Woodward Reports Second Quarter Fiscal Year 2025 Results

~Results in Line with Expectations, on Track to Deliver Full-Year Guidance~ FORT COLLINS, Colo., April 28, 2025 (GLOBE NEWSWIRE) -- Woodward, Inc. (NASDAQ: WWD) today reported financial results for its second 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 references to years are references to the Company’s fiscal year unless otherwise stated. All comparisons are made to the same period of the prior year unless otherwise stated. Second Quarter Overview Second Quarter 2025 Year to Date – Fiscal Year 2025Net sales$884M, 6% $1,656M, 2%Net earnings$109M, 12% $196M, 5%Adjusted net earnings1$103M, 3% $186M, -3%Earnings per share (EPS)$1.78, 14% $3.20, 6%Adjusted EPS1$1.69, 4% $3.04, -1%Cash from operations$78M, -20% $112M, -22%Free cash flow1$59M, -28% $60M, -31% "Our strong second quarter results were in line with our expectations, reflecting the dedication of our members in a volatile environment,” said Chip Blankenship, Chairman and Chief Executive Officer. “Aerospace segment growth was driven by continued strong demand for smart defense, and robust commercial aftermarket activity fueled by high utilization of legacy aircraft. This was partially offset by lower commercial OEM and defense aftermarket activity. Our Industrial business delivered double-digit sales growth in power generation, oil and gas, and marine transportation combined. This was offset by an anticipated decline in China on-highway natural gas truck sales.” “Based on what we know today, we are confident in Woodward’s ability to manage the announced tariff levels and current operating environment in the second half of the fiscal year. We are raising the low end of our sales and earnings guidance and reaffirming the other elements of our full-year outlook. Our long-term value proposition remains intact, and we are committed to achieving sustainable growth and enhancing shareholder value.” Second Quarter Fiscal Year 2025 Company Results Total Company Results Three Months Ended March 31 Six Months Ended March 31 Dollars in millions, except per share amounts 2025 2024 Year over Year 2025 2024 Year over Year Income Statement Total Sales $884 $835 6% $1,656 $1,622 2%Net Earnings 109 98 12% 196 188 5%Adjusted Net Earnings 103 101 3% 186 191 -3%EPS $1.78 $1.56 14% $3.20 $3.02 6%Adjusted EPS $1.69 $1.62 4% $3.04 $3.07 -1%EBIT1 144 131 10% 257 251 2%Adjusted EBIT1 136 135 1% 243 254 -4%Effective Tax Rate 18.1% 19.1% -100bps 16.5% 18.6% -210bpsAdjusted Effective Tax Rate1 17.7% 19.3% -160bps 16.1% 18.6% -250bps Cash Flow and Financial Position Cash from Operating Activities $78 $97 -20% $112 $144 -22%Capital Expenditures 18 14 27% 52 56 -8%Free Cash Flow 59 83 -28% 60 88 -31% Dividends Paid 17 15 10% 31 28 11%Share Repurchases 44 - 100% 79 - 100%Total Debt 912 791 15%EBITDA1 Leverage 1.5x 1.2x Segment Results Aerospace Three Months Ended March 31 Six Months Ended March 31 Dollars in millions 2025 2024 Year over Year 2025 2024 Year over Year Commercial OEM $167 $184 -9% $322 $355 -9%Commercial Aftermarket 202 164 23% 366 301 21%Defense OEM 138 91 52% 251 184 36%Defense Aftermarket 54 59 -8% 118 118 0% Revenue 562 498 13% 1,056 958 10%Segment Earnings 125 98 27% 219 177 24%Segment Margin % 22.2% 19.8% 240bps 20.8% 18.5% 230bps The increase in Aerospace segment earnings in the second quarter was primarily a result of price realization and volume, partially offset by inflation and unfavorable mix. The increase in Aerospace segment earnings for the six months ended March 31, 2025, was primarily a result of price realization, partially offset by inflation and unfavorable mix. Industrial Three Months Ended March 31 Six Months Ended March 31 Dollars in millions 2025 2024 Year over Year 2025 2024 Year over Year Transportation $142 $174 -18% $258 $348 -26%Power generation 111 107 4% 216 205 6%Oil and gas 69 57 21% 126 111 14% Revenue 322 338 -5% 601 664 -10%Segment Earnings 46 65 -30% 86 132 -35%Segment Margin % 14.3% 19.3% -500bps 14.3% 19.9% -560bps The decrease in Industrial segment earnings in the second quarter was primarily a result of lower China on-highway volume and unfavorable mix, partially offset by price realization. The decrease in Industrial segment earnings in the six months ended March 31, 2025, was primarily a result of lower China on-highway volume and unfavorable mix, partially offset by price realization. Nonsegment Three Months Ended March 31 