CURTISS WRIGHT CORP
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
CW$463.47+6.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-02.
0000026324-24-000012
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0000026324-24-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 67 previous paragraphs and 84 current paragraphs.
30 unchanged; 27 reworded; 24 added; 10 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (24)
Current report
During the quarter ended June 30, 2024, we commenced our 2024 Restructuring Program across all of our segments in an effort to improve operating efficiency. These actions, which primarily include workforce reductions, consolidation of facilities, and costs related to legal entity restructuring, resulted in pre-tax charges of approximately $4 million for the quarter and six months ended June 30, 2024. The Company anticipates that these actions, which are expected to be substantially completed by June 30, 2025, will result in annual operating cost savings of approximately $10 million.
Current report
Sales in the second quarter increased $80 million, or 11%, to $785 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $7 million, $31 million, and $42 million, respectively.
Current report
Operating incomein the second quarter increased $16 million, or 14%, to $129 million, while operating margin increased 40 basis points to 16.4% compared with the same period in 2023. Operating income and operating margin in the Defense Electronics segment benefited from favorable overhead absorption on higher sales, favorable mix on defense electronics and tactical communications products, as well as the benefit of cost containment initiatives. In the Aerospace & Industrial segment, operating income was essentially flat while operating margin decreased, asfavorable overhead absorption on higher sales was essentially offset by current period restructuring costs. In the Naval & Power segment, both operating income and operating margin decreased, as favorable overhead absorption on higher sales as well as the absence of first year purchase accounting costs from our arresting systems acquisition was more than offset by unfavorable product mix and the timing of development programs.
Current report
Other income, net in the second quarter andsix months ended June 30, 2024 increased $1 million, or 8%, to $9 million, and$2 million, or 16%, to $18 million, respectively, primarily due to lower overall pension costs against the comparable prior year periods.
Current report
The effective tax rate of 21.2% in the second quarter decreased compared to an effective tax rate of 23.4% in the prior year period. The effective tax rate of 21.9% for the six months ended June 30, 2024 decreased as compared to an effective tax rate of 23.1% in the prior year period. Decreases in both of the comparable periods were primarily due to the benefits of a legal entity restructuring as well as lower provisional tax expense associated with foreign withholding taxes in the current year.
Current report
•Net earnings increased $38 million, primarily due to higher operating income and lower interest expense.
Current report
New ordersin the second quarter increased $154 million from the comparable prior year period, primarily due to an increase in naval defense orders in the Naval & Power segment, as well as an increase in orders in the Aerospace & Industrial segment for sensors products and surface treatment services within our A&D markets. These increases were partially offset by the timing of orders within our A&D markets in the Defense Electronics segment.
Current report
Sales in the second quarter increased $7 million, or 3%, to $233 million from the prior year period. Sales in the commercial aerospace market benefited $9 million from higher OEM sales of sensors and actuation products, as well as surface treatment services, on narrowbody and widebody platforms. In the general industrial market, higher sales of surface treatment services were more than offset by reduced sales of industrial vehicle products to off-highway vehicle platforms.
Current report
Operating income in the second quarter of $35 million was essentially flat compared to the prior year period, while operating margin decreased 70 basis points to 15.1%, as favorable overhead absorption on higher sales was essentially offset by current period restructuring costs. Operating income during the six months ended June 30, 2024 increased $1 million, or 1%, to $63 million from the prior year period, while operating margin decreased 60 basis points to 13.9%, as favorable overhead absorption on higher sales was essentially offset by current period restructuring costs.
Current report
New orders in the second quarter and six months ended June 30, 2024 increased $31 million and $24 million, respectively, primarily due to an increase in orders for sensors products and surface treatment services within our A&D markets.
Current report
Sales during the six months ended June 30, 2024 increased $80 million, or 22%, to $440 million from the prior year period. In the ground defense market, sales increased $40 million primarily due to higher demand for tactical battlefield communications equipment. Sales in the aerospace defense market increased $32 million primarily due to higher demand for embedded computing equipment on various helicopter, fighter jet, and unmanned aerial vehicle programs. In the commercial aerospace market, sales benefited from higher OEM demand for avionics and electronics on various platforms.
