[10-Q] Woodward, Inc. Quarterly Earnings Report
Starz Entertainment Corp. (STRZ) Form 4 filing shows Director Bruce Mann acquired 1,112 common shares on 30 Jul 2025. The shares were issued as director fees in the form of restricted share units and therefore carried a $0 purchase price. Following the grant, Mann’s direct beneficial ownership rose to 6,112 shares, implying a prior holding of roughly 5,000 shares. No derivative securities were reported.
- Transaction code: A (grant)
- Shares acquired represent approximately 18.2 % of his updated holdings
- No 10b5-1 trading plan was indicated
The filing reflects routine, non-cash compensation and does not disclose any sales, options, or additional material events.
La comunicazione Form 4 di Starz Entertainment Corp. (STRZ) mostra che il Direttore Bruce Mann ha acquisito 1.112 azioni ordinarie il 30 luglio 2025. Le azioni sono state emesse come compenso per il ruolo di direttore sotto forma di unità azionarie vincolate, pertanto hanno avuto un prezzo di acquisto pari a $0. Dopo questa assegnazione, la proprietà diretta di Mann è salita a 6.112 azioni, implicando un possesso precedente di circa 5.000 azioni. Non sono stati segnalati strumenti derivati.
- Codice della transazione: A (assegnazione)
- Le azioni acquisite rappresentano circa il 18,2% delle sue partecipazioni aggiornate
- Non è stato indicato alcun piano di trading 10b5-1
La comunicazione riflette una compensazione ordinaria non monetaria e non riporta vendite, opzioni o eventi materiali aggiuntivi.
La presentación del Formulario 4 de Starz Entertainment Corp. (STRZ) muestra que el Director Bruce Mann adquirió 1,112 acciones ordinarias el 30 de julio de 2025. Las acciones fueron emitidas como honorarios de director en forma de unidades restringidas, por lo que tuvieron un precio de compra de $0. Tras esta asignación, la propiedad directa de Mann aumentó a 6,112 acciones, lo que implica una tenencia previa de aproximadamente 5,000 acciones. No se reportaron valores derivados.
- Código de transacción: A (concesión)
- Las acciones adquiridas representan aproximadamente el 18.2% de sus participaciones actualizadas
- No se indicó ningún plan de negociación 10b5-1
La presentación refleja una compensación rutinaria no en efectivo y no revela ventas, opciones ni eventos materiales adicionales.
Starz Entertainment Corp. (STRZ)의 Form 4 제출서에 따르면 이사 Bruce Mann이 2025년 7월 30일에 1,112 보통주를 취득했습니다. 해당 주식은 이사 보수로 제한 주식 단위 형태로 발행되어 구매 가격이 $0이었습니다. 부여 후 Mann의 직접적 실소유 주식 수는 6,112주로 증가했으며, 이는 이전에 약 5,000주를 보유했음을 의미합니다. 파생 증권은 보고되지 않았습니다.
- 거래 코드: A (부여)
- 취득한 주식은 그의 최신 보유량의 약 18.2%에 해당
- 10b5-1 거래 계획은 표시되지 않음
이 제출서는 일상적인 비현금 보상을 반영하며 매도, 옵션 또는 추가 중요한 사건을 공개하지 않습니다.
Le dépôt du formulaire 4 de Starz Entertainment Corp. (STRZ) indique que le Directeur Bruce Mann a acquis 1 112 actions ordinaires le 30 juillet 2025. Les actions ont été émises en tant que rémunération de directeur sous forme d'unités d'actions restreintes, avec un prix d'achat de 0 $. Suite à cette attribution, la propriété directe de Mann est passée à 6 112 actions, ce qui implique une détention antérieure d'environ 5 000 actions. Aucun titre dérivé n'a été déclaré.
- Code de la transaction : A (attribution)
- Les actions acquises représentent environ 18,2 % de ses avoirs mis à jour
- Aucun plan de trading 10b5-1 n'a été indiqué
Le dépôt reflète une rémunération non monétaire de routine et ne révèle aucune vente, option ou événement matériel supplémentaire.
Die Form 4-Meldung von Starz Entertainment Corp. (STRZ) zeigt, dass Direktor Bruce Mann am 30. Juli 2025 1.112 Stammaktien erworben hat. Die Aktien wurden als Vergütung für die Tätigkeit als Direktor in Form von Restricted Share Units ausgegeben und hatten daher einen Kaufpreis von 0 $. Nach der Zuteilung stieg Manns direkte wirtschaftliche Eigentümerschaft auf 6.112 Aktien, was auf einen vorherigen Bestand von etwa 5.000 Aktien schließen lässt. Es wurden keine Derivate gemeldet.
- Transaktionscode: A (Gewährung)
- Die erworbenen Aktien machen etwa 18,2% seines aktualisierten Bestands aus
- Es wurde kein 10b5-1 Handelsplan angegeben
Die Meldung spiegelt eine routinemäßige, nicht monetäre Vergütung wider und enthält keine Angaben zu Verkäufen, Optionen oder weiteren wesentlichen Ereignissen.
- Director increased personal holdings, which can be viewed as a modest vote of confidence in STRZ.
- None.
Insights
TL;DR: Routine director fee grant; immaterial impact on STRZ float or valuation.
The 1,112-share award increases Bruce Mann’s direct stake to 6,112 shares, a small absolute position given Starz’s public float. Because the shares were granted at no cost, the transaction signals continued board participation rather than market-priced buying. No options or derivative activities were reported, limiting insight into future sale intentions. The absence of a 10b5-1 plan suggests flexibility in future dispositions, but size is too small to influence liquidity or governance dynamics. Overall, the filing is neutral for investors.
La comunicazione Form 4 di Starz Entertainment Corp. (STRZ) mostra che il Direttore Bruce Mann ha acquisito 1.112 azioni ordinarie il 30 luglio 2025. Le azioni sono state emesse come compenso per il ruolo di direttore sotto forma di unità azionarie vincolate, pertanto hanno avuto un prezzo di acquisto pari a $0. Dopo questa assegnazione, la proprietà diretta di Mann è salita a 6.112 azioni, implicando un possesso precedente di circa 5.000 azioni. Non sono stati segnalati strumenti derivati.
- Codice della transazione: A (assegnazione)
- Le azioni acquisite rappresentano circa il 18,2% delle sue partecipazioni aggiornate
- Non è stato indicato alcun piano di trading 10b5-1
La comunicazione riflette una compensazione ordinaria non monetaria e non riporta vendite, opzioni o eventi materiali aggiuntivi.
La presentación del Formulario 4 de Starz Entertainment Corp. (STRZ) muestra que el Director Bruce Mann adquirió 1,112 acciones ordinarias el 30 de julio de 2025. Las acciones fueron emitidas como honorarios de director en forma de unidades restringidas, por lo que tuvieron un precio de compra de $0. Tras esta asignación, la propiedad directa de Mann aumentó a 6,112 acciones, lo que implica una tenencia previa de aproximadamente 5,000 acciones. No se reportaron valores derivados.
- Código de transacción: A (concesión)
- Las acciones adquiridas representan aproximadamente el 18.2% de sus participaciones actualizadas
- No se indicó ningún plan de negociación 10b5-1
La presentación refleja una compensación rutinaria no en efectivo y no revela ventas, opciones ni eventos materiales adicionales.
Starz Entertainment Corp. (STRZ)의 Form 4 제출서에 따르면 이사 Bruce Mann이 2025년 7월 30일에 1,112 보통주를 취득했습니다. 해당 주식은 이사 보수로 제한 주식 단위 형태로 발행되어 구매 가격이 $0이었습니다. 부여 후 Mann의 직접적 실소유 주식 수는 6,112주로 증가했으며, 이는 이전에 약 5,000주를 보유했음을 의미합니다. 파생 증권은 보고되지 않았습니다.
- 거래 코드: A (부여)
- 취득한 주식은 그의 최신 보유량의 약 18.2%에 해당
- 10b5-1 거래 계획은 표시되지 않음
이 제출서는 일상적인 비현금 보상을 반영하며 매도, 옵션 또는 추가 중요한 사건을 공개하지 않습니다.
Le dépôt du formulaire 4 de Starz Entertainment Corp. (STRZ) indique que le Directeur Bruce Mann a acquis 1 112 actions ordinaires le 30 juillet 2025. Les actions ont été émises en tant que rémunération de directeur sous forme d'unités d'actions restreintes, avec un prix d'achat de 0 $. Suite à cette attribution, la propriété directe de Mann est passée à 6 112 actions, ce qui implique une détention antérieure d'environ 5 000 actions. Aucun titre dérivé n'a été déclaré.
