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Curtiss-Wright Reports Third Quarter 2020 Financial Results

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Curtiss-Wright Corporation (NYSE: CW) reports financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights:

  • Reported diluted earnings per share (EPS) of $1.55, with Adjusted diluted EPS of $1.85;
  • Net sales of $572 million, down 7%, with defense market sales up 11%;
  • Reported operating income of $85 million, with Reported operating margin of 14.8%;
  • Adjusted operating income of $100 million, down 7%;
  • Adjusted operating margin of 17.4%, flat compared to the prior year, as benefits of our cost containment and restructuring initiatives partially offset reduced commercial markets sales;
  • Reported free cash flow (FCF) of $49 million, with Adjusted FCF of $55 million; Year-to-date Adjusted FCF of $138 million, up 12%; and
  • Share repurchases of approximately $13 million.

We generated solid third quarter Adjusted diluted EPS of $1.85 led by stronger than expected sales growth in our defense markets of 11%, said David C. Adams, Chairman and CEO of Curtiss-Wright Corporation. In addition, all three segments demonstrated sequential quarterly improvement in sales, operating income and operating margin, and also benefitted from the savings generated by our ongoing cost containment and restructuring initiatives. We remain on track to achieve our full-year 2020 guidance.

Updated Full-Year 2020 Adjusted Guidance (compared to Full-Year 2019 Adjusted Actuals):

  • Narrowed overall sales guidance by raising bottom end of range to down 4% to 5% (previously down 4% to 6%); Increased defense markets sales growth range to up 11% to 13% (previously up 8% to 10%);
  • Increased Adjusted operating margin by 10 basis points to new range of 16.1% to 16.3% (previously 16.0% to 16.2%);
  • Narrowed Adjusted diluted EPS guidance to new range of $6.70 to $6.85 (previously $6.60 to $6.85);
  • Maintained Adjusted FCF guidance range of $350 to $380 million, with Adjusted FCF conversion of approximately 130%; and
  • Updated guidance does not include the recently announced acquisition of Pacific Star Communications, Inc. (PacStar), a leading provider of advanced tactical communications solutions for battlefield network management, which is anticipated to close in the fourth quarter.

Mr. Adams continued, Looking ahead to the remainder of 2020, we expect continued overall sales growth in our defense markets, which remain strong, and savings generated by our restructuring actions to drive sequential improvement in operating margin, diluted EPS and free cash flow.

We continue to leverage our strong and healthy balance sheet to implement our balanced capital allocation strategy. Last month, we announced our decision to acquire PacStar and today we are pleased to announce the authorization of an additional $200 million in share repurchases. In addition, as part of our previously announced 2020 restructuring actions, we have elected to discontinue our build-to-print actuation contract supporting the Boeing 737 MAX program at the conclusion of this year. Phasing out this historically low-margin and commodity-type business will lessen the Companys overall exposure to the commercial aerospace market. Collectively, these actions are expected to aid our efforts to drive long-term profitable growth and deliver significant value for our shareholders.

Company Announces New $200 Million Share Repurchase Authorization:

  • Curtiss-Wrights Board of Directors has authorized an additional $200 million for future share repurchases, increasing total available authorization to $250 million, which is immediately available for opportunistic share repurchases;
  • Of this authorization, the Company intends to repurchase a minimum of $50 million in opportunistic share repurchases in the fourth quarter of 2020;
  • The Company remains on track to complete its existing $50 million 10b5-1 share repurchase program authorized for 2020 by the end of the year, and had previously completed a $100 million opportunistic share repurchase program executed in March 2020; and
  • Beginning in January 2021, the Company expects to repurchase $50 million additional shares via a 10b5-1 program throughout 2021, which is expected to more than offset potential dilution from compensation plans.

Third Quarter 2020 Operating Results

(In millions)

Q3-2020

Q3-2019

Change

Sales

$

571.6

 

$

614.9

 

(7%)

Reported operating income

$

84.6

 

$

105.6

 

(20%)

Adjustments (1)

 

15.3

 

 

1.6

 

 

Adjusted operating income (1)

$

99.9

 

$

107.2

 

(7%)

Adjusted operating margin (1)

 

17.4

%

 

17.4

%

0 bps

(1)

 

Adjusted results exclude $11 million in restructuring costs, and one-time inventory step-up, backlog amortization and transaction costs for acquisitions.

  • Sales of $572 million, down $43 million, or 7%;
  • Sales to the defense markets increased 11%, 6% of which was organic, led by strong growth in aerospace and naval defense, while sales to the commercial markets decreased 22%, due to reduced demand in the commercial aerospace, general industrial and power generation markets. Please refer to the accompanying tables for an overall breakdown of sales by end market;
  • Adjusted operating income was $100 million, down 7%, reflecting unfavorable overhead absorption on lower revenues in the Commercial/Industrial segment, partially offset by increased profitability in the Power segment;
  • Adjusted operating margin was flat at 17.4%, reflecting the benefits of our company-wide restructuring and cost containment actions; and
  • Non-segment expenses of $8 million increased by $1 million, or 10%, compared to the prior year, primarily due to higher corporate costs.

Net Earnings and Diluted EPS

(In millions, except EPS)

Q3-2020

Q3-2019

Change

Reported net earnings

$

64.6

$

82.5

(22%)

Adjustments, net of tax (1)

 

12.8

 

1.3

 

Adjusted net earnings (1)

$

77.4

$

83.8

(8%)

Reported diluted EPS

$

1.55

$

1.92

(19%)

Adjustments, net of tax (1)

 

0.30

 

0.03

 

Adjusted diluted EPS (1)

$

1.85

$

1.95

(5%)

(1)

Adjusted results exclude restructuring costs and one-time inventory step-up, backlog amortization and transaction costs for acquisitions.

