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 MARCH 31, 2001 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: 10,051,969 shares (as of April 12, 2001) Page 1 of 18
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 - 11 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 12 - 15 Item 3 - Quantitative and Qualitative Disclosures about Market Risk 16 Forward-Looking Statements 16 PART II - OTHER INFORMATION Item 4 - Submission of Matters to a Vote of Security Holders 17 Item 6 - Exhibits and Reports on Form 8-K 18
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (UNAUDITED) March 31, December 31, 2001 2000 ----------- ---------- Assets Current Assets: Cash and cash equivalents $ 12,635 $ 8,692 Short-term investments 59,578 62,766 Receivables, net 65,290 67,815 Inventories, net 51,840 50,002 Deferred income taxes 9,431 9,378 Other current assets 4,186 3,419 ---------- ---------- Total current assets 202,960 202,072 ---------- ---------- Property, plant and equipment, at cost 249,799 246,896 Less: accumulated depreciation 158,005 156,443 ---------- ---------- Property, plant and equipment, net 91,794 90,453 Prepaid pension costs 62,106 59,765 Goodwill 46,704 47,543 Other assets 9,233 9,583 ---------- ---------- Total Assets $412,797 $409,416 ========== ========== Liabilities Current Liabilities: Current portion of long-term debt $ 1,300 $ 5,347 Dividends payable 1,302 0 Account payable 13,747 13,766 Accrued expenses 17,969 19,389 Income taxes payable 4,393 4,157 Other current liabilities 9,327 9,634 ---------- ---------- Total current liabilities 48,038 52,293 Long-term debt 22,847 24,730 Deferred income taxes 22,996 21,689 Other liabilities 22,368 20,480 ---------- ---------- Total Liabilities 116,249 119,192 ---------- ----------- Stockholders' Equity Common stock, $1 par value 15,000 15,000 Capital surplus 50,682 51,506 Retained earnings 419,783 411,866 Unearned portion of restricted stock (18) (22) Accumulated other comprehensive income (7,852) (5,626) ---------- ----------- 477,595 472,724 Less: cost of treasury stock 181,047 182,500 ---------- ---------- Total Stockholders' Equity 296,548 290,224 ---------- ---------- Total Liabilities and Stockholders' Equity $412,797 $409,416 ========== ========== See notes to consolidated financial statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (In thousands except per share data) Three Months Ended March 31, 2001 2000 ---------- ---------- Net sales $79,917 $82,237 Cost of sales 49,906 53,308 ---------- ---------- Gross profit 30,011 28,929 Research & development expenses 897 1,388 Seling expenses 4,593 4,756 General and administrative expenses 13,338 10,579 Environmental remediation and administrative recoveries, net of expenses (82) 117 ---------- ---------- Operating income 11,265 12,089 Investment income, net 843 505 Rental income, net 743 1,160 Pension income, net 2,344 1,744 Other expenses, net (167) (32) Interest expense (249) (376) --------- ---------- Earnings before income taxes 14,779 15,090 Provision for income taxes 5,560 5,861 --------- ---------- Net earnings $ 9,219 $ 9,229 ========= ========== Basic earnings per common share $0.92 $0.92 ========= ========== Diluted earnings per common share $0.90 $0.91 ========= ========== Dividends per common share $0.13 $0.13 ========= ========== Weighted average shares outstanding: Basic 10,039 10,035 Diluted 10,212 10,132 See notes to consolidated financial statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (In thousands) Three Months Ended March 31, 2001 2000(1) -------- -------- Cash flows from operating activities: Net earnings $ 9,219 $ 9,229 --------- --------- Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 3,748 3,559 Net gains on short-term investments (63) (79) Noncash pension income (2,344) (1,744) Increase in deferred taxes 1,254 2,511 Changes in operating assets and liabilities (net of business acquired): Proceeds from sales of trading securities 105,293 25,800 Purchases of trading securities (102,042) (31,699) Decrease in receivables 3,356 1,374 Increase in inventory (349) (672) Decrease in progress payments (648) (354) (Decrease) increase in accounts payable and accrued expenses (3,249) 2,161 Increase (decrease) in income taxes payable 236 (847) Decrease (increase) in other assets 1,584 (162) Increase (decrease) in other liabilities 102 (7,210) Other, net 633 158 --------- --------- Total adjustments 7,511 (7,204) --------- --------- Net cash provided by operating activities 16,730 2,025 --------- --------- Cash flows from investing activities: Proceeds from sales of real estate and equipment 380 122 Additions to property, plant and equipment (3,322) (2,026) Acquisition of new business (2,325) 0 --------- --------- Net cash used by investing activities (5,267) (1,904) --------- --------- Cash flows from