- Code de la transaction : A (attribution)
- Les actions acquises représentent environ 18,2 % de ses avoirs mis à jour
- Aucun plan de trading 10b5-1 n'a été indiqué
Le dépôt reflète une rémunération non monétaire de routine et ne révèle aucune vente, option ou événement matériel supplémentaire.
Die Form 4-Meldung von Starz Entertainment Corp. (STRZ) zeigt, dass Direktor Bruce Mann am 30. Juli 2025 1.112 Stammaktien erworben hat. Die Aktien wurden als Vergütung für die Tätigkeit als Direktor in Form von Restricted Share Units ausgegeben und hatten daher einen Kaufpreis von 0 $. Nach der Zuteilung stieg Manns direkte wirtschaftliche Eigentümerschaft auf 6.112 Aktien, was auf einen vorherigen Bestand von etwa 5.000 Aktien schließen lässt. Es wurden keine Derivate gemeldet.
- Transaktionscode: A (Gewährung)
- Die erworbenen Aktien machen etwa 18,2% seines aktualisierten Bestands aus
- Es wurde kein 10b5-1 Handelsplan angegeben
Die Meldung spiegelt eine routinemäßige, nicht monetäre Vergütung wider und enthält keine Angaben zu Verkäufen, Optionen oder weiteren wesentlichen Ereignissen.
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
or
For the transition period from _____ to _____
Commission file number
(Exact name of registrant as specified in its charter)
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(b) of the Act:
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Trading Symbol(s) |
Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of July 31, 2025,
TABLE OF CONTENTS
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PART I – FINANCIAL INFORMATION |
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Item 1. |
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Financial Statements |
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1 |
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Condensed Consolidated Statements of Earnings |
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Condensed Consolidated Statements of Comprehensive Earnings |
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Condensed Consolidated Balance Sheets |
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Condensed Consolidated Statements of Cash Flows |
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Condensed Consolidated Statements of Stockholders’ Equity |
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Notes to Condensed Consolidated Financial Statements |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Forward Looking Statements |
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Overview |
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Results of Operations |
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Liquidity and Capital Resources |
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Item 3. |
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Quantitative and Qualitative Disclosures About Market Risk |
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Item 4. |
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Controls and Procedures |
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PART II – OTHER INFORMATION |
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Item 1. |
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Legal Proceedings |
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Item 1A. |
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Risk Factors |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 5. |
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Other Information |
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Item 6. |
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Exhibits |
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42 |
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Signatures |
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PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
WOODWARD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands, except per share amounts)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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June 30, |
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June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net sales |
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$ |
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$ |
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$ |
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$ |
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Costs and expenses: |
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Cost of goods sold |
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Selling, general and administrative expenses |
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Research and development costs |
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Interest expense |
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Interest income |
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Other (income) expense, net |
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Total costs and expenses |
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Earnings before income taxes |
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Income tax expense |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Earnings per share: |
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Basic earnings per share |
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$ |
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$ |
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$ |
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$ |
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Diluted earnings per share |
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$ |
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$ |
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$ |
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$ |
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Weighted Average Common Shares Outstanding: |
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Basic |
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Diluted |
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See accompanying Notes to Condensed Consolidated Financial Statements
1
WOODWARD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(In thousands)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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June 30, |
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June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net earnings |
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$ |
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$ |
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$ |
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$ |
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Other comprehensive earnings: |
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Foreign currency translation adjustments |
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Net (loss) gain on foreign currency transactions designated as hedges of net investments in foreign subsidiaries |
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Taxes on changes in foreign currency translation adjustments |
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Foreign currency translation and hedge transactions adjustments, net of tax |
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Unrealized (loss) gain on fair value adjustment of derivative instruments |
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Reclassification of net realized losses (gain) on derivatives to earnings |
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Taxes on changes in derivative transactions |
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— |
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— |
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Derivative adjustments, net of tax |
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Amortization of pension and other postretirement plan: |
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Net prior service cost |
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Net (gain) |
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Foreign currency exchange rate changes on pension and other postretirement benefit plan liabilities |
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Taxes on changes in pension and other postretirement benefit plan liability adjustments, net of foreign currency exchange rate changes |
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Pension and other postretirement benefit plan adjustments, net of tax |
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Total comprehensive earnings |
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$ |
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$ |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
2
WOODWARD, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
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June 30, |
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September 30, |
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2025 |
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2024 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, less allowance for uncollectible amounts of $ |
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Inventories |
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Income taxes receivable |
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Other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Goodwill |
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Intangible assets, net |
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Deferred income tax assets |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Short-term debt |
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$ |
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$ |
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Current portion of long-term debt |
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Accounts payable |
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Income taxes payable |
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Accrued liabilities |
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Total current liabilities |
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Long-term debt, less current portion |
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Deferred income tax liabilities |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 22) |
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Stockholders' equity: |
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Preferred stock, par value $ |
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Common stock, par value $ |
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Additional paid-in capital |
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Accumulated other comprehensive losses |
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Deferred compensation |
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Retained earnings |
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Treasury stock at cost, |
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Treasury stock held for deferred compensation, at cost, |
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( |
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( |
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Total stockholders' equity |
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Total liabilities and stockholders' equity |
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$ |
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$ |
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See accompanying Notes to Condensed Consolidated Financial Statements
3
WOODWARD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
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Nine Months Ended June 30, |
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2025 |
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2024 |
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Cash flows from operating activities: |
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|
|
||
Net earnings |
|
$ |
|
|
$ |
|
||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Net (gain) on sales of assets and businesses |
|
|
( |
) |
|
|
( |
) |
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Trade accounts receivable |
|
|
( |
) |
|
|
|
|
Unbilled receivables (contract assets) |
|
|
( |
) |
|
|
( |
) |
Costs to fulfill a contract |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued liabilities |
|
|
|
|
|
|
||
Contract liabilities |
|
|
( |
) |
|
|
|
|
Income taxes |
|
|
( |
) |
|
|
( |
) |
Retirement benefit obligations |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
( |
) |
|
|
( |
) |
Net cash provided by operating activities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Payments for purchase of property, plant, and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of assets |
|
|
|
|
|
|
||
Proceeds from business divestitures |
|
|
|
|
|
|
||
Payments for short-term investments |
|
|
— |
|
|
|
( |
) |
Proceeds from sales of short-term investments |
|
|
|
|
|
|
||
Net cash (used in) investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Cash dividends paid |
|
|
( |
) |
|
|
( |
) |
Proceeds from sales of treasury stock |
|
|
|
|
|
|
||
Payments for repurchases of common stock |
|
|
( |
) |
|
|
( |
) |
Borrowings on revolving lines of credit and short-term borrowings |
|
|
|
|
|
|
||
Payments on revolving lines of credit and short-term borrowings |
|
|
( |
) |
|
|
( |
) |
Payments of long-term debt and finance lease obligations |
|
|
( |
) |
|
|
( |
) |
Net cash (used in) financing activities |
|
|
( |
) |
|
|
( |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
|
|
|
|
||
Net change in cash and cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents at beginning of year |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
See accompanying Notes to Condensed Consolidated Financial Statements
4
WOODWARD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
|
Stockholders' equity |
|
|||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Accumulated other comprehensive (loss) earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Common |
|
|
Additional |
|
|
Foreign |
|
|
Unrealized |
|
|
Minimum retirement benefit liability adjustments |
|
|
Total |
|
|
Deferred |
|
|
Retained |
|
|
Treasury |
|
|
Treasury |
|
|
Total stockholders' |
|
|||||||||||
Balances as of April 1, 2024 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
Net earnings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive earnings (loss), net of tax |
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
Cash dividends paid ($ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Purchase of treasury stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Sales of treasury stock |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common shares issued for benefit plans |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchases of stock by deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Distribution of stock from deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Balances as of June 30, 2024 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances as of April 1, 2025 |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||
Net earnings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive earnings (loss), net of tax |
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends paid ($ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Purchases of treasury stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Sales of treasury stock |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common shares issued for benefit plans |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchases of stock by deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Distribution of stock from deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Balances as of June 30, 2025 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
See accompanying Notes to Condensed Consolidated Financial Statements
5
WOODWARD, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
|
Stockholders' equity |
|
|||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
Accumulated other comprehensive (loss) earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Common stock |
|
|
Additional paid-in capital |
|
|
Foreign currency translation adjustments |
|
|
Unrealized derivative gains (losses) |
|
|
Minimum retirement benefit liability adjustments |
|
|
Total accumulated other comprehensive (loss) earnings |
|
|
Deferred compensation |
|
|
Retained earnings |
|
|
Treasury stock at cost |
|
|
Treasury stock held for deferred compensation |
|
|
Total stockholders' equity |
|
|||||||||||
Balances as of September 30, 2023 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
Net earnings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive earnings (loss), net of tax |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends paid ($ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Purchase of treasury stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Sales of treasury stock |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common shares issued for benefit plans |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchases of stock by deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Distribution of stock from deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Balances as of June 30, 2024 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balances as of September 30, 2024 |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||
Net earnings |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Other comprehensive earnings (loss), net of tax |
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Cash dividends paid ($ |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Purchases of treasury stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Sales of treasury stock |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Common shares issued for benefit plans |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Stock-based compensation |
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Purchases of stock by deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
Distribution of stock from deferred compensation |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
Balances as of June 30, 2025 |
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
See accompanying Notes to Condensed Consolidated Financial Statements
6
WOODWARD, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share amounts)
(Unaudited)
Note 1. Basis of presentation
The Condensed Consolidated Financial Statements of Woodward, Inc. (“Woodward” or the “Company”) as of June 30, 2025 and for the three and nine months ended June 30, 2025 and 2024, included herein, have not been audited by an independent registered public accounting firm. These unaudited Condensed Consolidated Financial Statements reflect all normal recurring adjustments that, in the opinion of management, are necessary to present fairly Woodward’s financial position as of June 30, 2025, and the statements of earnings, comprehensive earnings, cash flows, and changes in stockholders’ equity for the periods presented herein. The results of operations for the three and nine months ended June 30, 2025 and 2024 are not necessarily indicative of the operating results to be expected for other interim periods or for the full fiscal year. Dollar and share amounts contained in these unaudited Condensed Consolidated Financial Statements are in thousands, except per share amounts, unless otherwise noted.