  • Reported net earnings of $65 million, down 22% from the prior year, reflecting lower segment operating income and higher interest expense;
  • Reported diluted EPS of $1.55, down 19% from the prior year, reflecting lower net earnings, partially offset by a lower share count;
  • Adjusted net earnings of $77 million, down 8%;
  • Adjusted diluted EPS of $1.85, down 5%; and
  • Effective tax rate of 20.2% decreased slightly compared to the prior year quarter.

Free Cash Flow

(In millions)

Q3-2020

Q3-2019

Change

Net cash provided by operating activities

$

56.0

 

$

118.6

 

(53

%)

Capital expenditures

 

(7.0

)

 

(16.4

)

57

%

Reported free cash flow

$

49.0

 

$

102.2

 

(52

%)

Adjustment to capital expenditures (DRG facility investment) (1)

 

0.4

 

 

4.8

 

(92

%)

Restructuring (1)

 

5.9

 

 

 

 

Adjusted free cash flow (1)

$

55.3

 

$

107.0

 

(48

%)

(1)

Adjusted free cash flow excludes a capital investment related to the new, state-of-the-art naval facility principally for DRG which impacted both periods, and the cash impact from restructuring in the current period.

  • Reported free cash flow was $49 million, a decrease of $53 million compared to the prior year, principally driven by lower cash earnings and lower collections, partially offset by a reduction in capital expenditures;
  • Capital expenditures decreased $9 million to $7 million compared to the prior year, primarily due to lower capital investments within the Power segment; and
  • Adjusted free cash flow was $55 million in the third quarter.

New Orders and Backlog

  • New orders of $559 million decreased 14% compared with the prior year period, as strong growth in embedded computing and valves products serving the defense markets was more than offset by reduced demand across the commercial markets; Order activity within our commercial and industrial markets continued to demonstrate solid monthly improvement compared with the lows experienced in May; and
  • Backlog of $2.2 billion increased 1% from December 31, 2019.

Share Repurchase and Dividends

  • During the third quarter, the Company repurchased 133,673 shares of its common stock for approximately $13 million;
  • Year-to-date, the Company repurchased 1.37 million shares for approximately $138 million, which included a $100 million opportunistic share repurchase program executed in March; and
  • The Company also declared a quarterly dividend of $0.17 a share, unchanged from the previous quarter.

Third Quarter 2020 Segment Performance

Commercial/Industrial

(In millions)

Q3-2020

Q3-2019

Change

Sales

$

222.5

 

$

279.0

 

(20%)

Reported operating income

$

24.8

 

$

43.6

 

(43%)

Adjustments (1)

 

7.7

 

 

 

 

Adjusted operating income (1)

$

32.5

 

$

43.6

 

(25%)

Adjusted operating margin (1)

 

14.6

%

 

15.6

%

(100 bps)

(1)

Adjusted results exclude restructuring costs and one-time backlog amortization and transaction costs for acquisitions.

  • Sales of $223 million, down $56 million, or 20%;
  • Higher aerospace defense revenues reflect increased sales of actuation and sensors equipment on various fighter jet programs;
  • Lower commercial aerospace market revenues reflect reduced OEM sales of actuation and sensors equipment, as well as surface treatment services;
  • General industrial market revenue declines reflect reduced year-over-year sales for industrial vehicle, valve and controls products, as well as surface treatment services;
  • Reported operating income was $25 million, with Reported operating margin of 11.2%; and
  • Adjusted operating income was $33 million, while Adjusted operating margin decreased 100 basis points to 14.6%, principally reflecting unfavorable absorption on lower commercial sales partially offset by the benefits of our cost containment and restructuring initiatives.

Defense

(In millions)

Q3-2020

Q3-2019

Change

Sales

$

180.3

 

$

160.4

 

12%

Reported operating income

$

41.6

 

$

40.2

 

3%

Adjustments (1)

 

3.6

 

 

0.7

 

 

Adjusted operating income (1)

$

45.2

 

$

40.9

 

11%

Adjusted operating margin (1)

 

25.0

%

 

25.4

%

(40 bps)

(1)

Adjusted results exclude restructuring costs and one-time backlog amortization and transaction costs for acquisitions.

  • Sales of $180 million, up $20 million, or 12%;
  • Higher aerospace defense market revenues were principally driven by increased sales of embedded computing equipment on various programs, most notably on Unmanned Aerial Vehicle (UAV) platforms;
  • Strong naval defense market revenue growth reflected timing of production of valves on submarine and aircraft carrier programs, as well as the contribution from the 901D acquisition;
  • Reduced ground defense market revenues reflect lower sales on international tank platforms;
  • Reported operating income was $42 million, with Reported operating margin of 23.0%; and
  • Adjusted operating income was $45 million, up 11% from the prior year, while Adjusted operating margin decreased 40 basis points to 25.0%, reflecting unfavorable mix on strong sales of our defense electronics products, mainly offset by the contribution from acquisitions and the benefits of our cost containment actions.

Power

(In millions)

Q3-2020

Q3-2019

Change

Sales

$

168.8

 

$

175.5

 

(4

%)

Reported operating income

$

26.0

 

$

28.8

 

(10

%)

Adjustments (1)

 

3.9

 

 

1.0

 

 

Adjusted operating income (1)

$

29.9

 

$

29.8

 

0

%

Adjusted operating margin (1)

 

17.7

%

 

17.0

%

70 bps

(1)

Adjusted results exclude restructuring costs and one-time transition and IT security costs associated with the relocation of our DRG business.