financing activities: Debt Repayments (5,089) 0 Common stock repurchases 0 (548) --------- --------- Net cash used for financing activities (5,089) (548) --------- --------- Effect of exchange rate changes on cash (2,431) (604) --------- --------- Net increase (decrease) in cash and cash equivalents 3,943 (1,031) Cash and cash equivalents at beginning of period 8,692 9,547 --------- --------- Cash and cash equivalents at end of period $ 12,635 $ 8,516 ========= ========= (1) Certain amounts reclassified in order to conform to current presentation See notes to consolidated financial statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (In thousands) Unearned Accumulated Portion of Other Common Capital Retained Restricted Comprehensive Treasury Stock Surplus Earnings Stock Income Stock ------- ------- -------- ----------- ------------ --------- December 31, 1999 $15,000 $51,599 $376,006 $(24) $(2,622) $181,604 ----------------------------------------------------------- Net earnings 41,074 Common dividends (5,214) Restricted stock issued 1 (15) (14) Common stock repurchased 1,489 Stock options exercised, net (94) (579) Amortization of earned portion of restricted stock 17 Translation adjustments, net (3,004) ---------------------------------------------------------- December 31, 2000 15,000 51,506 411,866 (22) (5,626) 182,500 ---------------------------------------------------------- Net earnings 9,219 Common dividends (1,302) Stock options exercised, net (824) (1,453) Amortization of earned portion of restricted stock 4 Translation adjustments, net (2,226) ---------------------------------------------------------- March 31, 2001 $15,000 $50,682 $419,783 $(18) $(7,852) $181,047 ========================================================== See notes to consolidated financial statements
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS of PRESENTATION Curtiss-Wright Corporation and its subsidiaries (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, defense, automotive, shipbuilding, processing, oil, petrochemical, agricultural equipment, railroad, power generation, and metalworking industries. Operations are conducted through nine manufacturing facilities, thirty-nine metal treatment service facilities and four component overhaul locations. The information furnished in this report has been prepared in conformity with US 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 2000 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. Certain reclassifications of prior period amounts have been made in order to conform to the current presentation. 2. ACQUISITIONS On March 23, 2001, the Corporation acquired the operating assets of Solent & Pratt Ltd. Solent & Pratt is a manufacturer of high performance butterfly valves and has been a global supplier to the petroleum, petrochemical, chemical and process industries for over 40 years. The operations are located in Bridport, England and will continue to operate under the Solent & Pratt name. The Solent & Pratt butterfly valve product line complements products that the Corporation currently offers to its existing markets. The addition also provides Curtiss-Wright with a European manufacturing presence for its Flow Control business segment and strengthens its distribution capabilities in that region. Solent & Pratt has a substantial installed base of butterfly valves worldwide. The Corporation purchased the assets and assumed certain operating liabilities of Solent & Pratt for approximately $1.5 million in cash and the retirement of outstanding debt. The acquisition was accounted for as a purchase in the first quarter of 2001. The excess of the purchase price over the fair value of the net assets acquired is estimated at $1.8 million and is being amortized over 30 years. The fair value of the net assets acquired is based on preliminary estimates and may be revised at a later date.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued (UNAUDITED) 3. RECEIVABLES Receivables at March 31, 2001 and December 31, 2000, include amounts billed to customers and unbilled charges on long-term contracts consisting of amounts recognized as sales but not billed as of 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) -------------------------- March 31, December 31, 2001 2000 ---------- ----------- Accounts receivable, billed $53,711 $60,927 Less: progress payments applied (65) (1,508) --------- ---------- 53,646 59,419 --------- ---------- Unbilled charges on long-term contracts 22,134 18,090 Less: progress payments applied (7,851) (7,040) --------- ---------- 14,283 11,050 --------- ---------- Allowance for doubtful accounts (2,639) (2,654) --------- ---------- Receivables, net $65,290 $67,815 ========= ========== 4. INVENTORIES Inventories are valued at the lower of cost (principally average cost) or market. The composition of inventories at March 31, 2001 and December 31, 2000 is as follows: (In thousands) ------------------------ March 31, December 31, 2001 2000 --------- ----------- Raw materials $12,834 $11,955 Work-in-process 11,518 10,815 Finished goods/component parts 34,489 32,621 Inventoried costs related to US government and other long-term contracts 5,875 5,961 ---------- ------------ Gross inventory 64,716 61,352 Less: inventory reserves (12,486) (10,944) Less: progress payments (390) (406) ---------- ------------ Inventories, net $51,840 $50,002 ========== ============