The unaudited Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto included in Woodward’s most recent Annual Report on Form 10-K filed with the SEC and other financial information filed with the SEC.
Management is required to use estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, the reported revenues and expenses recognized during the reporting period, and certain financial statement disclosures, in the preparation of the unaudited Condensed Consolidated Financial Statements included herein. Significant estimates in these unaudited Condensed Consolidated Financial Statements include allowances for credit losses; net realizable value of inventories; variable consideration including customer rebates earned and payable and early payment discounts; warranty reserves; useful lives of property and identifiable intangible assets; the evaluation of impairments of property, intangible assets, and goodwill; the provision for income tax and related valuation reserves; the valuation of derivative instruments; assumptions used in the determination of the funded status and annual expense of pension and postretirement employee benefit plans; the valuation of stock compensation instruments granted to employees, board members and any other eligible recipients; estimates of incremental borrowing rates used when estimating the present value of future lease payments; assumptions used when including renewal options or non-exercise of termination options in lease terms; estimates of total lifetime sales used in the recognition of revenue associated with material rights and balance sheet classification of the related contract liability; estimates of total sales contract costs when recognizing revenue under the cost-to-cost method; and contingencies. Actual results could vary from Woodward’s estimates.
Note 2. New accounting standards
From time to time, the Financial Accounting Standards Board (“FASB”) or other standards setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”).
In November 2023, the FASB issued ASU 2023-07, "Improvements to Reportable Segment Disclosures." The purpose of ASU 2023-07 is to provide enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023 (fiscal year 2025 for Woodward), and interim periods within fiscal years beginning after December 15, 2024 (fiscal year 2026 for Woodward), with early adoption permitted, and are to be applied on a retrospective basis to all periods presented. Woodward is currently assessing the impact on its segment reporting disclosures.
In December 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures." The purpose of ASU 2023-09 is to provide enhanced disclosures surrounding income taxes by requiring consistent categories and greater disaggregation of information in the rate reconciliation, the disaggregation of income taxes paid by jurisdiction, as well as several other changes to the income tax disclosure. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024 (fiscal year 2026 for Woodward), with early adoption permitted, and is required to be applied prospectively with the option of retrospective application. Woodward is currently assessing the impact on its income tax disclosures.
7
In November 2024, the FASB issued ASU 2024-03, "Disaggregation of Income Statement Expenses." The purpose of ASU 2024-03 is to provide enhanced disclosures about significant expenses on the Consolidated Statement of Earnings. The amendments in ASU 2024-03 are effective for fiscal years beginning after December 15, 2026 (fiscal year 2028 for Woodward), and interim periods within fiscal years beginning after December 15, 2027 (fiscal year 2029 for Woodward), with early adoption permitted, and are to be applied either on a prospective basis to financial statements issued for reporting periods after the effective date or on a retrospective basis to all periods presented. Woodward is currently assessing the impact on its Consolidated Statement of Earnings disclosures.
Note 3. Revenue
The amount of revenue recognized as point in time or over time were as follows:
|
|
Three Months Ended June 30, 2025 |
|
|
Three Months Ended June 30, 2024 |
|
||||||||||||||||||
|
|
Aerospace |
|
|
Industrial |
|
|
Consolidated |
|
|
Aerospace |
|
|
Industrial |
|
|
Consolidated |
|
||||||
Point in time |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Over time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
|
|
Nine Months Ended June 30, 2025 |
|
|
Nine Months Ended June 30, 2024 |
|
||||||||||||||||||
|
|
Aerospace |
|
|
Industrial |
|
|
Consolidated |
|
|
Aerospace |
|
|
Industrial |
|
|
Consolidated |
|
||||||
Point in time |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Over time |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Accounts Receivable
Accounts receivable consisted of the following:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Billed receivables |
|
|
|
|
|
|
||
Trade accounts receivable |
|
$ |
|
|
$ |
|
||
Other (Chinese financial institutions) |
|
|
|
|
|
|
||
Total billed receivables |
|
|
|
|
|
|
||
Current unbilled receivables (contract assets) |
|
|
|
|
|
|
||
Total accounts receivable |
|
|
|
|
|
|
||
Less: Allowance for uncollectible amounts |
|
|
( |
) |
|
|
( |
) |
Total accounts receivable, net |
|
$ |
|
|
$ |
|
||
As of June 30, 2025, “Other assets” on the Condensed Consolidated Balance Sheets includes $
Accounts receivable in Woodward’s Condensed Consolidated Financial Statements represent the net amount expected to be collected, and an allowance for uncollectible amounts related to credit losses is established based on expected losses. Expected losses are estimated by reviewing specific customer accounts, taking into consideration accounts receivable aging, credit risk of the customers, and historical payment history, as well as current and forecasted economic conditions and other relevant factors.
The allowance for uncollectible amounts and change in expected credit losses for trade accounts receivable and unbilled receivables (contract assets) consisted of the following:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Balance, beginning |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Changes in estimates |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Write-offs |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other1 |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Balance, ending |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
8
Contract liabilities
Contract liabilities consisted of the following:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||
|
|
Current |
|
|
Noncurrent |
|
|
Current |
|
|
Noncurrent |
|
||||
Deferred revenue from material rights from JV formation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Deferred revenue from advanced invoicing and/or prepayments from customers |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liability related to customer supplied inventory |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Deferred revenue from material rights related to engineering and development funding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net contract liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Woodward recognized revenue of $
Remaining performance obligations
Remaining performance obligations related to the aggregate amount of the total contract transaction price of firm orders for which the performance obligation has not yet been recognized in revenue as of June 30, 2025 were $
Remaining performance obligations related to material rights that have not yet been recognized in revenue as of June 30, 2025 were $
Disaggregation of Revenue
Woodward designs, produces, and services reliable, efficient, low-emission, and high-performance energy control products for diverse applications in markets throughout the world. Woodward reports financial results for each of its reportable segments, Aerospace and Industrial, and further disaggregates its revenue from contracts with customers by primary market as Woodward believes this best depicts how the nature, amount, timing, and uncertainty of its revenue and cash flows are affected by economic factors.