  • Sales of $169 million, down $7 million, or 4%;
  • Naval defense market revenues increased slightly, as higher Columbia class submarine production revenues were mainly offset by lower service center sales;
  • Reduced power generation market sales principally reflect lower domestic and international aftermarket revenues, partially offset by increased revenues on the CAP1000 program;
  • Reported operating income was $26 million, with Reported operating margin of 15.4%; and
  • Adjusted operating income was $30 million, flat compared to the prior year, while Adjusted operating margin increased 70 basis points to 17.7%, principally driven by the benefits of our cost containment and restructuring initiatives.

**********

A more detailed breakdown of the Companys 2020 financial guidance by segment and by market, as well as all reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts can be found in the accompanying schedules.

Conference Call & Webcast Information

The Company will host a conference call to discuss its third quarter financial results and business outlook at 10:00 a.m. ET on Thursday, October 29, 2020. A live webcast of the call and the accompanying financial presentation, as well as a replay of the call, will be made available on the internet by visiting the Investor Relations section of the Companys website at www.curtisswright.com.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

($’s in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

Change

 

September 30,

 

Change

 

 

2020

 

2019

 

$

 

%

 

2020

 

2019

 

$

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

493,398

 

 

$

516,760

 

 

$

(23,362)

 

 

(5

%)

 

$

1,457,772

 

 

$

1,520,612

 

 

$

(62,840)

 

 

(4

%)

Service sales

 

78,216

 

 

98,120

 

 

(19,904)

 

 

(20

%)

 

265,120

 

 

311,578

 

 

(46,458)

 

 

(15

%)

Total net sales

 

571,614

 

 

614,880

 

 

(43,266)

 

 

(7

%)

 

1,722,892

 

 

1,832,190

 

 

(109,298)

 

 

(6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product sales

 

305,921

 

 

331,793

 

 

(25,872)

 

 

(8

%)

 

945,886

 

 

986,475

 

 

(40,589)

 

 

(4

%)

Cost of service sales

 

52,872

 

 

57,011

 

 

(4,139)

 

 

(7

%)

 

177,580

 

 

192,722

 

 

(15,142)

 

 

(8

%)

Total cost of sales

 

358,793

 

 

388,804

 

 

(30,011)

 

 

(8

%)

 

1,123,466

 

 

1,179,197

 

 

(55,731)

 

 

(5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

212,821

 

 

226,076

 

 

(13,255)

 

 

(6

%)

 

599,426

 

 

652,993

 

 

(53,567)

 

 

(8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

17,587

 

 

18,362

 

 

(775)

 

 

(4

%)

 

54,163

 

 

54,503

 

 

(340)

 

 

(1

%)

Selling expenses

 

24,869

 

 

28,133

 

 

(3,264)

 

 

(12

%)

 

81,650

 

 

90,303

 

 

(8,653)

 

 

(10

%)

General and administrative expenses

 

77,251

 

 

74,012

 

 

3,239

 

 

4

%

 

230,515

 

 

224,888

 

 

5,627

 

 

3

%

Restructuring expenses

 

8,541

 

 

 

 

8,541

 

 

NM

 

20,730

 

 

 

 

20,730

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

84,573

 

 

105,569

 

 

(20,996)

 

 

(20

%)

 

212,368

 

 

283,299

 

 

(70,931)

 

 

(25

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

9,055

 

 

7,951

 

 

1,104

 

 

14

%

 

25,059

 

 

23,183

 

 

1,876

 

 

8

%

Other income, net

 

5,417

 

 

6,355

 

 

(938)

 

 

(15

%)

 

6,844

 

 

17,704

 

 

(10,860)

 

 

(61

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

80,935

 

 

103,973

 

 

(23,038)

 

 

(22

%)

 

194,153

 

 

277,820

 

 

(83,667)

 

 

(30

%)

Provision for income taxes

 

(16,315)

 

 

(21,463)

 

 

5,148

 

 

(24

%)

 

(46,754)

 

 

(59,645)

 

 

12,891

 

 

(22

%)

Net earnings

 

$

64,620

 

 

$

82,510

 

 

$

(17,890)

 

 

(22

%)

 

$

147,399

 

 

$

218,175

 

 

$

(70,776)

 

 

(32

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.56

 

 

$

1.93

 

 

 

 

 

 

$

3.52

 

 

$

5.10

 

 

 

 

 

Diluted earnings per share

 

$

1.55

 

 

$

1.92

 

 

 

 

 

 

$

3.49

 

 

$

5.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per share

 

$

0.17

 

 

$

0.17

 

 

 

 

 

 

$

0.51

 

 

$

0.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

41,545

 

 

42,709

 

 

 

 

 

 

41,926

 

 

42,755

 

 

 

 

 

Diluted

 

41,797

 

 

42,995

 

 

 

 

 

 

42,190

 

 

43,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NM – not meaningful

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

($’s in thousands, except par value)

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

Change

 

 

 

2020

 

2019

 

%

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

426,821

 

 

$

391,033

 

 

9

%

 

Receivables, net

 

634,944

 

 

632,194

 

 

%

 

Inventories, net

 

460,585

 

 

424,835

 

 

8

%

 

Other current assets

 

58,403

 

 

81,729

 

 

(29)

%

 

Total current assets

 

1,580,753

 

 

1,529,791

 

 

3

%

Property, plant, and equipment, net

 

379,859

 

 

385,593

 

 

(1)

%

Goodwill

 

1,207,881

 

 

1,166,680

 

 

4

%

Other intangible assets, net

 

476,864

 

 

479,907

 

 

(1)

%

Operating lease right-of-use assets, net

 

152,987

 

 

165,490

 

 

(8)

%

Prepaid pension asset

 

131,631

 

 

 

 

NM

Other assets

 

29,805

 

 

36,800

 

 

(19)

%

 

Total assets

 

$

3,959,780

 

 

$

3,764,261

 

 

5

%

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable

 

158,020

 

 

222,000

 

 

(29)

%

 

Accrued expenses

 

