Once an aeronautical pioneer -- its engines powered the B-17 bomber and The Spirit of St. Louis -- Curtiss-Wright makes lower-visibility products these days. Curtiss-Wright comprises three business segments. Flow control makes special valves for military and commercial applications, including nuclear submarines and power plants, and refineries. Motion control makes actuation systems that control wing flaps and bomb-bay doors, and stabilize aiming systems; products include sensors and electronic controls, along with ruggedized computer systems for military ground vehicles. Metal treatment technologies help prevent premature fatigue and corrosion failures. The US government generates about 40% of revenues.
So what happened to Curtiss-Wright's airplane engine business? In a nutshell, the company missed the transition from propellers to jet engines in the 1950s and decided to focus on other endeavors. It operates about 200 facilities worldwide.
The company's flow control segment, 52% of revenue, makes products that manage the flow of liquids and gases, provide power, power electronic operating systems, and supply critical functions. Markets served include power generation, naval defense, oil and gas, and general industrial. The segment itself is divided into four operating divisions: electro-mechanical systems, nuclear group, oil and gas systems, and marine and power products.
Motion control, about 35% of sales, is divided into three divisions: embedded computing, flight systems, and integrated sensing. The segment serves markets that include commercial aerospace, aerospace defense, ground defense, and general industrial. Metal treatment serves markets that include commercial and defense aerospace, oil and gas, power generation, and such general industrial markets as automotive, transportation, construction equipment, and miscellaneous metal working industries. Technical services provided by the segment include shot peening (bombarding a surface with steel shot or ceramic or glass beads to compress the outer layer and improve durability), specialty coatings, heat treating, laser peening (for increasing the life of critical industrial and flight turbine engine components), and analytical services.
Revenue rose 9% in 2011 compared with 2010 due to strong sales in all three of the company's segments. For the company as a whole net earnings rose from about $106.6 million to more than $130.4 million. By segment flow control increased 4% thanks mainly to strong sales in the markets of power generation (related to the AP1000 domestic and China reactor projects), commercial aerospace, and general industrial (to meet demand for commercial heating, ventilation, and air conditioning products). The 2011 acquisition of Douglas Equipment, which brought more commercial aerospace business, also contributed to the segment's uptick.
Motion control headed up 10% to meet demand from the commercial and defense markets. Acquisitions and favorable foreign currency exchange rates also contributed to the segment's healthy sales. In the commercial market the segment enjoyed demand for flight control products for the Boeing 747 and 787, as well as more demand for commercial repairs and overhaul as a result of the acquisition of ACRA Control. Strong sales of sensors and controls products to the general industrial market also contributed to the segment's strong results. The metal treatment segment surged 28% to meet demand for shot peening and coatings services from commercial markets. The segment also benefited from increased demand from the commercial aerospace and general industrial markets. Half of the segment's sales increase was attributed to acquisitions and favorable foreign exchange rates.
The company's strategy includes developing new core products, such as electronic and sensor technologies for the embedded computing and electronic systems markets. Though one prime customer, the US Department of Defense, is working with a reduced budget, Curtiss-Wright is confident about further business from the department as it continues to focus on intelligence, surveillance, and reconnaissance (ISR), electronic warfare, and communications. The US Navy in particular is continuing funding for programs served by Curtiss-Wright, such as Virginia class submarines, the DDG 51 class destroyer, and the Ohio Class SSBN submarine replacement program.
In late 2012 the company agreed to purchase Williams Controls, a maker of electronic throttle controls for commercial trucks, buses, and RVs, for $119 million. Williams Controls will be integrated with Curtiss-Wright's motion controls segment.
In 2011 Curtiss-Wright acquired Predator Systems Inc. (PSI), which was purchased for roughly $13 million. PSI specializes in designing and making motion control technologies for aerospace, as well as ground defense and ordnance guidance applications. Also that year the company acquired Douglas Equipment, a UK-based supplier of aviation support vehicles with both commercial and military applications, for a reported $20 million. The company also acquired the assets of BASF's Surface Technologies business during the same year. The acquisition added three locations that provide thermal spray coatings that prevent oxidation/corrosion, thermal barrier protection, and abrasion resistance for aerospace, power generation, and medical applications. – less