Current report
Operating incomein the second quarter increased $15 million, or 35%, to $58 million compared to the prior year period, and operating margin increased 370 basis points from the prior year period to 25.5%. Operating income during the six months ended June 30, 2024 increased $40 million, or 60%, to $106 million, and operating margin increased 570 basis points from the prior year period to 24.2%. Increases in operating income and operating margin in both respective periods were primarily due to favorable overhead absorption on higher sales, favorable mix on defense electronics and tactical communications products, as well as the benefit of our cost containment initiatives.
Current report
New orders in the second quarter decreased $7 million primarily due to the timing of orders within our A&D markets.
Current report
Sales during the six months ended June 30, 2024 increased $59 million, or 11%, to $605 million from the prior year period. In the naval defense market, sales increased $28 million primarily due to higher demand on various submarine programs. Sales in the aerospace defense market benefited $16 million primarily due to higher demand for arresting systems equipment supp orting various domestic and international customers. In the power & process market, sales increased $14 million primarily due to higher commercial nuclear aftermarket sales supporting the maintenance of operating reactors in North America, partially offset by the wind-down on the China Direct AP1000 program.
Current report
Operating incomein the second quarter decreased $1 million, or 1%, to $46 million, and operating margin decreased 240 basis points from the prior year period to 14.3%, as favorable overhead absorption on higher sales as well as the absence of first year purchase accounting costs from our arresting systems acquisition was more than offset by unfavorable product mix and the timing of development programs.
Current report
New ordersin the second quarter and six months ended June 30, 2024 increased $130 million and $267 million, respectively, primarily due to an increase in naval defense orders.
Current report
Sales in the second quarter increased $76 million, or 16%, to $542 million against the comparable prior year period, primarily due to higher sales across all markets. Sales in the aerospace defense market increased primarily due to higher demand for both arresting systems equipment supporting various domestic and international customers as well as embedded computing equipment on various domestic and international helicopter programs. In the ground defense market, sales increased primarily due to higher demand for tactical battlefield communications equipment. Sales increases in the naval defense market were primarily due tohigher demand on various submarine programs. In the commercial aerospace market, sales increased primarily due tohigher demand for OEM sensors and actuation products, as well as surface treatment services, on narrowbody and widebody platforms.
Current report
Sales in the second quarter increased $4 million, or 2%, to $243 million. Sales in the power & process market primarily benefited from higher commercial nuclear aftermarket sales supporting the maintenance of operating reactors in the United States. In the general industrial market, higher sales of surface treatment services were more than offset by reduced sales of industrial vehicle products to off-highway vehicle platforms.
Current report
Sales during the six months ended June 30, 2024 increased $5 million, or 1%, to $465 million. Sales in the power & process market primarily benefited from higher commercial nuclear aftermarket sales supporting the maintenance of operating reactors in North America, partially offset by the wind-down on the China Direct AP1000 program. The general industrial market was negatively impacted by lower sales of industrial vehicle products to off-highway vehicle platforms.
Current report
Net cash provided by operating activities increased $46 million from the prior year period, primarily due to higher cash earnings and improved working capital.
Current report
Net cash used for investing activities increased $35 million from the prior year period, primarily due to our acquisition of WSC.
Current report
During the six months ended June 30, 2024, the Corporation used $25 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program. During the six months ended June 30, 2023, the Corporation used $24 million of cash to repurchase approximately 0.1 million outstanding shares under its share repurchase program.
Current report
Dividends
Current report
The Corporation made dividend payments of $8 million and $7 million during the six months ended June 30, 2024 and June 30, 2023, respectively. Additionally, beginning in the second quarter, the Corporation increased its quarterly dividend to $0.21 per share.
Removed paragraphs (10)
Previous report
Other income, net during the three months ended March 31, 2024 increased$2 million, or 24%, to$10 million, primarily due to lower pension costs during the current period.
Previous report
The effective tax rate for the three months ended March 31, 2024 of 22.7% was essentially flat compared to an effective tax rate of 22.6% in the comparable prior year period.