136,965

 

 

164,744

 

 

(17)

%

 

Income taxes payable

 

5,711

 

 

7,670

 

 

(26)

%

 

Deferred revenue

 

267,504

 

 

276,115

 

 

(3)

%

 

Other current liabilities

 

97,634

 

 

74,202

 

 

32

%

 

Total current liabilities

 

665,834

 

 

744,731

 

 

(11)

%

Long-term debt

 

1,058,707

 

 

760,639

 

 

39

%

Deferred tax liabilities, net

 

94,720

 

 

80,159

 

 

18

%

Accrued pension and other postretirement benefit costs

 

91,745

 

 

138,635

 

 

(34)

%

Long-term operating lease liability

 

133,476

 

 

145,124

 

 

(8)

%

Long-term portion of environmental reserves

 

15,269

 

 

15,026

 

 

2

%

Other liabilities

 

100,566

 

 

105,575

 

 

(5)

%

 

Total liabilities

 

2,160,317

 

 

1,989,889

 

 

9

%

 

 

 

 

 

 

 

 

Stockholders’ equity

 

 

 

 

 

 

Common stock, $1 par value

 

49,187

 

 

49,187

 

 

%

Additional paid in capital

 

121,797

 

 

116,070

 

 

5

%

Retained earnings

 

2,623,289

 

 

2,497,111

 

 

5

%

Accumulated other comprehensive loss

 

(310,891)

 

 

(325,274)

 

 

4

%

Less: cost of treasury stock

 

(683,919)

 

 

(562,722)

 

 

(22)

%

 

Total stockholders’ equity

 

1,799,463

 

 

1,774,372

 

 

1

%

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders’ equity

 

$

3,959,780

 

 

$

3,764,261

 

 

5

%

 

 

 

 

 

 

 

 

NM – not meaningful

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

SEGMENT INFORMATION (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

 

 

 

 

Change

 

 

 

 

 

Change

 

 

2020

 

2019

 

%

 

2020

 

2019

 

%

Sales:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial/Industrial

 

$

222,527

 

 

$

278,967

 

 

(20

%)

 

$

700,543

 

 

$

841,725

 

 

(17

%)

Defense

 

 

180,321

 

 

 

160,413

 

 

12

%

 

 

516,387

 

 

 

452,688

 

 

14

%

Power

 

 

168,766

 

 

 

175,500

 

 

(4

%)

 

 

505,962

 

 

 

537,777

 

 

(6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total sales

 

$

571,614

 

 

$

614,880

 

 

(7

%)

 

$

1,722,892

 

 

$

1,832,190

 

 

(6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Commercial/Industrial

 

$

24,838

 

 

$

43,641

 

 

(43

%)

 

$

74,191

 

 

$

130,222

 

 

(43

%)

Defense

 

 

41,550

 

 

 

40,241

 

 

3

%

 

 

98,126

 

 

 

93,580

 

 

5

%

Power

 

 

25,962

 

 

 

28,776

 

 

(10

%)

 

 

67,843

 

 

 

86,140

 

 

(21

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total segments

 

$

92,350

 

 

$

112,658

 

 

(18

%)

 

$

240,160

 

 

$

309,942

 

 

(23

%)

Corporate and other

 

 

(7,777

)

 

 

(7,089

)

 

(10

%)

 

 

(27,792

)

 

 

(26,643

)

 

(4

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating income

 

$

84,573

 

 

$

105,569

 

 

(20

%)

 

$

212,368

 

 

$

283,299

 

 

(25

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margins:

 

 

 

 

 

 

 

 

 

 

 

 

Commercial/Industrial

 

 

11.2

%

 

 

15.6

%

 

(440 bps)

 

 

10.6

%

 

 

15.5

%

 

(490 bps)

Defense

 

 

23.0

%

 

 

25.1

%

 

(210 bps)

 

 

19.0

%

 

 

20.7

%

 

(170 bps)

Power

 

 

15.4

%

 

 

16.4

%

 

(100 bps)

 

 

13.4

%

 

 

16.0

%

 

(260 bps)

Total Curtiss-Wright

 

 

14.8

%

 

 

17.2

%

 

(240 bps)

 

 

12.3

%

 

 

15.5

%

 

(320 bps)

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment margins

 

 

16.2

%

 

 

18.3

%

 

(210 bps)

 

 

13.9

%

 

 

16.9

%

 

(300 bps)

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

SALES BY END MARKET (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

 

 

 

 

Change

 

 

 

 

 

Change

 

 

2020

 

2019

 

%

 

2020

 

2019

 

%

Defense markets:

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace

 

$

121,987

 

 

$

110,742

 

 

10

%

 

$

333,120

 

 

$

293,955

 

 

13

%

Ground

 

20,519

 

 

22,231

 

 

(8

%)

 

63,205

 

 

69,383

 

 

(9

%)

Naval

 

165,524

 

 

143,430

 

 

15

%

 

496,157

 

 

424,371

 

 

17

%

Total Defense

 

$

308,030

 

 

$

276,403

 

 

11

%

 

$

892,482

 

 

$

787,709

 

 

13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial markets:

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace

 

$

70,943

 

 

$

109,015

 

 

(35

%)

 

$

242,708

 

 

$

320,237

 

 

(24

%)

Power Generation

 

80,509

 

 

88,543

 

 

(9

%)

 

241,059

 

 

278,194

 

 

(13

%)

General Industrial

 

112,132

 

 

140,919

 

 

(20

%)

 

346,643

 

 

446,050

 

 

(22

%)

Total Commercial

 

$

263,584

 

 

$

338,477

 

 

(22

%)

 

$

830,410

 

 

$

1,044,481

 

 

(20

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Curtiss-Wright

 

$

571,614

 

 

$

614,880

 