Six Months Ended March 31 Dollars in millions 2025 2024 Year over Year 2025 2024 Year over Year Nonsegment Expense $(27) $(33) -19% $(49) $(59) -17%Adjusted Nonsegment Expenses1 (34) (29) 20% (62) (55) 12% Fiscal Year 2025 Guidance Woodward is raising the low end of its sales and Adjusted EPS guidance while reaffirming the other elements of its full-year outlook. This updated guidance reflects strong year-to-date performance and the expected impact of announced tariffs. The Company’s revised guidance does not incorporate potential effects from further escalation of announced tariff levels, significant changes in customer demand, or recession in the U.S. or globally. For the fiscal year 2025, Woodward now expects the following: Woodward, Inc. and SubsidiariesRevised Guidance(In millions, except per share amount and percentages) Prior Revised FY25 Guidance issued on FY25 Guidance issued on February 3, 2025 April 28, 2025 Total Company Sales $3,300 - $3,500 $3,375 - $3,500 Adjusted Effective Tax Rate ~19% No Change Free Cash Flow $350 - $400 No change Capital Expenditures ~$115 No change Shares ~61.5 No change Adjusted EPS $5.85 - $6.25 $5.95 - $6.25 Segment Data Aerospace Sales Growth Up 6% to 13% Up 8% to 13% Segment Earnings (% of Sales) 20% - 21% No change Industrial Sales Growth Down 7% to 11% Down 7% to 9% Segment Earnings (% of Sales) 13% - 14% No change Conference Call Woodward will hold an investor conference call at 5:00 p.m. ET, April 28, 2025, to provide an overview of the financial performance for its second quarter of fiscal year 2025 ending March 31, 2025, 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, the Company’s ability to manage tariffs and the current operating environment; our long-term value proposition and ability to achieve sustainable growth and enhance shareholder value; 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 and expectations regarding our guidance and the factors that may impact guidance, 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 a potential global recession and the impact on customer demand; (2) changes in or uncertainty with respect to global trade and economic policy, including tariff levels and other retaliatory measures; (3) risks related to constraints and disruptions in the global supply chain and labor markets; (4) Woodward’s long sales cycle; (5) risks related to Woodward’s concentration of revenue among a relatively small number of customers; (6) Woodward’s ability to implement and realize the intended effects of any restructuring efforts; (67) Woodward’s ability to successfully manage competitive factors including expenses and fluctuations in sales; (8) changes and consolidations in the aerospace market; (9) Woodward’s financial obligations including debt obligations and tax expenses and exposures; (10) risks related to Woodward’s U.S. government contracting activities including potential changes in government spending patterns; (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, 2024, any subsequently filed Quarterly Report on Form 10-Q, as well as its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which we expect to file shortly, and other risks described in Woodward’s filings with the Securities and Exchange Commission. The forward-looking statements contained in this press release are made as of the date hereof and Woodward assumes no obligation to update such statements, except as required by applicable law. Woodward, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited - in thousands, except per share amounts) Three Months EndedMarch 31, Six Months EndedMarch 31, 2025 2024 2025 2024 Net sales$883,629 $835,343 $1,656,354 $1,622,073 Costs and expenses: Cost of goods sold 643,530 600,954 1,226,621 1,183,335 Selling, general, and administrative expenses 83,842 81,447 153,538 155,958 Research and development costs 37,230 36,465 67,437 67,259 Interest expense 11,889 11,530 24,230 22,966 Interest income (1,021) (1,293) (2,398) (2,766)Other (income) expense, net (24,804) (14,384) (47,891) (35,023)Total costs and expenses 750,666 714,719 1,421,537 1,391,729 Earnings before income taxes 132,963 120,624 234,817 230,344 Income taxes 24,014 23,068 38,777 42,744 Net earnings$108,949 $97,556 $196,040 $187,600 Earnings per share amounts: Basic earnings per share$1.83 $1.61 $3.30 $3.12 Diluted earnings per share$1.78 $1.56 $3.20 $3.02 Weighted average common shares outstanding: Basic 59,432 60,427 