Woodward(US:WWD)2025-08-01 17:06PART I – FINANCIAL INFORMATION Financial Statements This section presents Woodward, Inc.'s unaudited Condensed Consolidated Financial Statements for the quarter ended June 30, 2025, including earnings, balance sheets, cash flows, and equity, with detailed accounting notes Condensed Consolidated Statements of Earnings Consolidated Earnings Summary (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $915,446 | $847,688 | $2,571,800 | $2,469,761 | | Earnings before income taxes | $126,836 | $122,096 | $361,653 | $352,440 | | Net earnings | $108,448 | $102,075 | $304,488 | $289,675 | | Diluted earnings per share | $1.76 | $1.63 | $4.96 | $4.65 | Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $473,159 | $282,270 | | Total current assets | $2,061,157 | $1,743,611 | | Total assets | $4,711,850 | $4,368,915 | | Total current liabilities | $1,010,198 | $923,510 | | Total liabilities | $2,243,284 | $2,192,499 | | Total stockholders' equity | $2,468,566 | $2,176,416 | Condensed Consolidated Statements of Cash Flows Cash Flow Summary (in thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $237,976 | $297,329 | | Net cash (used in) investing activities | $(27,518) | $(68,239) | | Net cash (used in) financing activities | $(26,126) | $(58,970) | | Net change in cash and cash equivalents | $190,889 | $170,885 | Notes to Condensed Consolidated Financial Statements Detailed notes disclose accounting policies, revenue recognition, segment performance, acquisitions, divestitures, and debt, highlighting revenue disaggregation and segment earnings analysis - On December 19, 2024, Woodward agreed to acquire Safran Electronics & Defense's electromechanical actuation business, which closed on July 21, 2025, for an aggregate cash consideration of $45,80966 - During the nine months ended June 30, 2025, the company sold certain product lines, including its heavy-duty gas turbine combustion parts, for cash proceeds of $48,043 and recognized a pretax gain of $20,52469 Revenue by Reportable Segment (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Aerospace | $595,990 | $517,560 | $1,651,601 | $1,475,828 | | Industrial | $319,456 | $330,128 | $920,199 | $993,933 | | Total | $915,446 | $847,688 | $2,571,800 | $2,469,761 | Segment Earnings (in thousands) | Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Aerospace | $125,740 | $101,842 | $345,081 | $279,295 | | Industrial | $47,622 | $59,717 | $133,786 | $191,842 | Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses Q3 2025 financial performance, noting an 8.0% consolidated net sales increase driven by Aerospace, offset by Industrial segment declines, and covers segment results, liquidity, and non-GAAP reconciliations Results of Operations Consolidated net sales increased 8.0% in Q3 and 4.1% year-to-date, driven by Aerospace growth and price realization, partially offset by Industrial segment declines and a nine-month gross margin decrease Change in Consolidated Net Sales (in thousands) | Description | Three-Month Period | Nine-Month Period | | :--- | :--- | :--- | | Net sales for period ended June 30, 2024 | $847,688 | $2,469,761 | | Aerospace volume | $32,955 | $47,836 | | Industrial volume | $(36,819) | $(118,441) | | Effects of changes in price | $62,308 | $171,243 | | Effects of changes in foreign currency rates | $9,314 | $1,401 | | Net sales for period ended June 30, 2025 | $915,446 | $2,571,800 | - The company has experienced and expects continued significant sales and earnings decreases in its China on-highway natural gas truck business in fiscal year 2025 compared to 2024138 - Selling, general, and administrative (SG&A) expenses increased 20.2% in Q3 2025 year-over-year, primarily due to higher project-related costs and payroll expenses143 Segment Results Aerospace segment net sales rose 15.2% in Q3 with earnings up 23.5%, while Industrial segment net sales decreased 3.2% with earnings down 20.3%, primarily due to China on-highway volume Aerospace Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $595,990 | $517,560 | $1,651,601 | $1,475,828 | | Segment Earnings | $125,740 | $101,842 | $345,081 | $279,295 | | Earnings as % of Sales | 21.1% | 19.7% | 20.9% | 18.9% | Industrial Segment Performance | Metric | Q3 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $319,456 | $330,128 | $920,199 | $993,933 | | Segment Earnings | $47,622 | $59,717 | $133,786 | $191,842 | | Earnings as % of Sales | 14.9% | 18.1% | 14.5% | 19.3% | Liquidity and Capital Resources As of June 30, 2025, the company held $473.2 million in cash and $932.9 million in debt, with operating cash flow decreasing to $238.0 million and free cash flow to $159.4 million due to increased working capital Key Liquidity Metrics (as of June 30, 2025) | Metric | Amount (in thousands) | | :--- | :--- | | Cash and cash equivalents | $473,159 | | Total outstanding debt | $932,871 | | Borrowing availability under revolving credit facility | $639,138 | Free Cash Flow Reconciliation (in thousands) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities (U.S. GAAP) | $237,976 | $297,329 | | Payments for property, plant and equipment | $(78,537) | $(72,193) | | Free cash flow (Non-U.S. GAAP) | $159,439 | $225,136 | - For the nine months ended June 30, 2025, the company repurchased $124.3 million of its common stock, compared to $304.8 million in the same period of the prior year176 Quantitative and Qualitative Disclosures About Market Risk Market risk exposures, including interest rate, foreign currency, and commodity price risks, remain materially unchanged from the prior Form 10-K disclosure - Market risks related to interest rates, foreign currency, and raw material costs have not materially changed since the last Form 10-K filing193 Controls and Procedures Disclosure controls and procedures were deemed effective as of June 30, 2025, with no material changes to internal controls over financial reporting during the quarter - Management, including the CEO and CFO, evaluated disclosure controls and procedures and concluded they were effective at a reasonable assurance level as of June 30, 2025196 - No material changes to internal controls over financial reporting occurred during the quarter ended June 30, 2025197 PART II – OTHER INFORMATION Legal Proceedings The company is involved in routine legal proceedings, which management expects will not materially impact financial condition or results of operations - The company is involved in routine litigation and claims, but management does not expect these to have a material financial impact199200 Risk Factors No material changes to the risk factors previously disclosed in the company's most recent Annual Report on Form 10-K have occurred - Risk factors disclosed in the most recent Form 10-K have not materially changed201 Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's equity security repurchases during Q3 fiscal 2025, totaling 231,046 shares under its authorized program Issuer Purchases of Equity Securities (April 1, 2025 - June 30, 2025) | Period | Total Shares Purchased | Weighted Avg. Price Paid | Approx. Dollar Value Remaining for Purchase | | :--- | :--- | :--- | :--- | | April 2025 | 108,208 | $173.95 | $110,892,000 | | May 2025 | 61,438 | $192.90 | $99,049,000 | | June 2025 | 61,400 | $230.35 | $84,905,000 | - In January 2024, the Board authorized a three-year, $600 million share repurchase program205 Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q3 fiscal 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans during the three months ended June 30, 2025205 Exhibits This section lists exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL financial data files - Exhibits filed include Rule 13a-14(a)/15d-14(a) certifications by the CEO and CFO, Section 1350 certifications, and Inline XBRL financial data208211