Revenue by primary market for the Aerospace reportable segment were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Commercial OEM |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Commercial aftermarket |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Defense OEM |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Defense aftermarket |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Aerospace segment net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Revenue by primary market for the Industrial reportable segment were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Power generation |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Transportation |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Oil and gas |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total Industrial segment net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
9
|
|
Three Months Ended June 30, 2025 |
|
Three Months Ended June 30, 2024 |
Aerospace |
|
RTX Corporation, GE Aerospace, The Boeing Company |
|
RTX Corporation, GE Aerospace, The Boeing Company |
Industrial |
|
Rolls-Royce PLC, Caterpillar, Inc., Wärtsilä |
|
Weichai Power, Rolls-Royce PLC, GE Vernova, Inc. |
|
|
Nine Months Ended June 30, 2025 |
|
Nine Months Ended June 30, 2024 |
Aerospace |
|
RTX Corporation, GE Aerospace, The Boeing Company |
|
RTX Corporation, The Boeing Company, GE |
Industrial |
|
Rolls-Royce PLC, Caterpillar, Inc. |
|
Weichai Power, Rolls-Royce PLC |
On April 2, 2024, The General Electric Company ("GE") split into two separate companies, GE Aerospace and GE Vernova. During fiscal year 2024, we engaged in transactions with GE prior to its split, and subsequently engaged in transactions with both GE Aerospace and GE Vernova. Sales listed with "GE" represent the legacy General Electric Company, and any sales following the split are listed as GE Aerospace and GE Vernova as applicable.
Note 4. Earnings per share
Basic earnings per share is computed by dividing net earnings available to common stockholders by the weighted-average number of shares of common stock outstanding for the period.
Diluted earnings per share reflects the weighted-average number of shares outstanding after consideration of the dilutive effect of stock options, restricted stock, and performance stock units.
The following is a reconciliation of net earnings to basic earnings per share and diluted earnings per share:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net earnings |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of stock options; restricted and performance stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Diluted earnings per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following stock option grants and restricted stock awards were outstanding but were excluded from the computation of diluted earnings per share because their inclusion would have been anti-dilutive:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Restricted stock and option awards |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average price |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The weighted-average shares of common stock outstanding for basic and diluted earnings per share included the weighted-average treasury stock shares held for deferred compensation obligations of the following:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Weighted-average treasury stock shares held for deferred compensation obligations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
10
Note 5. Leases
Lessee arrangements
Woodward has entered into operating leases for certain facilities and equipment with terms in excess of one year under agreements that expire at various dates. Some leases require the payment of property taxes, insurance, maintenance costs, or other similar costs in addition to rental payments. Woodward has also entered into finance leases for equipment with terms in excess of one year under agreements that expire at various dates.
Lease-related assets and liabilities were as follows:
|
|
Classification on the Condensed Consolidated Balance Sheets |
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Assets: |
|
|
|
|
|
|
|
|
||
Operating lease |
|
Other assets |
|
$ |
|
|
$ |
|
||
Finance lease |
|
Property, plant, and equipment, net |
|
|
|
|
|
|
||
Total lease assets |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
|
||
Operating lease |
|
Accrued liabilities |
|
|
|
|
|
|
||
Finance lease |
|
Current portion of long-term debt |
|
|
|
|
|
|
||
Noncurrent liabilities: |
|
|
|
|
|
|
|
|
||
Operating lease |
|
Other liabilities |
|
|
|
|
|
|
||
Finance lease |
|
Long-term debt, less current portion |
|
|
|
|
|
|
||
Total lease liabilities |
|
|
|
$ |
|
|
$ |
|
||
Lease-related expenses were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Operating lease expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of finance lease assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest on finance lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term lease expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Lease-related supplemental cash flow information was as follows:
|
|
Nine Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
||
Operating cash flows for operating leases |
|
$ |
|
|
$ |
|
||
Operating cash flows for finance leases |
|
|
|
|
|
|
||
Financing cash flows for finance leases |
|
|
|
|
|
|
||
Right-of-use assets obtained in exchange for recorded lease obligations: |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
|
|
||
Finance leases |
|
|
|
|
|
— |
|
|
Lessor arrangements
Woodward has assessed its manufacturing contracts and concluded that certain of the contracts for the manufacture of customer products met the criteria to be considered a leasing arrangement (“embedded leases”) with Woodward as the lessor. The specific manufacturing contracts that met the criteria were those that utilized Woodward property, plant, and equipment and which are substantially (more than 90%) dedicated to the manufacturing of the product(s) for a single customer. Woodward has dedicated manufacturing lines with three of its customers representing embedded leases, all of which qualified as operating leases with undefined quantities of future customer purchase commitments.
11
Although Woodward expects to allocate some portion of future net sales to these customers to embedded lessor arrangements, it cannot provide expected future undiscounted lease payments from property, plant, and equipment leased to customers as of June 30, 2025. If, in the future, customers reduce purchases of related products from Woodward, the Company believes it will derive additional value from the underlying equipment by repurposing its use to support other customer arrangements.
Revenue from contracts with customers that included embedded operating leases, which is included in “Net sales” in the Condensed Consolidated Statements of Earnings, were $
The carrying amount of property, plant, and equipment leased to others through embedded leasing arrangements, included in “Property, plant, and equipment, net” on the Condensed Consolidated Balance Sheets, follows:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Property, plant, and equipment |
|
$ |
|
|
$ |
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant, and equipment, net |
|
$ |
|
|
$ |
|
||
Note 6. Joint venture
In fiscal year 2016, Woodward and GE, consummated the formation of a strategic joint venture (the “JV”). For purposes of the JV, GE has been acting through GE Aerospace since April 2024. The JV was formed to develop, manufacture, and support fuel systems for specified existing and all future GE commercial aircraft engines that produce thrust in excess of fifty thousand pounds. Woodward is accounting for its
Unamortized deferred revenue from material rights in connection with the JV formation included:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Accrued liabilities |
|
$ |
|
|
$ |
|
||
Other liabilities |
|
|
|
|
|
|
||
Amortization of the deferred revenue (material right) recognized as an increase to sales were $
Other income related to Woodward’s equity interest in the earnings of the JV were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Other income |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As part of the JV formation, GE pays contingent consideration to Woodward consisting of fifteen annual payments of $
Cash distributions to Woodward from the JV, recognized in “Other, net” in “Net cash provided by operating activities” on the Condensed Consolidated Statements of Cash Flows, were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Cash distributions |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net sales to the JV were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
12
Woodward net sales includes a reduction of $
The Condensed Consolidated Balance Sheets include “Accounts receivable” related to amounts the JV owed Woodward, “Accounts payable” related to amounts Woodward owed the JV, and “Other assets” related to Woodward’s net investment in the JV, as follows:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Accounts payable |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Note 7. Financial instruments and fair value measurements
The table below presents information about Woodward’s financial assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques Woodward utilized to determine such fair value.
|
|
At June 30, 2025 |
|
|
At September 30, 2024 |
|
||||||||||||||||||||||||||
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||||||
Financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Investments in banks and financial institutions |
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
||||
Equity securities |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Total financial assets |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cross-currency interest rate swaps |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Total financial liabilities |
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Investments in banks and financial institutions: Woodward and its subsidiaries sometimes invest excess cash in various highly liquid financial instruments that Woodward believes are with creditworthy financial institutions. Such investments are reported in “Cash and cash equivalents” at fair value, with realized gains from interest income recognized in earnings. The carrying value of Woodward’s investments in term deposits with foreign banks are considered equal to the fair value given the highly liquid nature of the investments.
Equity securities: Woodward holds marketable equity securities, through investments in various mutual funds, related to its deferred compensation program. Based on Woodward’s intentions regarding these instruments, marketable equity securities are classified as trading securities. The trading securities are reported at fair value, with realized gains and losses recognized in “Other (income) expense, net” on the Condensed Consolidated Statements of Earnings. The trading securities are included in “Other assets” in the Condensed Consolidated Balance Sheets. The fair values of Woodward’s trading securities are based on the quoted market prices for the net asset value of the various mutual funds.
Cross-currency interest rate swaps: Woodward holds cross-currency interest rate swaps, which are accounted for at fair value. The swaps in an asset position are included in “Other current assets” and “Other assets,” and swaps in a liability position are included in “Accrued liabilities” and “Other liabilities” in the Condensed Consolidated Balance Sheets. The fair values of Woodward’s cross-currency interest rate swaps are determined using a market approach that is based on observable inputs other than quoted market prices, including contract terms, interest rates, currency rates, and other market factors.
Cash, trade accounts receivable, accounts payable, and short-term borrowings are not remeasured to fair value, as the carrying cost of each approximates its respective fair value.