Previous report
Operating income during the three months ended March 31, 2024 increased $1 million, or 3%, to $27 million from the prior year period, while operating margin decreased 60 basis points to 12.5%, as favorable overhead absorption on higher sales was essentially offset by unfavorable mix on actuation products as well as the timing of development contracts.
Previous report
New orders during the three months ended March 31, 2024 decreased $6 million from the comparable prior year period, primarily due to the timing of aerospace defense orders.
Previous report
Operating income during the three months ended March 31, 2024 increased $25 million, or 106%, to $48 million, and operating margin increased 830 basis points from the prior year period to 22.7%, primarily due to favorable absorption on higher sales as well as favorable mix on defense electronics products.
Previous report
New orders increased$137 million during the three months ended March 31, 2024 from the comparable prior year period, primarily due to an increase in naval defense orders.
Previous report
Sales of $223 million during the three months ended March 31, 2024 were essentially flat against the comparable prior year period. In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors in the United States and Canada. This increase was essentially offset by lower sales of industrial automation productsand surface treatment services in the general industrial market.
Previous report
Net cash used in operating activities decreased $46 million from the prior year period, primarily due to higher current period cash earnings, lower current period tax payments, and a $10 million settlement payment made to Westinghouse Electric Company (WEC) in the prior year period to resolve all open claims and counterclaims under the AP1000 U.S. and China contracts.
Previous report
Net cash used in investing activities increased $2 million from the prior year period, primarily due to higher capital spending in the Defense Electronics segment during the current period.
Previous report
For the three months ended March 31, 2024 and March 31, 2023, the Corporation used $12 million of cash in each period to repurchase approximately 53,000 and 73,000 outstanding shares, respectively, under its share repurchase program.
Reworded paragraphs (27)
Previous wording
Except for historical information, this Quarterly Report on Form 10-Q may be deemed to contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to: (a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, liquidity requirements, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance and potential impacts from global supply chain disruptions, the inflationary environment, higher interest rates or deflation, labor shortages, and measures taken by governments and private industry in response, (d)statements of future economic performance and potential impacts due to the war between Russia and Ukraine as well as the Israel and Hamas war, and the related sanctions, (e) the effect of laws, rules, regulations, tax reform, new accounting pronouncements, and outstanding litigation on our business and future performance, and (f)statements of assumptions, such as economic conditions underlying other statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy. No assurance may be given that the future results described by the forward-looking statements will be achieved. While we believe these forward-looking statements are reasonable, they are only predictions and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, which could cause actual results, performance, or achievement to differ materially from anticipated future results, performance, or achievement expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” of our 2023 Annual Report on Form 10-K filed with the SEC, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission and other written or oral statements made or released by us. Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1. Financial Statements (including the Notes to Condensed Consolidated Financial Statements) and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Current wording
Except for historical information, this Quarterly Report on Form 10-Q may be deemed to contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, but are not limited to: (a) projections of or statements regarding return on investment, future earnings, interest income, sales, volume, other income, earnings or loss per share, growth prospects, capital structure, liquidity requirements, and other financial terms, (b) statements of plans and objectives of management, (c) statements of future economic performance, (d) impacts on our business relating to ongoing supply chain delivery disruptions, significant inflation, higher interest rates or deflation, and measures taken by governments and private industry in response, as well as related to the conflict between Russia and Ukraine and the Israel and Hamas War, and the related sanctions, (e) the effect of laws, rules, regulations, tax reform, new accounting pronouncements, and outstanding litigation on our business and future performance, and (f)statements of assumptions, such as economic conditions underlying other statements. Such forward-looking statements can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continue,” “could,” “estimate,” “expects,” “intend,” “may,” “might,” “outlook,” “potential,” “predict,” “should,” “will,” as well as the negative of any of the foregoing or variations of such terms or comparable terminology, or by discussion of strategy. No assurance may be given that the future results described by the forward-looking statements will be achieved. While we believe these forward-looking statements are reasonable, they are only predictions and are subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, which could cause actual results, performance, or achievement to differ materially from anticipated future results, performance, or achievement expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” of our 2023 Annual Report on Form 10-K filed with the SEC, and elsewhere in that report, those described in this Quarterly Report on Form 10-Q, and those described from time to time in our future reports filed with the Securities and Exchange Commission and other written or oral statements made or released by us. Such forward-looking statements in this Quarterly Report on Form 10-Q include, without limitation, those contained in Item 1. Financial Statements (including the Notes to Condensed Consolidated Financial Statements) and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Previous wording
Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions, and services mainly to A&D markets, as well as critical technologies in demanding commercial power, process, and industrial markets. We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments. We operate across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. Approximately 68% of our 2024 revenues are expected to be generated from A&D-related markets.