 

(7

%)

 

$

1,722,892

 

 

$

1,832,190

 

 

(6

%)

Use of Non-GAAP Financial Information (Unaudited)

The Corporation supplements its financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial information. Curtiss-Wright believes that these non-GAAP measures provide investors with additional insight into the Companys ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. Curtiss-Wright encourages investors to review its financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

The Companys presentation of its financials and guidance includes an Adjusted (non-GAAP) view that excludes significant restructuring costs in 2020 associated with its operations, including one-time actions taken in response to COVID-19, a non-cash impairment of capitalized development costs related to a commercial aerospace program, first year purchase accounting costs associated with its acquisitions, as well as one-time transition and IT security costs, and capital investments, specifically associated with the relocation of the DRG business in the Power segment. Transition costs include relocation of employees and equipment as well as overlapping facility and labor costs associated with the relocation. We believe this Adjusted view will provide improved transparency to the investment community in order to better measure Curtiss-Wrights ongoing operating and financial performance and better comparisons of our key financial metrics to our peers. Reconciliations of Reported GAAP amounts to Adjusted non-GAAP amounts are furnished within this release.

The following definitions are provided:

Adjusted Operating Income, Operating Margin, Net Earnings and Diluted EPS

These Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Earnings and Diluted Earnings per Share (EPS) under GAAP excluding: (i) the impact of first year purchase accounting costs associated with acquisitions for current and prior year periods, specifically one-time inventory step-up, backlog amortization and transaction costs; (ii) one-time transition and IT security costs associated with the relocation of a business in the current year period; (iii) the non-cash impairment of capitalized development costs related to a commercial aerospace program; and (iv) significant restructuring costs in 2020 associated with its operations.

Organic Sales and Organic Operating Income

The Corporation discloses organic sales and organic operating income because the Corporation believes it provides investors with insight as to the Companys ongoing business performance. Organic sales and organic operating income are defined as sales and operating income excluding the impact of restructuring costs, foreign currency fluctuations and contributions from acquisitions made during the last twelve months.

 

Three Months Ended

 

September 30,

 

2020 vs. 2019

 

Commercial/Industrial

 

Defense

 

Power

 

Total Curtiss-Wright

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

Organic

(22

%)

 

(28

%)

 

3

%

 

2

%

 

(4

%)

 

3

%

 

(10

%)

 

(11

%)

Acquisitions

1

%

 

0

%

 

8

%

 

2

%

 

0

%

 

0

%

 

3

%

 

1

%

Restructuring

0

%

 

(15

%)

 

0

%

 

(1

%)

 

0

%

 

(13

%)

 

0

%

 

(10

%)

Foreign Currency

1

%

 

0

%

 

1

%

 

0

%

 

0

%

 

0

%

 

0

%

 

0

%

Total

(20

%)

 

(43

%)

 

12

%

 

3

%

 

(4

%)

 

(10

%)

(7

%)

 

(20

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

September 30,

 

2020 vs. 2019

 

Commercial/Industrial

 

Defense

 

Power

 

Total Curtiss-Wright

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

 

Sales

 

Operating income

Organic

(18

%)

 

(33

%)

 

5

%

 

6

%

 

(6

%)

 

(8

%)

 

(9

%)

 

(16

%)

Acquisitions

1

%

 

0

%

 

9

%

 

0

%

 

0

%

 

0

%

 

3

%

 

0

%

Restructuring

0

%

 

(11

%)

 

0

%

 

(2

%)

 

0

%

 

(13

%)

 

0

%

 

(10

%)

Foreign Currency

0

%

 

1

%

 

0

%

 

1

%

 

0

%

 

0

%

 

0

%

 

1

%

Total

(17

%)

 

(43

%)

 

14

%

 

5

%

 

(6

%)

 

(21

%)

(6

%)

 

(25

%)

Free Cash Flow and Free Cash Flow Conversion

The Corporation discloses free cash flow because it measures cash flow available for investing and financing activities. Free cash flow represents cash available to repay outstanding debt, invest in the business, acquire businesses, return capital to shareholders and make other strategic investments. Free cash flow is defined as cash flow provided by operating activities less capital expenditures. Adjusted free cash flow excludes: (i) a capital investment in the Power segment related to the new, state-of-the-art naval facility principally for DRG; (ii) a voluntary contribution to the Companys corporate defined benefit pension plan made in the first quarter of 2020; and (iii) the cash impact from restructuring in 2020. The Corporation discloses free cash flow conversion because it measures the proportion of net earnings converted into free cash flow and is defined as free cash flow divided by net earnings from continuing operations. Adjusted free cash flow conversion is defined as Adjusted free cash flow divided by Adjusted net earnings.

CURTISS-WRIGHT CORPORATION and SUBSIDIARIES

NON-GAAP FINANCIAL DATA (UNAUDITED)

($’s in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2020

 

2019

 

2020

 

2019

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

55,993

 

 

$

118,629

 

 

$

3,784

 

 

$

159,015

 

Capital expenditures

(7,017)

 

 

(16,448)

 

 

(36,341)

 

 

(49,919)

 

Free cash flow

$

48,976

 

 

$

102,181

 

 

$

(32,557)

 

 

$

109,096

 

Voluntary pension contribution

 

 

 

 

 

150,000

 

 

 

Adjustment to capital expenditures (DRG facility investment)

 

437

 

 

4,824

 

 

10,112

 

 

13,986

 

Restructuring

 

5,935

 

 

 

 

10,676

 

 

 

Adjusted free cash flow

$

55,348

 

 

$

107,005

 

 

$

138,231

 

 

$

123,082

 

Adjusted free cash flow conversion

71

%

 

130

%

 

73

%

 

