Interest expense 12,341 11,436 Interest income (1,377) (1,473)Other (income) expense, net (23,087) (20,639)Total costs and expenses 670,871 677,010 Earnings before income taxes 101,854 109,720 Income taxes 14,763 19,676 Net earnings $87,091 $90,044 Earnings per share amounts: Basic earnings per share $1.47 $1.50 Diluted earnings per share $1.42 $1.46 Weighted average common shares outstanding: Basic 59,216 60,021 Diluted 61,141 61,846 Cash dividends paid per share $0.25 $0.22 Woodward, Inc. and SubsidiariesCONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited – in thousands) December 31, September 30, 2024 2024Assets Current assets: Cash and cash equivalents $283,726 $282,270 Accounts receivable 692,599 770,066 Inventories 632,002 609,092 Assets held for sale 32,047 - Income taxes receivable 16,268 22,016 Other current assets 67,954 60,167 Total current assets 1,724,596 1,743,611 Property, plant, and equipment, net 925,471 940,715 Goodwill 781,928 806,643 Intangible assets, net 404,417 440,419 Deferred income tax assets 87,488 84,392 Other assets 357,482 353,135 Total assets $4,281,382 $4,368,915 Liabilities and stockholders’ equity Current liabilities: Short-term debt $258,000 $217,000 Current portion of long-term debt 160,975 85,719 Accounts payable 224,035 287,457 Income taxes payable 38,742 40,692 Liabilities held for sale 4,322 - Accrued liabilities 228,748 292,642 Total current liabilities 914,822 923,510 Long-term debt, less current portion 483,199 569,751 Deferred income tax liabilities 115,984 121,858 Other liabilities 558,956 577,380 Total liabilities 2,072,961 2,192,499 Stockholders’ equity 2,208,421 2,176,416 Total liabilities and stockholders’ equity $4,281,382 $4,368,915 Woodward, Inc. and SubsidiariesCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Net cash provided by operating activities $34,516 $46,789 Cash flows from investing activities: Payments for purchase of property, plant, and equipment (33,574) (41,812)Proceeds from sale of assets and short-term investments 36 36 Proceeds from business divestiture 1,438 - Net cash used in investing activities (32,100) (41,776) Cash flows from financing activities: Cash dividends paid (14,781) (13,209)Proceeds from sales of treasury stock 28,876 15,267 Payments for repurchases of common stock (35,473) - Borrowings on revolving lines of credit and short-term borrowings 668,300 728,600 Payments on revolving lines of credit and short-term borrowings (627,300) (663,500)Payments of long-term debt and finance lease obligations (236) (75,249)Net cash provided by (used in) financing activities 19,386 (8,091)Effect of exchange rate changes on cash and cash equivalents (20,346) 9,979 Net change in cash and cash equivalents 1,456 6,901 Cash and cash equivalents at beginning of year 282,270 137,447 Cash and cash equivalents at end of period $283,726 $144,348 Woodward, Inc. and SubsidiariesSEGMENT NET SALES AND NET EARNINGS(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Net sales: Aerospace $493,882 $460,756 Industrial 278,843 325,974 Total consolidated net sales $772,725 $786,730 Segment earnings*: Aerospace $94,725 $79,002 As a percent of segment net sales 19.2% 17.2%Industrial 40,197 66,881 As a percent of segment net sales 14.4% 20.5%Total segment earnings 134,922 145,883 Nonsegment expenses (22,104) (26,200)EBIT 112,818 119,683 Interest expense, net (10,964) (9,963)Consolidated earnings before income taxes $101,854 $109,720 *This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes. Payments for property, plant and equipment $33,574 $41,812 Depreciation expense $20,962 $20,226 Woodward, Inc. and Subsidiaries RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS1 (Unaudited – in thousands, except per share amounts) Three Months Ended December 31, 2024 2023 Net Earnings Earnings Per Share Net Earnings Earnings Per ShareNet earnings (U.S. GAAP) $87,091 $1.42 $90,044 $1.46 Non-U.S. GAAP adjustments: Product rationalizationa (9,361) (0.15) - - Business development activitiesb 3,518 0.06 4,238 0.07 Non-recurring gain related to a previous acquisitiona - - (4,803) (0.09)Tax effect of Non-U.S. GAAP net earnings adjustments 1,319 0.02 332 0.01 Total non-U.S. GAAP adjustments (4,524) (0.07) (233) (0.01)Adjusted net earnings (Non-U.S. GAAP) $82,567 $1.35 $89,811 $1.45 a. Presented in the line item "Other (income) expense, net" in Woodward's Condensed Consolidated Statement of Earnings.b. Presented in item "Selling, general and administrative" expenses in Woodward's Condensed Consolidated Statement of Earnings. Woodward, Inc. and SubsidiariesRECONCILIATION OF INCOME TAX EXPENSE TO ADJUSTED INCOME TAX EXPENSE¹(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Income tax expense (U.S. GAAP) $14,763 $19,676 Tax effect of Non-U.S. GAAP net income adjustments (1,319) (332)Adjusted income tax expense (Non-U.S. GAAP) $13,444 $19,344 Adjusted effective tax rate (Non-U.S. GAAP) 14.0% 17.7% Woodward, Inc. and SubsidiariesRECONCILIATION OF NET EARNINGS TO EBIT¹AND ADJUSTED EBIT¹(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Net earnings (U.S. GAAP) $87,091 $90,044 Income tax expense 14,763 19,676 Interest expense 12,341 11,436 Interest income (1,377) (1,473)EBIT (Non-U.S. GAAP) 112,818 119,683 Total non-U.S. GAAP adjustments* (5,843) (565)Adjusted EBIT (Non-U.S. GAAP) $106,975 $119,118 *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 SubsidiariesRECONCILIATION OF NET EARNINGS TO EBITDA1 AND ADJUSTED EBITDA1(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Net earnings (U.S. GAAP) $87,091 $90,044 Income tax expense 14,763 19,676 Interest expense 12,341 11,436 Interest income (1,377) (1,473)Amortization of intangible assets 6,914 8,599 Depreciation expense 20,962 20,226 EBITDA (Non-U.S. GAAP) 140,694 148,508 Total non-U.S. GAAP adjustments* (5,843) (565)Adjusted EBITDA (Non-U.S. GAAP) $134,851 $147,943 *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 SubsidiariesRECONCILIATION OF NONSEGMENT EXPENSES TO ADJUSTED NONSEGMENT EXPENSES¹(Unaudited – in thousands) Three-Months Ended December 31, 2024 2023Nonsegment expenses (U.S. GAAP) $(22,104) $(26,200)Product rationalization (9,361) - Business development activities 3,518 4,238 Non-recurring gain related to a previous acquisition - (4,803)Adjusted nonsegment expenses (Non-U.S. GAAP) $(27,947) $(26,765) Woodward, Inc. and SubsidiariesRECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW¹(Unaudited – in thousands) Three Months Ended December 31, 2024 2023Net cash provided by operating activities (U.S. GAAP) $34,516 $46,789 Payments for property, plant, and equipment (33,574) (41,812)Free cash flow (Non-U.S. GAAP) $942 $4,977 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, and (iii) gains related to product rationalization activities. The product rationalization adjustment pertains to gains related to the elimination of certain product lines. 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. EBIT (earnings before interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), 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, 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, 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 do not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Woodward’s calculations of EBIT, EBITDA, adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted effective tax rate, adjusted nonsegment expenses, and 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, LinkedIn page, Facebook page, and 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

Woodward Reports First Quarter Fiscal Year 2025 Results

FAQ

Why Neutral?

How important is it?

Why Short Term?

Related Companies

Related News