Current wording
Curtiss-Wright Corporation along with its subsidiaries is a global integrated business that provides highly engineered products, solutions, and services mainly to aerospace & defense markets, as well as critical technologies in demanding commercial power, process, and industrial markets. We report our operations through our Aerospace & Industrial, Defense Electronics, and Naval & Power segments. We operate across a diversified array of niche markets through engineering and technological leadership, precision manufacturing, and strong relationships with our customers. Approximately 68% of our 2024 revenues are expected to be generated from A&D-related markets.
Previous wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three months ended March 31, 2024. The financial information as of March 31, 2024 should be read in conjunction with the financial statements for the year ended December 31, 2023 contained in our Form 10-K filed with the SEC.
Current wording
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand the results of operations and financial condition of the Corporation for the three and six month periods ended June 30, 2024. The financial information as of June 30, 2024 should be read in conjunction with the financial statements for the year ended December 31, 2023 contained in our Form 10-K.
Previous wording
Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. The definition of “organic” excludes the effects of foreign currency translation.
Current wording
Throughout management’s discussion and analysis of financial condition and results of operations, the terms “incremental” and “organic” are used to explain changes from period to period. The term “incremental” is used to highlight the impact that acquisitions and divestitures had on the current year results. The results of operations for acquisitions are incremental for the first twelve months from the date of acquisition. The definition of “organic” excludes the effects of costs associated with our 2024 Restructuring Program and foreign currency translation.
Previous wording
Sales during the three months ended March 31, 2024 increased $82 million, or 13%, to $713 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $17 million, $49 million, and $16 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.
Current wording
Sales during the six months ended June 30, 2024 increased $163 million, or 12%, to $1,498 million, compared with the prior year period. On a segment basis, sales from the Aerospace & Industrial, Defense Electronics, and Naval & Power segments increased $24 million, $80 million, and $59 million, respectively. Changes in sales by segment are discussed in further detail in the results by business segment section below.
Previous wording
Operating income during the three months ended March 31, 2024 increased $21 million, or 27%, to $100 million, compared with the prior year period, while operating margin increased 150 basis points to 14.0%, compared with the same period in 2023. Increases in operating income and operating margin were primarily due to favorable absorption on higher sales as well as favorable mix on defense electronics products in the Defense Electronics segment. These increases were partially offset by an unfavorable naval contract adjustment in Naval & Power segment. In the Aerospace & Industrial segment, operating income was essentially flat while operating margin decreased, as favorable overhead absorption on higher sales was essentially offset by unfavorable mix on actuation products as well as the timing of development contracts.
Current wording
Operating income during the six months ended June 30, 2024 increased $37 million, or 20%, to $229 million, and operating margin increased 100 basis points to 15.3%, compared with the same period in 2023. In the Defense Electronics segment, increases in operating income and operating margin were primarily due to favorable overhead absorption on higher sales, favorable mix on defense electronics and tactical communications products, as well as the benefit of cost containment initiatives. In the Aerospace & Industrial segment, operating income increased while operating margin decreased, as favorable overhead absorption on higher sales was essentially offset by current period restructuring costs as well as unfavorable mix on actuation products. Both operating income and operating margin in the Naval & Power segment decreased, as favorable overhead absorption on higher sales as well as the absence of first year purchase accounting costs from our arresting systems acquisition was more than offset by an unfavorable naval contract adjustment as well as unfavorable product mix.
Previous wording
Non-segment operating expense during the three months ended March 31, 2024 increased $2 million, or 17%, to $11 million, primarily due to higher corporate costs.