59,323 60,223 Diluted 61,344 62,365 61,258 62,106 Cash dividends paid per share$0.28 $0.25 $0.53 $0.47 Woodward, Inc. and Subsidiaries CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited - in thousands) March 31, September 30, 2025 2024 Assets Current assets: Cash and cash equivalents$364,141 $282,270 Accounts receivable 831,500 770,066 Inventories 634,508 609,092 Income taxes receivable 21,280 22,016 Other current assets 60,508 60,167 Total current assets 1,911,937 1,743,611 Property, plant, and equipment, net 929,357 940,715 Goodwill 791,989 806,643 Intangible assets, net 412,186 440,419 Deferred income tax assets 85,631 84,392 Other assets 362,369 353,135 Total assets$4,493,469 $4,368,915 Liabilities and stockholders’ equity Current liabilities: Short-term debt$261,100 $217,000 Current portion of long-term debt 160,989 85,719 Accounts payable 269,318 287,457 Income taxes payable 46,025 40,692 Accrued liabilities 242,285 292,642 Total current liabilities 979,717 923,510 Long-term debt, less current portion 489,821 569,751 Deferred income tax liabilities 117,984 121,858 Other liabilities 568,440 577,380 Total liabilities 2,155,962 2,192,499 Stockholders’ equity 2,337,507 2,176,416 Total liabilities and stockholders’ equity$4,493,469 $4,368,915 Woodward, Inc. and Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - in thousands) Six Months Ended March 31, 2025 2024 Net cash provided by operating activities$112,341 $144,118 Cash flows from investing activities: Payments for purchase of property, plant, and equipment (51,990) (56,301)Proceeds from sale of assets 33 51 Proceeds from business divestitures 44,896 600 Payments for short-term investments - (3,723)Proceeds from sales of short-term investments 2,923 9,732 Net cash used in investing activities (4,138) (49,641) Cash flows from financing activities: Cash dividends paid (31,453) (28,327)Proceeds from sales of treasury stock 49,717 43,087 Payments for repurchases of common stock (79,493) - Borrowings on revolving lines of credit and short-term borrowings 1,350,200 1,539,100 Payments on revolving lines of credit and short-term borrowings (1,306,100) (1,397,800)Payments of long-term debt and finance lease obligations (473) (75,472)Net cash (used in) provided by financing activities (17,602) 80,588 Effect of exchange rate changes on cash and cash equivalents (8,730) 4,420 Net change in cash and cash equivalents 81,871 179,485 Cash and cash equivalents at beginning of year 282,270 137,447 Cash and cash equivalents at end of period$364,141 $316,932 Woodward, Inc. and Subsidiaries SEGMENT NET SALES AND NET EARNINGS (Unaudited - in thousands) Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Net sales: Aerospace$561,729 $497,512 $1,055,611 $958,268 Industrial 321,900 337,831 600,743 663,805 Total consolidated net sales$883,629 $835,343 $1,656,354 $1,622,073 Segment earnings*: Aerospace$124,616 $98,451 $219,341 $177,453 As a percent of segment net sales 22.2% 19.8% 20.8% 18.5%Industrial 45,967 65,244 86,164 132,125 As a percent of segment net sales 14.3% 19.3% 14.3% 19.9%Total segment earnings 170,583 163,695 305,505 309,578 Nonsegment expenses (26,752) (32,834) (48,856) (59,034)EBIT 143,831 130,861 256,649 250,544 Interest expense, net (10,868) (10,237) (21,832) (20,200)Consolidated earnings before income taxes$132,963 $120,624 $234,817 $230,344 *This schedule reconciles segment earnings, which exclude certain costs, to consolidated earnings before taxes. Payments for property, plant and equipment$18,416 $14,489 $51,990 $56,301 Depreciation expense$20,794 $20,607 $41,756 $40,833 Woodward, Inc. and Subsidiaries RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS1 (Unaudited - in thousands, except per share amounts) Three Months Ended March 31, 2025 2024 Net Earnings Earnings Per Share Net Earnings Earnings Per Share Net earnings (U.S. GAAP)$108,949 $1.78 $97,556 $1.56 Non-U.S. GAAP adjustments: Product rationalizationa (11,163) (0.18) - - Business development activitiesb 3,793 0.06 1,664 0.03 Certain non-restructuring separation costsb - - 2,666 0.04 Tax effect of Non-U.S. GAAP net earnings adjustments 1,811 0.03 (1,061) (0.01)Total non-U.S. GAAP adjustments (5,559) (0.09) 3,269 0.06 Adjusted net earnings (Non-U.S. GAAP)$103,390 $1.69 $100,825 $1.62 Presented in the line item "Other (income) expense, net" in Woodward's Condensed Consolidated Statement of Earnings.Presented in item "Selling, general and