13
The estimated fair values and carrying costs of other financial instruments that are not required to be remeasured at fair value in the Condensed Consolidated Balance Sheets were as follows:
|
|
|
|
At June 30, 2025 |
|
|
At September 30, 2024 |
|
||||||||||
|
|
Fair Value |
|
Estimated |
|
|
Carrying |
|
|
Estimated |
|
|
Carrying |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Notes receivable from municipalities |
|
2 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Investments in short-term time deposits |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Long-term debt |
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
In connection with certain economic incentives related to Woodward’s development of a second campus in the greater Rockford, Illinois area for its Aerospace segment and Woodward’s development of its corporate headquarters in Fort Collins, Colorado, Woodward received long-term notes from municipalities within the states of Illinois and Colorado. The fair value of the long-term notes were estimated based on a model that discounted future principal and interest payments received at an interest rate available to Woodward at the end of the period for similarly rated municipal notes of similar maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The interest rates used to estimate the fair value of the long-term notes were
From time to time, certain of Woodward’s foreign subsidiaries will invest excess cash in short-term time deposits with a fixed maturity date of longer than three months but less than one year from the date of the deposit. Woodward believes that the investments are with creditworthy financial institutions. The fair value of the investments in short-term time deposits were estimated based on a model that discounted future principal and interest payments to be received at an interest rate available to the foreign subsidiary entering into the investment for similar short-term time deposits of similar maturity. This was determined to be a level 2 input as defined by the U.S. GAAP fair value hierarchy. The interest rates used to estimate the fair value of the short-term time deposits were
The fair value of long-term debt was estimated based on a model that discounted future principal and interest payments at interest rates available to the Company at the end of the period for similar debt of the same maturity, which is a level 2 input as defined by the U.S. GAAP fair value hierarchy. The weighted-average interest rates used to estimate the fair value of long-term debt were
Woodward does not have expected credit losses related to any financial assets that are not required to be remeasured at fair value.
Note 8. Derivative instruments and hedging activities
Derivative instruments not designated or qualifying as hedging instruments
In May 2020, Woodward entered into
Derivative instruments in cash flow hedging relationships
In May 2020, Woodward entered into
14
in the fair values of the derivative instruments are recognized in accumulated OCI and reclassified to foreign currency transaction gain or loss included in “Selling, general and administrative expenses” in Woodward’s Condensed Consolidated Statements of Earnings. Reclassifications out of accumulated OCI of the change in fair value occur each reporting period based upon changes in the spot rate remeasurement of the Euro and U.S. dollar denominated intercompany loans, including associated interest. During the three months ended June 30, 2025, the first of the five 2020 Fixed-Rate Cross-Currency Swaps expired and, as such, is no longer recorded on the Condensed Consolidated Balance Sheets. During the nine months ended June 30, 2025, $
Derivatives instruments in net investment hedging relationships
On
Impact of derivative instruments designated as qualifying hedging instruments
The following table discloses the amounts recognized in relation to the cash flow hedges designated as qualifying hedging instruments:
|
|
|
|
Three months ended June 30, |
|
|
Nine months ended June 30, |
|
||||||||||
Derivatives in: |
|
Location |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Expense (income) recognized and loss (gain) reclassified from accumulated OCI into earnings |
|
Selling, general and administrative expenses |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Loss (gain) recognized in accumulated OCI |
|
Selling, general and administrative expenses |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
The remaining unrecognized gains and losses in Woodward’s Condensed Consolidated Balance Sheets associated with derivative instruments that were previously entered into by Woodward, which are classified in accumulated OCI, were net losses of $
Note 9. Supplemental statement of cash flows information
|
|
Nine Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Income taxes paid |
|
|
|
|
|
|
||
Income tax refunds received |
|
|
|
|
|
|
||
Non-cash activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment on account |
|
|
|
|
|
|
||
Common shares issued from treasury to settle benefit obligations |
|
|
|
|
|
|
||
Receivables related to business divestitures |
|
|
|
|
|
— |
|
|
15
Note 10. Acquisitions and Divestitures
Acquisitions
On
As the Closing was completed subsequent to June 30, 2025, we have not yet completed the accounting for the business combination, including the opening balance sheet. Accordingly, the Company is unable to provide amounts recognized as of the acquisition dates for major classes of assets and liabilities. This information, at least on a provisional basis, will be available in the Form 10-K to be filed for the year ended September 30, 2025.
Divestitures
The Company periodically reviews its business and from time to time may sell businesses, assets, or product lines as part of business rationalization. Any gain or loss recognized due to divestitures is recorded within the line item “Other (income) expense, net” in the Condensed Consolidated Statements of Earnings.
In connection with certain product rationalization activities, during the nine months ended June 30, 2025, the Company sold certain product lines and its heavy-duty gas turbine combustion parts product line, included in the Industrial segment, to third parties. The Company received cash proceeds of $
The sale of the heavy-duty gas turbine combustion parts product line was completed on
|
|
March 31, 2025 |
|
|
Assets: |
|
|
|
|
Inventories |
|
$ |
|
|
Property, plant, and equipment |
|
|
|
|
Goodwill |
|
|
|
|
Intangible assets |
|
|
|
|
Other assets |
|
|
|
|
Total assets |
|
$ |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
Accrued liabilities |
|
$ |
|
|
Accounts payable |
|
|
|
|
Other noncurrent liabilities |
|
|
|
|
Total liabilities |
|
$ |
|
|
16
Note 11. Inventories
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work in progress |
|
|
|
|
|
|
||
Component parts(1) |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Customer supplied inventory |
|
|
|
|
|
|
||
On-hand inventory for which control has transferred to the customer |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
Note 12. Property, plant, and equipment
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Land and land improvements |
|
$ |
|
|
$ |
|
||
Buildings and building improvements |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Machinery and production equipment |
|
|
|
|
|
|
||
Computer equipment and software |
|
|
|
|
|
|
||
Office furniture and equipment |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant, and equipment, net |
|
$ |
|
|
$ |
|
||
Woodward had depreciation expense as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Depreciation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 13. Goodwill
|
|
September 30, 2024 |
|
|
Reduction from Divestiture |
|
|
Effects of Foreign Currency Translation |
|
|
June 30, 2025 |
|
||||
Aerospace |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
Industrial |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Consolidated |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
On March 3, 2025, the agreement to sell the Industrial heavy-duty gas turbine combustion parts product line located in Greenville, South Carolina was finalized (see Note 10 Acquisitions and Divestitures), which resulted in the removal of $
17
Note 14. Intangible assets, net
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||||||||||
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
|
Gross |
|
|
Accumulated |
|
|
Net |
|
||||||
Intangible assets with finite lives: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Customer relationships and contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Industrial |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Intellectual property: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Industrial |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
||
Process technology: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Industrial |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Other intangibles: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Industrial |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
||
Intangible asset with indefinite life: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade name: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
Industrial |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Total intangibles: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Aerospace |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Industrial |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Consolidated Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Woodward recorded amortization expense associated with intangibles of the following:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Amortization expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Future amortization expense associated with intangibles is expected to be:
Year Ending September 30: |
|
|
|
|
2025 (remaining) |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
|
18
Note 15. Credit facilities, short-term borrowings, and long-term debt
As of June 30, 2025, Woodward’s short-term borrowings and availability under its various short-term credit facilities were as follows:
|
|
Total availability |
|
|
Outstanding letters of credit and guarantees |
|
|
Banker acceptance notes issued |
|
|
Outstanding |
|
|
Remaining |
|
|||||
Revolving credit facility |
|
$ |
|
|
$ |
( |
) |
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
Foreign lines of credit and overdraft facilities |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
|
||
Foreign performance guarantee facilities |
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
|
||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
Revolving credit facility
Woodward maintains a $
Under the Second Amended and Restated Revolving Credit Agreement, there were $
Short-term borrowings
Woodward has other foreign lines of credit and foreign overdraft facilities at various financial institutions, which are generally reviewed annually for renewal and are subject to the usual terms and conditions applied by the financial institutions. Pursuant to the terms of the related facility agreements, Woodward’s foreign performance guarantee facilities are limited in use to providing performance guarantees to third parties. There were
Consistent with common business practice in China, Woodward's Chinese subsidiaries have issued bankers' acceptance notes ("Bank Drafts") to Chinese suppliers in settlement of certain customer accounts payable. Bank Drafts are financial instruments issued by Chinese financial institutions as part of financing arrangements between the financial institution and a customer of the financial institution. Bank Drafts represent a commitment by the issuing financial institution to pay a certain amount of money at a specified future maturity date to the legal owner of the bankers' acceptance note as of the maturity date. Woodward has elected to adopt the practical expedient and not adjust the promised amounts of consideration at contract inception as the financing component associated with issuing Bank Drafts has a duration of less than one year.