Current wording
Non-segment operating expense in the second quarter decreased $2 million, or 15%, to $11 million, primarily due to lower foreign currency losses in the current period. Non-segment operating expense during the six months ended June 30, 2024 of $22 million was essentially flat against the comparable prior year period.
Previous wording
Interest expense decreased $2 million, or 18%, to$11 million, primarily due to lower borrowings under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”) as well as the repayment of our 2013 Notes in February 2023.
Current wording
Interest expense in the second quarter and six months ended June 30, 2024 decreased $4 million, or 25% to $11 million and $6 million, or 22%, to $22 million, respectively, primarily due to lower borrowings under our revolving Credit Agreement (the “Credit Agreement” or “credit facility”). Interest expense for the six months ended June 30, 2024 also benefited from the repayment of our 2013 Notes in February 2023.
Previous wording
•Net earnings increased $20 million, primarilydue to higher operating income.
Current wording
•Net earnings increased$18 million, primarily due to higher operating income and lower interest expense.
Previous wording
Comprehensive income for the three months ended March 31, 2024 was $61 million, compared to comprehensive income of $71 million in the prior year period. The change was primarily due to the following:
Current wording
Comprehensive income during the six months ended June 30, 2024 was $156 million, compared to comprehensive income of $171 million in the prior year period. The change was primarily due to the following:
Previous wording
•Foreign currency translation adjustments for the three months ended March 31, 2024 resulted in a $16 million comprehensive loss, compared to a $15 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the Canadian dollar and the British Pound.
Current wording
•Foreign currency translation adjustments for the six months ended June 30, 2024 resulted in a $21 million comprehensive loss, compared to a $34 million comprehensive gain in the prior period. The comprehensive loss during the current period was primarily attributed to decreases in the Canadian dollar and British Pound.
Previous wording
New orders increased $184 million during the three months ended March 31, 2024 from the comparable prior year period, primarily due to an increase in naval defense orders in the Naval & Power segment, as well as an increase in orders for defense electronics equipment, including embedded computing and tactical communications products, in the Defense Electronics segment. These increases were partially offset by the timing of aerospace defense orders in the Aerospace & Industrial segment. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.
Current wording
New orders during the six months ended June 30, 2024 increased $337 million from the comparable prior year period, primarily due to an increase in naval defense orders in the Naval & Power segment. New orders also benefited from an increase in orders for defense electronics equipment in the Defense Electronics segment as well as increase in orders for sensors products and surface treatment services within our A&D markets in the Aerospace & Industrial segment. Changes in new orders by segment are discussed in further detail in the "Results by Business Segment" section below.
Previous wording
Sales in the Aerospace & Industrial segment are primarily generated from the commercial aerospace and general industrial markets, and to a lesser extent the defense and power & process markets.
Current wording
Sales in the Aerospace & Industrial segment are primarily generated from the general industrial and aerospace & defense markets, and, to a lesser extent, the power & process markets.
Previous wording
Sales during the three months ended March 31, 2024 increased $17 million, or 8%, to $219 million from the prior year period. In the commercial aerospace market, sales increased $15 million primarily due to higher OEM sales of actuation and sensors products, as well as surface treatment services, on narrowbody and widebody platforms. Sales in the aerospace defense market benefited from higher actuation development on various fighter jet programs. These increases were partially offset by lower sales of industrial automation products and surface treatment services in the general industrial market.
Current wording
Sales during the six months ended June 30, 2024 increased $24 million, or 6%, to $453 million from the prior year period. In the commercial aerospace market, sales increased $24 million primarily due to higher OEM sales of sensors and actuation products, as well as surface treatment services, on narrowbody and widebody platforms. Sales in the aerospace defense market benefited from higher actuation development on various fighter jet programs. These increases were partially offset by lower sales in the general industrial market, primarily due to reduced sales of industrial vehicle products to off-highway vehicle platforms.
Previous wording
Sales during the three months ended March 31, 2024 increased $49 million, or 31%, to $212 million from the prior year period. In the ground defense market, sales increased $25 million primarily due to higher demand for tactical battlefield communications equipment. Sales in the aerospace defense market benefited $18 million primarily due to higher demand for embedded computing equipment on various fighter jet, unmanned aerial vehicle, and helicopter programs. In the commercial aerospace market, sales increased primarily due to higher OEM sales of avionics and electronics on various platforms.