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued (UNAUDITED) 5. ENVIRONMENTAL MATTERS The Corporation establishes a reserve for a potential environmental responsibility when it concludes that a determination of legal liability is probable based upon the advice of counsel. Such amounts 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 the current 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 but are not limited to the Caldwell Trucking landfill superfund site, Fairfield, New Jersey; Sharkey landfill superfund site, Parsippany, New Jersey; Pfohl Brothers landfill site, Cheektowaga, New York; Amenia landfill site, Amenia, New York; and Chemsol, Inc. superfund site, Piscataway, New Jersey. The Corporation believes that the outcome of any of these matters will not have a material adverse effect on the Corporation's results of operations, financial condition, or liquidity. 6. SEGMENT INFORMATION (In thousands) Three Months Ended March 31, 2001 Motion Metal Flow Segment Corporate Consolidated Control Treatment Control Totals & Other Totals Revenue from external customers $29,957 $27,872 $22,088 $79,917 $0 $79,917 Intersegment revenues 0 106 0 106 (106) 0 Segment operating income 4,583 5,463 1,219 11,265 0 11,265 Segment assets 94,957 87,116 86,190 268,263 144,534 412,797
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued (UNAUDITED) Three Months Ended March 31, 2000 (In thousands) Motion Metal Flow Segment Corporate Consolidated Control Treatment Control Totals & Other(1) Totals Revenue from external customers $27,344 $28,224 $26,669 $82,237 $0 $82,237 Intersegment revenues 0 158 0 158 (158) 0 Segment operating income 1,409 6,832 2,545 10,786 1,303 12,089 Segment assets 112,477 85,061 87,770 285,308 106,367 391,675 (1) Operating income for Corporate and Other includes a $2.8 million gain for the curtailment of postretirement benefits associated with the closing of the Fairfield, NJ facility partially offset by accrued postemployment costs totaling $.7 million. Reconciliation: Three months ended (In thousands) March 31, 2001 March 31, 2000 -------------- -------------- Consolidated operating income $11,265 $12,089 Investment income, net 843 505 Rental income, net 743 1,160 Pension income, net 2,344 1,744 Other expense, net (167) (32) Interest expense (249) (376) --------- --------- Earnings before income taxes $14,779 $15,090 ========= ========= 7. COMPREHENSIVE INCOME Total comprehensive income for the periods ended March 31, 2001 and 2000 are as follows: Three months ended (In thousands) March 31, 2001 March 31, 2000 -------------- -------------- Net earnings $9,219 $9,229 Equity adjustment from foreign currency translations (2,226) 123 -------- ------- Total comprehensive income $6,993 $9,352 ======== =======
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES NOTES to CONSOLIDATED FINANCIAL STATEMENTS, Continued (UNAUDITED) 8. EARNINGS PER SHARE The Corporation accounts for its earnings per share (EPS) in accordance with Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS No. 128). Diluted earnings per share were computed based on the weighted average number of shares outstanding plus all potentially dilutive common shares issuable for the periods. Dilutive common shares for the three months ended March 31, 2001 and March 31, 2000 were 173,000 and 97,000, respectively. 9. Contingencies and Commitments The Corporation's Drive Technology subsidiary located in Switzerland entered into sales agreements with two European defense organizations which contained offset obligations to purchase approximately 43.0 million Swiss francs of product from suppliers of two European countries over multi-year periods which expire in 2005 and 2007. The agreements contain a penalty of 5% of the unmet obligation at the end of the term of the agreement. The Corporation expects to fully comply with both its obligations under these agreements. 10. Accounting for Derivatives and Hedging Activities The Corporation's adopted Financial Accounting Standard No. 133 "Accounting for Derivatives and Hedging Activities" effective January 1, 2001. The adoption of this standard had no material effect on the Corporation's results of operation or financial condition due to its limited use of derivatives.