56

%

CURTISS-WRIGHT CORPORATION
2020 Guidance
As of October 28, 2020
($’s in millions, except per share data)
2019 Reported (GAAP) 2019 Adjustments (1) (Non GAAP) 2019 Adjusted (Non GAAP) 2020 Reported Guidance (GAAP) 2020 Restructuring Adjustments (2) (Non-GAAP) 2020 Other Adjustments (2) (Non-GAAP)

2020 Adjusted Guidance(3)(4)(5) (Non-GAAP)

Low High Low High 2020 Chg vs 2019 Adjusted
Sales:
Commercial/Industrial

$

1,138

 

$

 

$

1,138

 

$

945

 

$

965

 

$

 

$

 

$

945

 

$

965

 

Defense

 

626

 

 

2

 

 

628

 

 

690

 

 

700

 

 

 

 

 

 

690

 

 

700

 

Power

 

724

 

 

 

 

724

 

 

725

 

 

735

 

 

 

 

 

 

725

 

 

735

 

Total sales

$

2,488

 

$

2

 

$

2,490

 

$

2,360

 

$

2,400

 

$

 

$

 

$

2,360

 

$

2,400

 

(4 to 5%)
 
Operating income:
Commercial/Industrial

$

180

 

$

 

$

180

 

$

111

 

$

115

 

$

20

 

$

2

 

$

133

 

$

137

 

Defense

 

137

 

 

2

 

 

140

 

 

142

 

 

145

 

 

4

 

 

13

 

 

159

 

 

162

 

Power

 

122

 

 

4

 

 

126

 

 

112

 

 

114

 

 

11

 

 

3

 

 

126

 

 

128

 

Total segments

 

439

 

 

7

 

 

446

 

 

365

 

 

375

 

 

35

 

 

18

 

 

418

 

 

428

 

Corporate and other

 

(35

)

 

 

 

(35

)

 

(37

)

 

(38

)

 

 

 

 

 

(37

)

 

(38

)

Total operating income

$

404

 

$

7

 

$

411

 

$

328

 

$

337

 

$

35

 

$

18

 

$

381

 

$

390

 

(5 to 7%)
 
Interest expense

$

(31

)

$

 

$

(31

)

$

(35

)

$

(36

)

$

 

$

 

$

(35

)

$

(36

)

Other income, net

 

24

 

 

 

 

24

 

 

12

 

 

12

 

 

 

 

10

 

 

22

 

 

22

 

Earnings before income taxes

 

397

 

 

 

7

 

 

403

 

 

 

306

 

 

 

314

 

 

 

35

 

 

27

 

 

 

368

 

 

377

 

 

Provision for income taxes

 

(89

)

 

(2

)

 

(90

)

 

(72

)

 

(74

)

 

(8

)

 

(6

)

 

(87

)

 

(88

)

Net earnings

$

308

 

$

5

 

$

313

 

$

234

 

$

240

 

$

27

 

$

21

 

$

282

 

$

288

 

 
Diluted earnings per share

$

7.15

 

$

0.12

 

$

7.27

 

$

5.56

 

$

5.71

 

$

0.64

 

$

0.50

 

$

6.70

 

$

6.85

 

(6 to 8%)
Diluted shares outstanding

 

43.0

 

 

43.0

 

 

42.1

 

 

42.1

 

 

42.1

 

 

42.1

 

Effective tax rate

 

22.4

%

 

22.4

%

 

23.5

%

 

23.5

%

 

23.5

%

 

23.5

%

 
Operating margins:
Commercial/Industrial

 

15.8

%

 

 

 

15.8

%

 

11.7

%

 

12.0

%

+210 bps +20 bps

 

14.0

%

 

14.2

%

(150 to 180 bps)
Defense

 

21.9

%

+40 bps

 

22.3

%

 

20.6

%

 

20.8

%

+60 bps +190 bps

 

23.1

%

 

23.2

%

80 to 90 bps
Power

 

16.9

%

+50 bps

 

17.4

%

 

15.4

%

 

15.5

%

+150 bps +40 bps

 

17.3

%

 

17.4

%

(0 to 10 bps)
Total operating margin

 

16.2

%

+30 bps

 

16.5

%

 

13.9

%

 

14.1

%

+150 bps +70 bps

 

16.1

%

 

16.3

%

(20 to 40 bps)
 
Free cash flow (6)

$

352

 

$

19

 

$

371

 

$

167

 

$

197

 

$

20

 

$

163

 

$

350

 

$

380

 

Notes: Full year amounts may not add due to rounding. All financial information by reportable segment for the 2019 and reporting periods reflects the Corporations first quarter segment reorganization.

(1) 2019 Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding the impact of first year purchase accounting costs associated with acquisitions (Defense segment), specifically one-time backlog amortization and transaction costs, as well as one-time transition and IT security costs related to the relocation of the DRG business (Power Segment).
(2) Adjusted financials are defined as Reported Operating Income, Operating Margin, Net Income and Diluted EPS under GAAP excluding $35 million in restructuring costs, $11 million in first year purchase accounting costs, specifically one-time backlog amortization and transaction costs associated with acquisitions, $4 million non-cash impairment of capitalized development costs related to a commercial aerospace program, and $3 million in one-time transition and IT security costs related to the relocation of the DRG business, as well as a $10 million non-cash currency translation loss (within non-operating income) related to the liquidation of a foreign legal entity.
(3) Commercial/Industrial segment Adjusted guidance excludes $20 million in restructuring costs and $2 million in one-time backlog amortization and transaction costs associated with the acquisition of Dyna-Flo.
(4) Defense segment Adjusted guidance excludes $4 million in restructuring costs, $9 million in one-time backlog amortization and transaction costs associated with the acquisitions of 901D and IADS, and $4 million non-cash impairment of capitalized development costs related to a commercial aerospace program.
(5) Power segment Adjusted guidance excludes $11 million in restructuring costs and $3 million in one-time transition and IT security costs related to the relocation of the DRG business.
(6) Free Cash Flow is defined as cash flow from operations less capital expenditures. 2019 Adjusted Free Cash Flow excludes a $19 million capital investment in the Power segment related to construction of a new, state-of-the-art naval facility for the DRG business. Adjusted Free Cash Flow guidance excludes a $150 million voluntary contribution made in January to the Companys corporate defined benefit pension plan, a $20 million cash impact from restructuring, and a $13 million capital investment related to the new, state-of-the-art naval facility principally for DRG.
CURTISS-WRIGHT CORPORATION
As of October 28, 2020
 