Current wording
Sales in the second quarter increased $31 million, or 16%, to $228 million from the prior year period. In the ground defense market, sales increased $15 million primarily due to higher demand for tactical battlefield communications equipment. Sales in the aerospace defense market benefited $14 million primarily due to higher demand for embedded computing equipment on various domestic and international helicopter programs. In the commercial aerospace market, sales increased primarily due to higher OEM sales of avionics and electronics on various platforms.
Previous wording
New orders during the three months ended March 31, 2024 increased $53 million from the comparable prior year period, primarily due to an increase in orders for defense electronics equipment, including embedded computing and tactical communications products.
Current wording
New orders during the six months ended June 30, 2024 increased $46 million primarily due to an increase in orders for defense
Previous wording
Sales in the Naval & Power segment are primarily to the naval defense and power & process markets, and, to a lesser extent, the aerospace defense market.
Current wording
Salesin the Naval & Power segment are primarily to the naval defense and power & process markets, and, to a lesser extent, the aerospace defense market.
Previous wording
Sales during the three months ended March 31, 2024 increased $16 million, or 6%, to $282 million from the prior year period. In the aerospace defense market, sales increased $10 million primarily due to higher demand for arresting systems equipment supporting various domestic and international customers. In the power & process market, sales increased primarily due to higher nuclear aftermarket sales supporting the maintenance of existing operating reactors in the United States and Canada, partially offset by the wind-down on the China Direct AP1000 program. Sales in the naval defense market benefited from increased demand on the Columbia-class submarine program, partially offset by the timing of sales on the Virginia-class submarine and CVN-80 aircraft carrier programs.
Current wording
Sales in the second quarter increased $42 million, or 15%, to $323 million from the prior year period. In the naval defense market, sales increased $26 million primarily due to higher demand on various submarine programs, partially offset by the timing of sales on the CVN-80 aircraft carrier program. Sales in the power & process market benefited $9 million primarily due to higher commercial nuclear aftermarket sales supporting the maintenance of operating reactors in the United States. In the aerospace defense market, sales increases were primarily due to higher demand for arresting systems equipment supporting various domestic and international customers.
Previous wording
Operating income during the three months ended March 31, 2024 decreased$3 million, or 7%, to $35 million, and operating margin decreased 170 basis points from the prior year period to 12.5%, as favorable overhead absorption on higher sales was more than offset by an unfavorable naval contract adjustment.
Current wording
Operating income during the six months ended June 30, 2024 decreased $3 million, or 4%, to $81 million, and operating margin decreased 200 basis points from the prior year period to 13.5%, as favorable overhead absorption on higher sales as well as the absence of first year purchase accounting costs from our arresting systems acquisition was more than offset by an unfavorable naval contract adjustment as well as unfavorable product mix.
Previous wording
The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our operating results.
Current wording
The table below depicts sales by end market and customer type, as it helps provide an enhanced understanding of our businesses and the markets in which we operate. The table has been included to supplement the discussion of our consolidated operating results.
Previous wording
Sales during thethree months ended March 31, 2024 increased $82 million, or 20%, to $490 million, primarily due to higher sales across all markets. Sales in the aerospace defense market increased primarily due to higher demand for embedded computing equipment on various fighter jet, unmanned aerial vehicle, and helicopter programs, higher sales of arresting systems equipment supporting various domestic and international customers, and higher actuation development on various fighter jet programs. In the ground defense market, sales increased primarily due to higher demand for tactical battlefield communications equipment. Sales increases in the naval defense market were primarily due to increased demand on the Columbia-class submarine program, partially offset by the timing of sales on the Virginia-class submarine and CVN-80 aircraft carrier programs. In the commercial aerospace market, sales increased primarily due to higher OEM sales of actuation and sensors products, as well as surface treatment services, on narrowbody and widebody platforms.