PART I - ITEM 2 CURTISS-WRIGHT CORPORATION and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS RESULTS of OPERATIONS The Corporation's consolidated net earnings for the first quarter of 2001 totaled $9.2 million, or $0.90 per diluted share. Net earnings for the first quarter of 2000, which totaled $9.2 million or $0.91 per diluted share included several unusual items, the net effect of which had a favorable impact of $2.0 million on pre-tax earnings and $1.3 million on after-tax earnings. Excluding the unusual items, consisting of a gain related to post-retirement medical benefits, partially offset by additional consolidation costs from the Motion Control manufacturing consolidation and other post-employment expenses, net earnings in the first quarter of 2000 would have been $8.0 million, or $0.79 per diluted share. Net earnings for the first quarter of 2001 (which contained no unusual or normalizing adjustments) compared to normalized net earnings for the same period of 2000 reflects a 16% improvement. Operating income rose 12% to $11.3 million for the first quarter of 2001, as compared with normalized operating income of $10.0 million for the first quarter of 2000. Sales for the first quarter of 2001 declined 3% to $79.9 million compared with $82.2 million for the prior year quarter. The slight decline in sales largely reflects the adverse impacts of foreign currency exchange rates on sales and some weakness in a few of the markets served as discussed further in the Operating Performance section below. Relative foreign currency exchange rates in the first quarter of 2001, as compared to last year, negatively affected sales by approximately $1.3 million and operating income by approximately $0.5 million. New orders received for the first quarter of 2001 totaled $66.9 million, declining 5% from orders of $70.6 million for the first quarter of 2000. The Corporation's backlog at March 31, 2001 totaled $169.6 million, down 7% from backlog of $182.6 million at December 31, 2000. Operating Performance: Motion Control Sales for the Corporation's Motion Control segment improved 10% to $30.0 million in the first quarter of 2001, from $27.3 million in the first quarter of 2000, partially due to increased shipments of production hardware for the F-22 Raptor tactical fighter and light armored vehicles. Operating income for the quarter improved substantially to $4.6 million from $1.4 million in the first quarter of 2000. The increase in operating margin to 15.3% in the first quarter from 5.2% in the same period in 2000 was principally due to increased effectiveness of lean manufacturing initiatives. The component overhaul and repair business has been experiencing softened demand in the first quarter of 2001.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS, continued New orders received for the Motion Control segment totaled $18.8 million in the first quarter of 2001, declining 20% from orders received in the first quarter of 2000. The decline in orders reflects lower activity in military programs and the weaker demand in the component overhaul and repair business. Metal Treatment Sales for the Corporation's Metal Treatment segment totaled $27.9 million for the first quarter of 2001, slightly lower when compared with $28.2 million in the first quarter of 2000. The first quarter's decline in sales from the same period last year was the result of unfavorable foreign currency exchange rate movements that adversely impacted sales by approximately $1.0 million. These foreign currency exchange rate movements negatively affected operating income by approximately $0.5 million when compared to the rates that existed in the first quarter of 2000. The Metal Treatment business segment experienced softness in the automotive/truck and agricultural equipment markets. These weaknesses were offset by improvements in the oil and gas market as well as the aerospace sector, which represent about 50% of the business activity for this segment. Operating margins normalized for the adverse influence of foreign currency exchange rates would have been 21.3% for the first quarter 2001, as compared with 24.2% for the first quarter of 2000 and 21.9% for the fourth quarter of 2000. This year's performance was also adversely affected by increases in the cost of natural gas for heat-treating operations, transition costs associated with an acquisition completed in December of last year, start-up costs for a new facility in Indianapolis, and lower volume at some of the Company's facilities that have a high concentration of business related to the automotive sector. Flow Control The Corporation's Flow Control segment posted sales of $22.1 million for the first quarter of 2001, 17% lower when compared with $26.7 million in the first quarter of 2000. Lower sales during the first quarter of 2001 versus the same period last year were primarily the result of delays in the timing of new construction programs for Asian nuclear power plants and in the release of Navy contracts. The Company expects the Navy business to be made up during the course of this year based on contractual delivery schedules to the Navy. It is expected that sales to the Navy should exceed last year's sales by 15%. The business segment was also affected by the slowdown in the automotive and heavy truck markets, offset by very strong demand for product going to the petrochemical and oil and gas markets, primarily for maintenance, repair and overhaul applications.