administrative" expenses in Woodward's Condensed Consolidated Statement of Earnings. Woodward, Inc. and Subsidiaries RECONCILIATION OF NET EARNINGS TO ADJUSTED NET EARNINGS1 (Unaudited - in thousands, except per share amounts) Six Months Ended March 31, 2025 2024 Net Earnings Earnings Per Share Net Earnings Earnings Per Share Net earnings (U.S. GAAP)$196,040 $3.20 $187,600 $3.02 Non-U.S. GAAP adjustments: Product rationalizationa (20,524) (0.33) - - Non-recurring gain related to a previous acquisitiona - - (4,803) (0.08)Business development activitiesb 7,310 0.12 5,902 0.10 Certain non-restructuring separation costsb - - 2,666 0.04 Tax effect of Non-U.S. GAAP net earnings adjustments 3,130 0.05 (729) (0.01)Total non-U.S. GAAP adjustments (10,084) (0.16) 3,036 0.05 Adjusted net earnings (Non-U.S. GAAP)$185,956 $3.04 $190,636 $3.07 Presented in the line item "Other (income) expense, net" in Woodward's Condensed Consolidated Statement of Earnings.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 March 31, Six Months Ended March 31, 2025 2024 2025 2024 Income tax expense (U.S. GAAP)$24,014 $23,068 $38,777 $42,744 Tax effect of Non-U.S. GAAP net income adjustments (1,811) 1,061 (3,130) 729 Adjusted income tax expense (Non-U.S. GAAP)$22,203 $24,129 $35,647 $43,473 Adjusted effective tax rate (Non-U.S. GAAP) 17.7% 19.3% 16.1% 18.6% Woodward, Inc. and SubsidiariesRECONCILIATION OF NET EARNINGS TO EBIT1 AND ADJUSTED EBIT1(Unaudited - in thousands) Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Net earnings (U.S. GAAP)$108,949 $97,556 $196,040 $187,600 Income tax expense 24,014 23,068 38,777 42,744 Interest expense 11,889 11,530 24,230 22,966 Interest income (1,021) (1,293) (2,398) (2,766)EBIT (Non-U.S. GAAP) 143,831 130,861 256,649 250,544 Total non-U.S. GAAP adjustments* (7,370) 4,330 (13,214) 3,765 Adjusted EBIT (Non-U.S. GAAP)$136,461 $135,191 $243,435 $254,309 *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 EBITDA1AND ADJUSTED EBITDA1(Unaudited - in thousands) Three Months Ended March 31, Six Months Ended March 31, 2025 2024 2025 2024 Net earnings (U.S. GAAP)$108,949 $97,556 $196,040 $187,600 Income tax expense 24,014 23,068 38,777 42,744 Interest expense 11,889 11,530 24,230 22,966 Interest income (1,021) (1,293) (2,398) (2,766)Amortization of intangible assets 6,772 8,618 13,686 17,217 Depreciation expense 20,794 20,607 41,756 40,833 EBITDA (Non-U.S. GAAP) 171,397 160,086 312,091 308,594 Total non-U.S. GAAP adjustments* (7,370) 4,330 (13,214) 3,765 Adjusted EBITDA (Non-U.S. GAAP)$164,027 $164,416 $298,877 $312,359 *See Reconciliation of Net Earnings to Adjusted Net Earnings1table 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 March 31, Six Months Ended March 31, 2025 2024 2025 2024 Nonsegment expenses (U.S. GAAP)$26,752 $32,834 $48,856 $59,034 Product rationalization 11,163 - 20,524 - Business development activities (3,793) (1,664) (7,310) (5,902)Non-recurring gain related to a previous acquisition - - - 4,803 Certain non-recurring separation costs - (2,666) - (2,666)Adjusted nonsegment expenses (Non-U.S. GAAP)$34,122 $28,504 $62,070 $55,269 Woodward, Inc. and Subsidiaries RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW1 (Unaudited - in thousands) Six Months Ended March 31, 2025 2024 Net cash provided by operating activities (U.S. GAAP)$112,341 $144,118 Payments for property, plant, and equipment (51,990) (56,301)Free cash flow (Non-U.S. GAAP)$60,351 $87,817 1Adjusted and Non-U.S. GAAP Financial Measures: Adjusted net earnings, adjusted earnings per share, adjusted EBIT, adjusted EBITDA, adjusted income tax expense, adjusted effective tax rate, and adjusted nonsegment expenses exclude, as applicable (i) product rationalization, (ii) a non-recurring gain related to a previous acquisition, (iii) costs related to business development activities, and (iv) certain non-restructuring separation costs. 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. Guidance with respect to non-U.S. GAAP measures as provided in this release excludes, as applicable, (i) product rationalization, and (ii) business development activities. 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 income tax expense, 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, 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 does 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 Second Quarter Fiscal Year 2025 Results

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