Current wording
Sales during the six months ended June 30, 2024 increased $158 million, or 18%, to $1,032 million, primarily due to higher sales across all markets. Sales in the aerospace defense market increased primarily due to higher demand for both arresting systems equipment supporting various domestic and international customers as well as embedded computing equipment on various helicopter, fighter jet, and unmanned aerial vehicle programs. Sales in the ground defense market increased primarily due to higher demand for tactical battlefield communications equipment. Sales increases in the naval defense market were primarily due to higher demand on various submarine programs. Sales in the commercial aerospace market primarily benefited from higher demand for OEM sensors and actuation products, surface treatment services on narrowbody and widebody platforms, as well as OEM avionics and electronics on various platforms.
Previous wording
Net cash used in financing activities decreased $25 million from the prior year period, primarily due to the repayment of our 2013 Notes in February 2023. This decrease was partially offset by lower current period net borrowings under our credit facility. Refer to the "Financing Activities" section below for further details.
Current wording
Net cash used for financing activities decreased $77 million from the prior year period, primarily due to the repayment of our 2013 Notes in February 2023. This decrease was partially offset by lower current period net borrowings under our credit facility. Refer to the "Financing Activities" section below for further details.
Previous wording
The Corporation’s debt outstanding had an average interest rate of 3.8% and 4.4% for the three months ended March 31, 2024 and 2023, respectively. The Corporation’s average debt outstanding was $1,048 million and $1,129 million for the three months ended March 31, 2024 and 2023, respectively.
Current wording
The Corporation’s debt outstanding had an average interest rate of 3.8% for boththe three and six months ended June 30, 2024, respectively, and 4.1% and 4.0% for the three and six months ended June 30, 2023, respectively. The Corporation’s average debt outstanding was $1.0 billion for both the three and six months ended June 30, 2024, respectively, and $1.3 billion and $1.2 billion for the three and six months ended June 30, 2023, respectively.
Previous wording
As of March 31, 2024, the Corporation had approximately $19 million in letters of credit supported by the credit facility. The unused credit available under the credit facility as of March 31, 2024 was $731 million, which could be borrowed without violating any of our debt covenants.
Current wording
As of June 30, 2024, the Corporation had approximately $18 million in letters of credit supported by the Credit Agreement. The unused credit available under the Credit Agreement as of June 30, 2024 was $732 million, which could be borrowed without violating any of our debt covenants.
Previous wording
Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends to determine the most beneficial use of available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization, including the return of capital to shareholders through dividends and share repurchases and growing our business through acquisitions.
Current wording
Management continually evaluates cash utilization alternatives, including share repurchases, acquisitions, and increased dividends to determine the most beneficial use of available capital resources. We believe that our cash and cash equivalents, cash flow from operations, available borrowings under the credit facility, and ability to raise additional capital through the credit markets are sufficient to meet both the short-term and long-term capital needs of the organization.
Previous wording
As of the date of this report, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization limit of 60%. The debt to capitalization limit is a measure of our indebtedness (as defined in the notes purchase agreement and credit facility) to capitalization, where capitalization equals debt plus equity, and is the same for and applies to all of our debt agreements and credit facility.
Current wording
As of the date of this report, we were in compliance with all debt agreements and credit facility covenants, including our most restrictive covenant, which is our debt to capitalization limit of 60%. The debt to capitalization limit is a measure of our indebtedness (as defined per the notes purchase agreement and credit facility) to capitalization, where capitalization equals debt plus equity, and is the same for and applies to all of our debt agreements and credit facility.
Previous wording
As of March 31, 2024, we had the ability to borrow additional debt of approximately $2.4 billion without violating our debt to capitalization covenant.
Current wording
As of June 30, 2024, we had the ability to borrow additional debt of $2.6 billion without violating our debt to capitalization covenant.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Comprehensive incomein the second quarter was $94 million, compared to comprehensive income of $100 million in the prior year period. The change was primarily due to the following:
Current report — wording carried from elsewhere
•Foreign currency translation adjustments in the second quarter resulted in a $5 million comprehensive loss, compared to a $19 million comprehensive gain in the prior year period. The comprehensive loss during the current period was primarily attributed to decreases in the Canadian dollar and British Pound.
Current report — wording carried from elsewhere
electronics equipment, including embedded computing and tactical communications products.