2020 % Change vs 2019
(Prior) (Current)
Defense Markets
Aerospace

4 – 6%

 

8 – 10%

Ground

(5 – 7%)

 

(5 – 7%)

Navy

14 – 16%

 

17 – 19%

Total Defense

8 – 10%

 

11 – 13%

 

 

 

Commercial Markets

 

 

 

Commercial Aerospace

(19 – 21%)

 

(22 – 24%)

Power Generation

(3 – 5%)

 

(8 – 10%)

General Industrial

(18 – 20%)

 

(18 – 20%)

Total Commercial

(14 – 16%)

 

(16 – 18%)

 

 

 

Total Curtiss-Wright Sales

(4 – 6%)

 

(4 – 5%)

 

About Curtiss-Wright Corporation

Curtiss-Wright Corporation (NYSE: CW) is a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing reliable solutions through trusted customer relationships. The company employs approximately 8,300 people worldwide. For more information, visit www.curtisswright.com.

Certain statements made in this press release, including statements about future revenue, financial performance guidance, quarterly and annual revenue, net income, operating income growth, future business opportunities, cost saving initiatives, the successful integration of the Companys acquisitions, future cash flow from operations, and potential impacts of the COVID-19 pandemic are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”) and the Private Securities Litigation Reform Act of 1995. These statements present management’s expectations, beliefs, plans and objectives regarding future financial performance, and assumptions or judgments concerning such performance. Any discussions contained in this press release, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in the competitive marketplace and/or customer requirements; a change in government spending; an inability to perform customer contracts at anticipated cost levels; the impact of a global pandemic or national epidemic, and other factors that generally affect the business of aerospace, defense contracting, electronics, marine, and industrial companies. Such factors are detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and subsequent reports filed with the Securities and Exchange Commission.

This press release and additional information are available at www.curtisswright.com.

Jim Ryan

(704) 869-4621

[email protected]

News

Partnership to Fight Infectious Disease Urges Prioritization of National Pandemic Preparedness Strategy 

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The Partnership to Fight Infectious Disease (PFID) today sent an open letter to President-elect Joe Biden and his incoming administration to prioritize the buildout of a National Pandemic Preparedness Strategy. The Partnership is a group of patients, providers, health policy experts, community organizations, and business and labor groups that have joined together to raise awareness of threats posed by infectious disease, now a very stark reality in the U.S., as well as advance solutions to ensure future pandemic preparedness.

Amid this pandemic, which has already claimed more than 270,000 American lives, our country has witnessed firsthand the health, economic and societal impacts of national health emergencies. The need to improve pandemic preparedness now, in order to prevent or otherwise lessen the impact of current and future national health emergencies, has never been more apparent, wrote Ken Thorpe, PFID advisory board member and Chairman of the Partnership to Fight Chronic Disease.

In the detailed letter, also delivered to Senate Majority Leader Mitch McConnell and Speaker of the House Nancy Pelosi, the Partnership outlined the key elements required for a successful National Pandemic Preparedness Strategy:

  • Address the needs of front-line workers;
  • Address existing and growing public health threats associated with pandemics;
  • Address the current and growing crisis of antimicrobial resistance (AMR);
  • Support a health care infrastructure that ensures access for all and addresses challenges to achieving health equity; and
  • Encourage the public and private sectors to work collaboratively.

The Partnership stressed the clear need to deal with the current crisis but with a vision for how to optimize lessons learned to mitigate future risks. Among several ideas, the group highlighted the need to support investment in medical products critical to preventing future pandemics and ensuring that front line medical staff have all the resources they need to save lives, including life-saving antibiotics.

Further, the Partnership contends that the preparedness strategy must facilitate access to health care for Americas most vulnerable populations elevating the importance of investment in telehealth systems that enable patients to access medical are remotely. The letter also highlighted considerations to address the behavioral health impacts associated with infectious disease outbreaks and expressed that the strategy should also be supported with a national communications plan to disseminate consistent, credible information about ongoing and emerging public health threats.

Without effective planning, we may one day face an infectious disease crisis even more deadly and disruptive than COVID-19, concluded Thorpe.

Read the full letter here.

To learn more about the Partnership to Fight Infectious Disease visit www.fightinfectiousdisease.org, on Twitter @ThePFID and LinkedIn.

The Partnership to Fight Infectious Disease (PFID) is a group of patients, providers, community organizations, business and labor groups, and health policy experts working to advance awareness and action on antimicrobial resistance. As an initiative of the Partnership to Fight Chronic Disease, PFID is focusing on the impact of this growing issue on our population and health care system.

Media Contact:

Jennifer Burke

[email protected]

301.801.9847

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SCHOTT Joins the NKBA Global Connect Program to Accelerate North American Growth

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SCHOTT, the inventor of specialty glass, has joined the National Kitchen & Bath Association (NKBA) Global Connect Subscription program to accelerate growth in North America. SCHOTT will tap into the NKBAs 50,000 strong membership to gain a stronger foothold in the kitchen and bath industry, leverage the programs expertise, and expand the companys opportunity to equip manufacturers with glass materials for current and future designs.