The Notes
On November 15, 2023, Woodward paid the entire principal balance of $
On May 30, 2025, Woodward paid the entire principal balance of $
19
Note 16. Accrued liabilities
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Salaries and other member benefits |
|
$ |
|
|
$ |
|
||
Product warranties and related liabilities |
|
|
|
|
|
|
||
Interest payable |
|
|
|
|
|
|
||
Accrued retirement benefits |
|
|
|
|
|
|
||
Net current contract liabilities |
|
|
|
|
|
|
||
Taxes, other than income |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Product warranties and related liabilities
Provisions of Woodward’s sales agreements include product warranties customary to these types of agreements. Accruals are established for specifically identified warranty issues and related liabilities for which are probable to result in future costs. Warranty costs are accrued as revenue is recognized on a non-specific basis whenever past experience indicates a normal and predictable pattern exists.
Changes in accrued product warranties and related liabilities were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions, net of recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reductions for settlement |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Foreign currency exchange rate changes |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
End of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Note 17. Other liabilities
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Net accrued retirement benefits, less amounts recognized within accrued liabilities |
|
$ |
|
|
$ |
|
||
Total unrecognized tax benefits |
|
|
|
|
|
|
||
Noncurrent income taxes payable |
|
|
|
|
|
|
||
Deferred economic incentives (1) |
|
|
|
|
|
|
||
Noncurrent operating lease liabilities |
|
|
|
|
|
|
||
Net noncurrent contract liabilities |
|
|
|
|
|
|
||
Cross-currency swap derivative liability |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Note 18. Other (income) expense, net
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Equity interest in the earnings of the JV |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Rent income |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss (gain) on sales of assets and businesses |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
||
Net gain on investments in deferred compensation program |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Gain on non-recurring matter related to a previous acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Other components of net periodic pension and other postretirement benefit, excluding service cost and interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
20
Note 19. Income taxes
The determination of the estimated annual effective tax rate is based upon a number of significant estimates and judgments. In addition, as a global commercial enterprise, Woodward’s tax expense can be impacted by changes in tax rates, tax laws, the finalization of tax audits and reviews, changes in the estimate of the amount of undistributed foreign earnings that Woodward considers indefinitely reinvested, issuance of future guidance, interpretation, and rule-making, and other factors that cannot be predicted with certainty. As such, there can be significant volatility in interim tax provisions.
The following table sets forth the tax expense and the effective tax rate for Woodward’s earnings before income taxes:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Earnings before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective tax rate |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
||||
The decrease in the effective tax rate for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 were primarily attributable to a decrease to the projected future withholding taxes on unremitted foreign earnings, increased earnings in lower taxed foreign jurisdictions, an increase to the Poland research and development credit in the current fiscal year, and higher state income tax credits. This decrease was partially offset by a lower U.S. research and development credit and an increased apportionment to higher taxed states.
The decrease in the effective tax rate for first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year was primarily attributable to a larger stock-based compensation tax benefit, a decrease to projected future withholding taxes on unremitted foreign earnings, an increase to the Poland research and development credit in the current fiscal year, and higher state income tax credits. This decrease was partially offset by a lower U.S. research and development credit and an increased apportionment to higher taxed states.
Gross unrecognized tax benefits were $
Note 20. Retirement benefits
Woodward provides various retirement benefits to eligible members of the Company, including contributions to various defined contribution plans, pension benefits associated with defined benefit plans, postretirement medical benefits, and postretirement life insurance benefits. Eligibility requirements and benefit levels vary depending on employee location.
Defined contribution plans
Most of the Company’s U.S. employees are eligible to participate in the U.S. defined contribution plan. The U.S. defined contribution plan allows employees to defer part of their annual income for income tax purposes into their personal 401(k) accounts. The Company makes matching contributions to eligible employee accounts, which are also deferred for employee personal income tax purposes. Certain non-U.S. employees are also eligible to participate in similar non-U.S. plans.
Woodward's U.S. employees receive an annual contribution of Woodward stock, equal to
21
contribution obligation using shares held in treasury stock by issuing a total of
The amount of expense associated with defined contribution plans were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Company costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Defined benefit plans
Woodward has defined benefit plans that provide pension benefits for certain retired members in the United States, the United Kingdom, Japan, and Germany. Woodward also provides other postretirement benefits to its members including postretirement medical benefits and life insurance benefits. Postretirement medical benefits are provided to certain current and retired members, their covered dependents, and beneficiaries in the United States. Life insurance benefits are provided to certain retirees in the United States under frozen plans, which are no longer available to current employees. A September 30 measurement date is utilized to value plan assets and obligations for all of Woodward’s defined benefit pension and other postretirement benefit plans.
U.S. GAAP requires that, for obligations outstanding as of September 30, 2024, the funded status reported in interim periods shall be the same asset or liability recognized in the previous year end statement of financial position adjusted for (a) subsequent accruals of net periodic benefit cost that exclude the amortization of amounts previously recognized in other comprehensive income (for example, subsequent accruals of service cost, interest cost, and return on plan assets) and (b) contributions to a funded plan or benefit payments.
The components of the net periodic retirement pension costs recognized were as follows:
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
United States |
|
|
Other Countries |
|
|
Total |
|
|||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net actuarial loss (gain) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Prior service cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net periodic retirement pension (benefit) cost |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Contributions paid |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
Nine Months Ended June 30, |
|
|||||||||||||||||||||
|
|
United States |
|
|
Other Countries |
|
|
Total |
|
|||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||
Service cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Interest cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Expected return on plan assets |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net actuarial loss (gain) |
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
||
Prior service cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net periodic retirement pension (benefit) cost |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Contributions paid |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The components of net periodic retirement pension costs other than the service cost and interest cost components are included in the line item “Other (income) expense, net”, and the interest component is included in the line item “Interest expense” in the Condensed Consolidated Statements of Earnings.
22
The components of the net periodic other postretirement benefit costs recognized were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Interest cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net actuarial gain |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net periodic other postretirement cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Contributions paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The components of net periodic other postretirement benefit costs other than the service cost and interest cost components are included in the line item “Other (income) expense, net”, and the interest cost component is included in the line item “Interest expense” in the Condensed Consolidated Statements of Earnings.
The amount of cash contributions made to these plans in any year is dependent upon a number of factors, including minimum funding requirements in the jurisdictions in which Woodward operates and arrangements made with trustees of certain foreign plans. As a result, the actual funding in fiscal year 2025 may differ from the current estimate.
Retirement pension benefits: |
|
|
|
|
United States |
|
$ |
— |
|
United Kingdom |
|
|
|
|
Japan |
|
|
— |
|
Germany |
|
|
|
|
Other postretirement benefits |
|
|
|
|
Note 21. Stockholders’ equity
Common stock and treasury stock
Activity in common stock and treasury stock shares were as follows:
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Treasury stock held for deferred compensation |
|
|||
Balances as of April 1, 2024 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Purchase of treasury stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Sales of treasury stock |
|
|
— |
|
|
|
|
|
|
— |
|
|
Common shares issued for benefit plans |
|
|
— |
|
|
|
|
|
|
— |
|
|
Distribution of stock from deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
Balances as of June 30, 2024 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balances as of April 1, 2025 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Purchase of treasury stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Sales of treasury stock |
|
|
— |
|
|
|
|
|
|
— |
|
|
Common shares issued for benefit plans |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Distribution of stock from deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
Balances as of June 30, 2025 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
23
|
|
Common Stock |
|
|
Treasury Stock |
|
|
Treasury stock held for deferred compensation |
|
|||
Balances as of September 30, 2023 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Purchase of treasury stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Sales of treasury stock |
|
|
— |
|
|
|
|
|
|
— |
|
|
Common shares issued for benefit plans |
|
|
— |
|
|
|
|
|
|
— |
|
|
Purchases of stock by deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distribution of stock from deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
Balances as of June 30, 2024 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|||
Balances as of September 30, 2024 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Purchase of treasury stock |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Sales of treasury stock |
|
|
— |
|
|
|
|
|
|
— |
|
|
Common shares issued for benefit plans |
|
|
— |
|
|
|
|
|
|
— |
|
|
Purchases of stock by deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Distribution of stock from deferred compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
Balances as of June 30, 2025 |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Stock repurchase program
In January 2024, the Woodward, Inc. Board of Directors (the "Board") authorized a program for the repurchase of up to $
Stock-based compensation
Provisions governing non-qualified stock option awards ("stock options" or "options"), restricted stock units ("RSUs"), and performance restricted stock units ("PSUs") are included in the 2017 Omnibus Incentive Plan, as amended from time to time (the “2017 Plan”) and, with respect to outstanding stock options awarded in or prior to fiscal year 2016, the 2006 Omnibus Incentive Plan (the “2006 Plan”).