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS, continued Corporate and Other The Corporation had no non-segment operating income in the first quarter of 2001 as compared with $1.3 million of non-segment operating income in the same period for the prior year. In the first quarter of 2000, the Corporation recognized a $2.8 million reduction to general and administrative expenses from the curtailment of postretirement benefits associated with the closing of the Fairfield, New Jersey facility. This benefit was partially offset by other non-recurring postemployment expenses. Corporate overhead costs for the first quarter of 2001 were reduced by 33% from the prior year period and benefited from a small adjustment to a final environmental insurance settlement recorded in the fourth quarter of 2000. Non-Operating Revenues and Costs For the first quarter of 2001, the Corporation recorded other non-operating net revenue totaling $3.8 million, compared with $3.4 million for the first quarter of 2000. The increase was primarily caused by higher pension income, reflecting the higher overfunded status of the Corporation's pension plan. On a period to period basis, investment income improved but was offset by a decline in net rental income due to a tax appeal recovery recorded in the first quarter of 2000. CHANGES IN FINANCIAL CONDITION: Liquidity and Capital Resources: The Corporation's working capital was $154.9 million at March 31, 2001, a 3% improvement over working capital at December 31, 2000 of $149.8 million. The ratio of current assets to current liabilities was 4.22 to 1 at March 31, 2001, compared with a current ratio of 3.86 to 1 at December 31, 2000. Cash, cash equivalents and short-term investments totaled $72.2 million in the aggregate at March 31, 2001, increasing slightly from $71.5 million at the prior year-end. During the first quarter of 2001, the Corporation repaid a $4.0 million industrial revenue bond and paid down its long-term Swiss debt by $1.0 million. Also in the period, the Corporation acquired the net assets of Solent & Pratt Ltd. for cash, as discussed in Note 2 to the Consolidated Financial Statements and under Other Developments, below. Cash flow for the first quarter of 2001 also benefited from a substantial decrease in billed receivables. Days sales outstanding at March 31, 2001 was also reduced to 58 days from 63 at December 31, 2000. The Corporation has two credit agreements, a Revolving Credit Agreement and a Short-Term Credit Agreement, in effect aggregating $100.0 million with a group of five banks. The credit agreements allow for borrowings to take place in US or certain foreign currencies. The Revolving Credit Agreement commits a maximum of $60.0 million to the Corporation for cash borrowings and letters of credit. The unused credit
CURTISS-WRIGHT CORPORATION and SUBSIDIARIES MANAGEMENT'S DISCUSSION and ANALYSIS of FINANCIAL CONDITION and RESULTS of OPERATIONS, continued available under this facility at March 31, 2001 was $33.3 million. The commitments made under the Revolving Credit Agreement expire December 17, 2004, but may be extended annually for successive one-year periods with the consent of the bank group. The Corporation also has in effect a Short-Term Credit Agreement, which allows for cash borrowings of $40.0 million, all of which was available at March 31, 2001. The Short-Term Credit Agreement expires on December 14, 2001. The Short-Term Credit Agreement may be extended, with the consent of the bank group, for additional periods not to exceed 364 days each. Cash borrowings under the two credit agreements at March 31, 2001 were at a US Dollar equivalent of $9.4 million, compared with cash borrowing of $18.6 million at March 31, 2000. Borrowings under these agreements were used to finance the acquisition of Drive Technology in December 1998 and have a remaining balance of 16.5 million Swiss francs. The loans had variable interest rates averaging 3.75% for the first quarter of 2001 and variable interest rates averaging 2.97% for the first quarter of 2000. During the first quarter of 2001, internally available funds were adequate to meet capital expenditures of $3.3 million. Expenditures incurred during the first quarter were primarily for machinery and equipment within the Motion Control and Metal Treatment segments. The Corporation is expected to make additional capital expenditures of approximately $15 million during the balance of the year, primarily for machinery and equipment for the business segments. Funds from internal sources are expected to be adequate to meet planned capital expenditures, environmental and other obligations for the remainder of the year. Other Developments As discussed in Note 2 to the Consolidated Financial Statements, during the first quarter of 2001, the Corporation made a small but strategic acquisition of Solent & Pratt, an English valve manufacturer. This acquisition gives the Corporation a complementary product line and a very strong distribution network in the European petrochemical valve market. In addition, the Corporation sold a distribution business in Western Canada to a well-positioned distribution firm in the area, resulting in a small gain in the first quarter of 2001.