The NKBA Global Connect program will help SCHOTT deepen its ties with North American manufacturers and experts in the kitchen and bath industry, said Kathrin Becker, Marketing Director SCHOTT CERAN. Were honored to join the program and look forward to utilizing NKBAs deep-rooted expertise in this space.

SCHOTT introduced the first black glass-ceramic cooktop panels under the SCHOTT CERAN brand in 1971. Since, the company has manufactured and sold over 180 million units and made SCOTT AG a recognized consumer brand. SCHOTT CERAN is extremely durable and heat resistant, standing up to sudden temperature shocks in the range of up to 700 degrees Celsius without difficulty. Further, it puts up with the normal wear and tear of the kitchen and everyday cooking without losing any of its stability, which makes for a pleasant cooking experience.

The NKBA Global Connect Subscription program offers a robust package of resources and connections to help international brands enter the North American kitchen and bath marketplace. Access to industry experts, proprietary NKBA market data, North American design and construction insights, VIP events and networking programs give NKBA Global Connect Subscribers a unique view into the market before they commit to launch.

We are pleased to welcome the SCHOTT AG into the NKBA Global Connect program, said Suzie Williford, EVP and Chief Strategy Officer, NKBA. We have built an outstanding program, designed to help marketers navigate the vast North American kitchen and bath market and its exciting to see it embraced. SCHOTT CERAN brings a wealth of technological capabilities and partnerships that are sure to positively impact many aspects of the market.

About SCHOTT SCHOTT is a leading international technology group in the areas of specialty glass, glass-ceramics and related high-tech materials. With over 130 years of experience, the company is an innovative partner to many industries, including the home appliance, pharma, electronics, optics, life sciences, automotive and aviation industries. SCHOTT has a global presence with production sites and sales offices in 34 countries. In the 2018/2019 fiscal year, the group generated sales of around $2.54 billion with over 16,200 employees.

About NKBA Global Connect The NKBA Global Connect goal is to expand visibility of the NKBA and the Associations premier trade show event the Kitchen & Bath Industry Show (KBIS) internationally with design professionals, brands, influencers and other industry constituents. The initiative is designed to facilitate discussion on conducting business and participating in trade development events in North America and, conversely, in Europe and beyond for North American brands looking to extend their global footprint.

About the National Kitchen & Bath Association and the Kitchen & Bath Industry Show The National Kitchen & Bath Association (NKBA) is the not-for-profit trade association that owns the Kitchen & Bath Industry Show (KBIS), as part of Design & Construction Week (DCW). With nearly 50,000 members in all segments of the kitchen and bath and design and remodeling industry, the NKBA has educated and led the industry since the associations founding in 1963. The NKBA envisions a world where everyone enjoys safe, beautiful and functional kitchen and bath spaces. The mission of the NKBA is to inspire, lead and empower the kitchen and bath industry through the creations of certifications, specialty badges, marketplaces and networks. For more information, visit www.NKBA.org or call 1-800-THE-NKBA (843-6522).

KBIS and NKBA are registered trademarks of the National Kitchen & Bath Association.

SCHOTT North America, Inc.

Rina Della Vecchia

555 Taxter Road

Elmsford, NY 10523

USA

Phone: 914-831-2286

E-mail

https://www.us.schott.com

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News

Glancy Prongay & Murray LLP Reminds Investors of Looming Deadline in the Class Action Lawsuit Against JOYY Inc. (YY)

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Glancy Prongay & Murray LLP (GPM) reminds investors of the upcoming January 19, 2021 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased or otherwise acquired (JOYY or the Company) (NASDAQ: YY) securities between April 28, 2016 and November 18, 2020 inclusive (the Class Period).

If you suffered a loss on your JOYY investments or would like to inquire about potentially pursuing claims to recover your loss under the federal securities laws, you can submit your contact information at https://www.glancylaw.com/cases/joyy-inc/. You can also contact Charles H. Linehan, of GPM at 310-201-9150, Toll-Free at 888-773-9224, or via email at [email protected] to learn more about your rights.

On November 18, 2020, Muddy Waters Research published a report entitled “YY: You Can’t Make This Stuff Up. Well¦Actually You Can, alleging that the Company “is a multibillion-dollar fraud.” The report concluded that YY’s component businesses are a fraction of the size it reports, and that the company’s reported user metrics, revenues, and cash balances are predominantly fraudulent[,]” and that “[a]pproximately 84% of YY’s reported consolidated revenue appears to be fraudulent.”

On this news, JOYY American depositary shares (“ADSs”) price fell $26.53 per ADS, or 26%, to close at $73.66 per ADS on November 18, 2020.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Companys business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) JOYY dramatically overstated its revenues from live streaming sources; (2) the majority of users at any given time were bots; (3) the Company utilized these bots to effect a roundtripping scheme that manufactured the false appearance of revenues; (4) the Company overstated its cash reserves; (5) the Companys acquisition of Bigo was largely contrived to benefit corporate insiders; and (6) as a result, Defendants public statements were materially false and/or misleading at all relevant times.

Follow us for updates on LinkedIn, Twitter, or Facebook.

If you purchased or otherwise acquired JOYY securities during the Class Period, you may move the Court no later than January 19, 2021 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Charles Linehan, Esquire, of GPM, 1925 Century Park East, Suite 2100, Los Angeles, California 90067 at 310-201-9150, Toll-Free at 888-773-9224, by email to [email protected], or visit our website at www.glancylaw.com. If you inquire by email please include your mailing address, telephone number and number of shares purchased.

This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.

Glancy Prongay & Murray LLP, Los Angeles

Charles Linehan, 310-201-9150 or 888-773-9224

[email protected]

www.glancylaw.com

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Editorial & Advertiser disclosureOur website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
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