The 2017 Plan was first approved by Woodward’s stockholders in January 2017 and is the successor plan to the 2006 Plan. The Board delegated authority to administer the 2017 Plan to the Human Capital & Compensation Committee of the Board, including, but not limited to, the power to determine the recipients of awards and the terms of those awards.
Stock options
Stock option awards are granted with an exercise price equal to the market price of Woodward’s stock at the date the grants are awarded, a
The fair value of options granted is estimated as of the grant date using the Black-Scholes-Merton option-valuation model. Woodward calculates the expected term, which represents the average period of time that stock options granted are expected to be outstanding, based upon historical experience of plan participants. Expected volatility is based on historical volatility using daily stock price observations. The estimated dividend yield is based upon Woodward’s historical dividend practice and the market value of its common stock. The risk-free rate is based on the U.S. treasury yield curve, for periods within the contractual life of the stock option, at the time of grant.
24
The following is a summary of the activity for stock option awards:
|
|
Three Months Ended June 30, 2025 |
|
|
Nine Months Ended June 30, 2025 |
|
||||||||||
|
|
Number of options |
|
|
Weighted-Average Exercise Price per Share |
|
|
Number of options |
|
|
Weighted-Average Exercise Price per Share |
|
||||
Beginning balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Ending balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Changes in non-vested stock options were as follows:
|
|
Three Months Ended June 30, 2025 |
|
|
Nine Months Ended June 30, 2025 |
|
||||||||||
|
|
Number of options |
|
|
Weighted-Average Grant Date Fair Value per Share |
|
|
Number of options |
|
|
Weighted-Average Grant Date Fair Value Per Share |
|
||||
Beginning balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Ending balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Information about stock options that have vested, or are expected to vest, and are exercisable at June 30, 2025 were as follows:
|
|
Number of options |
|
|
Weighted-Average Exercise Price |
|
|
Weighted-Average Remaining Life in Years |
|
|
Aggregate Intrinsic Value |
|
||||
Options outstanding |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Options vested and exercisable |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options vested and expected to vest |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock units
The Company generally grants RSUs to eligible employees under its Form RSU Agreement for Employees and Consultants (the “Standard Form RSU Agreement”). RSUs granted under the Standard Form RSU Agreement prior to November 14, 2023 generally have a
The Company has also granted RSUs to certain employees under its form attraction and retention RSU agreement (the “Form Attraction and Retention RSU Agreement”), which has from time to time been used for new hires and specific retention purposes. RSUs granted under the Form Attraction and Retention RSU Agreement are generally scheduled to fully vest on the third or fourth anniversary of the respective grant dates, and in each case, subject to continued employment.
A summary of the activity for RSUs:
|
|
Three Months Ended June 30, 2025 |
|
|
Nine Months Ended June 30, 2025 |
|
||||||||||
|
|
Number of units |
|
|
Weighted-Average Grant Date Fair Value |
|
|
Number of units |
|
|
Weighted-Average Grant Date Fair Value |
|
||||
Beginning balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Released |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Ending balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
25
Performance restricted stock units
The Company grants PSUs to certain eligible employees under its form PSU agreement that generally will vest subject to a market condition and a service condition through the performance period. The market condition associated with the awards is based on the Company's relative total shareholder return ("TSR") compared to the TSR generated by the other companies that comprise the S&P 400 Midcap Index over a
The fair value of the PSUs at the grant date was determined based upon a Monte Carlo valuation method. The assumptions used in the Monte Carlo method to value the PSUs granted, which includes the grant date fair value outcome from the Monte Carlo method, were as follows:
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||
Expected volatility |
|
|
% |
|
|
% |
||
Risk free interest rate |
|
|
% |
|
|
% |
||
Expected life |
|
|
|
|
||||
Grant date fair value |
|
$ |
|
|
$ |
|
||
The PSUs granted receive dividend equivalent units; therefore,
A summary of the activity for PSUs:
|
|
Three Months Ended June 30, 2025 |
|
|
Nine Months Ended June 30, 2025 |
|
||||||||||
|
|
Number of units |
|
|
Weighted-Average Grant Date Fair Value |
|
|
Number of units |
|
|
Weighted-Average Grant Date Fair Value |
|
||||
Beginning balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Ending balance |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Stock-based compensation expense
Woodward recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Pursuant to the form agreements used by the Company, with terms approved by the administrator of the applicable plan, the requisite service period can be less than the stated vesting period based on grantee’s retirement eligibility. As such, the recognition of stock-based compensation expense associated with some grants can be accelerated to a period of less than the stated vesting period, including immediate recognition of stock-based compensation expense on the date of grant.
At June 30, 2025, there was approximately $
Note 22. Commitments and contingencies
Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims, and alleged violations of various laws and regulations. Woodward accrues for known individual matters using estimates of the most likely amount of loss where it believes that it is probable the matter will result in a loss when ultimately resolved and such loss is reasonably estimable. Legal costs are expensed as incurred and are classified in “Selling, general and administrative expenses” on the Condensed Consolidated Statements of Earnings.
26
Woodward is partially self-insured in the United States for healthcare and worker’s compensation up to predetermined amounts, above which third party insurance applies. Management regularly reviews the probable outcome of related claims and proceedings, the expenses expected to be incurred, the availability and limits of the insurance coverage, and the established accruals for liabilities.
While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings, and investigations will not have a material effect on Woodward’s liquidity, financial condition, or results of operations.
Under the Company’s severance and change in control agreements with its current corporate officers, Woodward would be required to pay termination benefits to any such officer if such officer’s employment is terminated without Cause or for Good Reason (as each term is defined therein). The amount of such benefits would vary depending on whether such termination occurs during a specified period within a change of control.
Note 23. Segment information
Woodward serves the aerospace and industrial markets through its
The accounting policies of the reportable segments are the same as those of the Company. Woodward evaluates segment profit or loss based on internal performance measures for each segment in a given period. In connection with that assessment, Woodward generally excludes matters such as certain charges for restructuring, interest income and expense, certain gains and losses from asset dispositions, or other non-recurring and/or non-operationally related expenses.
A summary of consolidated net sales and earnings by segment follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Segment external net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total consolidated net sales |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Segment earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Industrial |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Nonsegment expenses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Consolidated earnings before income taxes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Segment assets consist of accounts receivable, inventories, property, plant, and equipment, net, goodwill, and other intangibles, net. A summary of consolidated total assets by segment follows:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Segment assets: |
|
|
|
|
|
|
||
Aerospace |
|
$ |
|
|
$ |
|
||
Industrial |
|
|
|
|
|
|
||
Unallocated corporate property, plant, and equipment, net |
|
|
|
|
|
|
||
Other unallocated assets |
|
|
|
|
|
|
||
Consolidated total assets |
|
$ |
|
|
$ |
|
||
Note 24. Subsequent events
On July 23, 2025, the Board declared a cash dividend of $
On
27
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements
This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements regarding future events and our future results within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are statements that are deemed forward-looking statements. These statements are based on current expectations, estimates, forecasts, and projections about the industries in which we operate and the beliefs and assumptions of management. Words such as “anticipate,” “believe,” “estimate,” “seek,” “goal,” “expect,” “forecast,” “intend,” “continue,” “outlook,” “plan,” “project,” “target,” “strive,” “can,” “could,” “may,” “should,” “will,” “would,” variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, and other characteristics of future events or circumstances are forward-looking statements. Forward-looking statements may include, among others, statements relating to:
These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict. Factors that could cause actual results and the timing of certain events to differ materially from the forward-looking statements include, but are not limited to, risk factors described in Woodward's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended September 30, 2024, which was filed on November 26, 2024, and other risks described in Woodward’s filings with the Securities and Exchange Commission.
We undertake no obligation to revise or update any forward-looking statements for any reason, except as required by applicable law. Unless we have indicated otherwise or the context otherwise requires, references in this Form 10-Q to “Woodward,” “the Company,” “we,” “us,” and “our” refer to Woodward, Inc. and its consolidated subsidiaries.
Except where we have otherwise indicated or the context otherwise requires, amounts presented in this Form 10-Q are in thousands, except per share amounts.