PART I - ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in the Corporation's market risk during the three months ended March 31, 2001. Information regarding market risk and market risk management policies is more fully described in item 7A. "Quantitative and Qualitative Disclosures about Market Risk" of the Corporation's Annual Report on Form 10-K for the year ended December 31, 2000. FORWARD-LOOKING INFORMATION Except for historical information contained herein, this Quarterly Report on Form 10-Q does contain "forward looking" information within the meaning of Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934. Examples of forward looking information include, but are not limited to, (a) projections of or statements regarding return on investment, future earnings, interest income, other income, earnings or loss per share, investment mix and quality, growth prospects, capital structure and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance, and (d) statements of assumptions, such as economic conditions underlying other statements. Such forward looking information can be identified by the use of forward looking terminology such as "believes," "expects," "may," "will," "should," "anticipates," or the negative of any of the foregoing or other variations thereon or comparable terminology, or by discussion of strategy. No assurance can be given that the future results described by the forward looking information will be achieved. Such statements are subject to risks, uncertainties, and other factors which are outside our control that could cause actual results to differ materially from future results expressed or implied by such forward looking information. Readers are cautioned not to put undue reliance on such forward-looking information. Such statements in this Report include, without limitation, those contained in Part I, Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations and the Notes to the Consolidated Financial Statements including, without limitation, the Environmental Matters Note. Important factors that could cause the actual results to differ materially from those in these forward-looking statements include, among other items, (i) a reduction in anticipated orders; (ii) an economic downturn; (iii) unanticipated environmental remediation expenses or claims; (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; (vii) changes in foreign currency exchange rates and (viii) other factors that generally affect the business of companies operating in the Corporation's Segments.
PART II - OTHER INFORMATION Item 4. SUBMISSION of MATTERS to a VOTE of SECURITY HOLDERS On May 4, 2001, the Registrant held its annual meeting of stockholders. The matters submitted to a vote by the stockholders were the election of directors and the retention of independent accountants for the Registrant. The vote received by the director nominees was as follows: For Withheld Martin R. Benante 8,524,148 1,078,956 James B. Busey IV 8,524,089 1,079,015 S. Marce Fuller 8,523,813 1,079,291 Dave Lasky 8,441,999 1,161,105 William B. Mitchell 8,523,975 1,079,129 John Myers 8,523,010 1,080,094 William W. Sihler 8,524,384 1,078,720 J. McLain Stewart 8,521,192 1,081,912 There were no votes against or broker non-votes. The stockholders approved the retention of PricewaterhouseCoopers LLP, independent accountants for the Registrant. The holders of 8,520,172 shares voted in favor; 1,080,586 voted against; 2,346 abstained. There were no broker non-votes.
Item 6. EXHIBITS and REPORTS on FORM 8-K (a) Exhibits 2.2 Amended and Restated Distribution Agreement, dated as of January 9, 2001, between the Company and Unitrin, Inc. (incorporated by reference to Appendix A to the Company's Preliminary Schedule 14C with respect to the recapitalization of the Company dated January 12, 2001.) 2.3 Amended and Restated Agreement and Plan of Merger, dated as of January 9, 2001, among the Company, Unitrin, Inc., and CW Disposition Company (incorporated by reference to Appendix B to the Company's Preliminary Schedule 14C with respect to the recapitalization of the Company dated January 12, 2001.) (b) Reports on Form 8-K The Registrant did not file any report on Form 8-K during the quarter ended March 31, 2001. 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 undersigned thereunto duly authorized. CURTISS-WRIGHT CORPORATION -------------------------- (Registrant) By: /s/ Robert A. Bosi ------------------------- Robert A. Bosi Vice President - Finance By: /s/ Glenn E. Tynan ------------------------- Glenn E. Tynan Controller Dated: May 15, 2001