28
OVERVIEW
Global Business Conditions
As global trade dynamics continue to evolve, the impact of increased trade tensions and related tariffs with U.S. trading partners remains a key factor in shaping global economic activity, supply chains, and market stability. Future tariff adjustments may emerge as countries negotiate trade agreements, respond to geopolitical shifts, and address the challenges of inflation and global competition. We expect increased cost pressure resulting from the already announced tariffs and there are uncertainties surrounding future tariff policy changes and enforcement. However, the Company’s production and supply bases are largely in the same regions where our products are sold, which we believe will mitigate our exposure. Woodward is closely tracking costs from our supply base and customer forecasts regarding the potential impact of currently announced tariff levels, changes to such levels, and actual and potential retaliatory trade actions. We have experienced and are expecting, minimal levels of cost pressure as a result of recently implemented tariffs. We are proactively working to mitigate this cost pressure, potential sales risks, and potential supply chain disruptions.
On July 4, 2025 “One Big Beautiful Bill Act” was signed into law. This new law made changes to various U.S. federal income tax items that have effective dates in fiscal years 2025, 2026, and 2027. Woodward is still assessing the impacts of this Act on our consolidated financial statements.
Operational Highlights
Quarter and Year to Date Highlights
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace segment |
|
$ |
595,990 |
|
|
$ |
517,560 |
|
|
$ |
1,651,601 |
|
|
$ |
1,475,828 |
|
Industrial segment |
|
|
319,456 |
|
|
|
330,128 |
|
|
|
920,199 |
|
|
|
993,933 |
|
Consolidated net sales |
|
$ |
915,446 |
|
|
$ |
847,688 |
|
|
$ |
2,571,800 |
|
|
$ |
2,469,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Aerospace segment |
|
$ |
125,740 |
|
|
$ |
101,842 |
|
|
$ |
345,081 |
|
|
$ |
279,295 |
|
Segment earnings as a percent of segment net sales |
|
|
21.1 |
% |
|
|
19.7 |
% |
|
|
20.9 |
% |
|
|
18.9 |
% |
Industrial segment |
|
$ |
47,622 |
|
|
$ |
59,717 |
|
|
$ |
133,786 |
|
|
$ |
191,842 |
|
Segment earnings as a percent of segment net sales |
|
|
14.9 |
% |
|
|
18.1 |
% |
|
|
14.5 |
% |
|
|
19.3 |
% |
Consolidated net earnings |
|
$ |
108,448 |
|
|
$ |
102,075 |
|
|
$ |
304,488 |
|
|
$ |
289,675 |
|
Adjusted net earnings |
|
$ |
108,448 |
|
|
$ |
102,075 |
|
|
$ |
294,404 |
|
|
$ |
292,711 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effective tax rate |
|
|
14.5 |
% |
|
|
16.4 |
% |
|
|
15.8 |
% |
|
|
17.8 |
% |
Adjusted effective tax rate |
|
|
14.5 |
% |
|
|
16.4 |
% |
|
|
15.5 |
% |
|
|
17.8 |
% |
Consolidated diluted earnings per share |
|
$ |
1.76 |
|
|
$ |
1.63 |
|
|
$ |
4.96 |
|
|
$ |
4.65 |
|
Consolidated adjusted diluted earnings per share |
|
$ |
1.76 |
|
|
$ |
1.63 |
|
|
$ |
4.80 |
|
|
$ |
4.70 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings before interest and taxes ("EBIT") |
|
$ |
137,232 |
|
|
$ |
131,884 |
|
|
$ |
393,881 |
|
|
$ |
382,428 |
|
Adjusted EBIT |
|
$ |
137,232 |
|
|
$ |
131,884 |
|
|
$ |
380,667 |
|
|
$ |
386,193 |
|
Earnings before interest, taxes, depreciation, and amortization ("EBITDA") |
|
$ |
165,886 |
|
|
$ |
160,676 |
|
|
$ |
477,977 |
|
|
$ |
469,270 |
|
Adjusted EBITDA |
|
$ |
165,886 |
|
|
$ |
160,676 |
|
|
$ |
464,763 |
|
|
$ |
473,035 |
|
Adjusted net earnings, adjusted effective tax rate, adjusted earnings per share, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA are non-U.S. GAAP financial measures. A description of these measures as well as a reconciliation of these non-U.S. GAAP financial measures to the most directly comparable U.S. GAAP financial measures can be found under the caption “Non-U.S. GAAP Financial Measures” in this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
29
Liquidity Highlights
Net cash provided by operating activities for the first nine months of fiscal year 2025 was $237,976, compared to $297,329 for the first nine months of fiscal year 2024. The decrease in cash provided by operating activities for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year was primarily attributable to an increase in working capital.
For the first nine months of fiscal year 2025, free cash flow was $159,439, compared to $225,136 for the first nine months of fiscal year 2024. We define free cash flow as net cash flow provided by operating activities less payments for property, plant, and equipment. The decrease in free cash flow for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year was primarily attributable to an increase in working capital and higher capital expenditures. Free cash flow is a non-U.S. GAAP financial measure. A description of this measure as well as a reconciliation of this non-U.S. GAAP financial measure to the most directly comparable U.S. GAAP financial measure can be found under the caption “Non-U.S. GAAP Financial Measures” in this Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations.
At June 30, 2025, we held $473,159 in cash and cash equivalents and had total outstanding debt of $932,871. We have additional borrowing availability of $639,138, net of outstanding letters of credit, under our revolving credit agreement. At June 30, 2025, we also had additional borrowing capacity of $21,353 under various foreign lines of credit and foreign overdraft facilities.
RESULTS OF OPERATIONS
The following table sets forth condensed consolidated statements of earnings data as a percentage of net sales for each period indicated:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
|
|
June 30, 2025 |
|
|
% of Net Sales |
|
|
June 30, 2024 |
|
|
% of Net Sales |
|
|
June 30, 2025 |
|
|
% of Net Sales |
|
|
June 30, 2024 |
|
|
% of Net Sales |
|
||||||||
Net sales |
|
$ |
915,446 |
|
|
|
100 |
% |
|
$ |
847,688 |
|
|
|
100 |
% |
|
$ |
2,571,800 |
|
|
|
100 |
% |
|
$ |
2,469,761 |
|
|
|
100 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold |
|
|
666,287 |
|
|
|
72.8 |
% |
|
|
617,702 |
|
|
|
72.9 |
% |
|
|
1,892,908 |
|
|
|
73.6 |
% |
|
|
1,801,037 |
|
|
|
72.9 |
% |
Selling, general, and administrative expenses |
|
|
88,703 |
|
|
|
9.7 |
% |
|
|
73,812 |
|
|
|
8.7 |
% |
|
|
242,241 |
|
|
|
9.4 |
% |
|
|
229,770 |
|
|
|
9.3 |
% |
Research and development costs |
|
|
41,088 |
|
|
|
4.5 |
% |
|
|
38,728 |
|
|
|
4.6 |
% |
|
|
108,525 |
|
|
|
4.2 |
% |
|
|
105,987 |
|
|
|
4.3 |
% |
Interest expense |
|
|
11,234 |
|
|
|
1.2 |
% |
|
|
11,516 |
|
|
|
1.4 |
% |
|
|
35,464 |
|
|
|
1.4 |
% |
|
|
34,482 |
|
|
|
1.4 |
% |
Interest income |
|
|
(838 |
) |
|
|
(0.1 |
)% |
|
|
(1,728 |
) |
|
|
(0.2 |
)% |
|
|
(3,236 |
) |
|
|
(0.1 |
)% |
|
|
(4,494 |
) |
|
|
(0.2 |
)% |
Other (income) expense, net |
|
|
(17,864 |
) |
|
|
(2.0 |
)% |
|
|
(14,438 |
) |
|
|
(1.7 |
)% |
|
|
(65,755 |
) |
|
|
(2.6 |
)% |
|
|
(49,461 |
) |
|
|
(2.0 |
)% |
Total costs and expenses |
|
|
788,610 |
|
|
|
86.1 |
% |
|
|
725,592 |
|
|
|
85.6 |
% |
|
|
2,210,147 |
|
|
|
85.9 |
% |
|
|
2,117,321 |
|
|
|
85.7 |
% |
Earnings before income taxes |
|
|
126,836 |
|
|
|
13.9 |
% |
|
|
122,096 |
|
|
|
14.4 |
% |
|
|
361,653 |
|
|
|
14.1 |
% |
|
|
352,440 |
|
|
|
14.3 |
% |
Income tax expense |
|
|
18,388 |
|
|
|
2.0 |
% |
|
|
20,021 |
|
|
|
2.4 |
% |
|
|
57,165 |
|
|
|
2.2 |
% |
|
|
62,765 |
|
|
|
2.5 |
% |
Net earnings |
|
$ |
108,448 |
|
|
|
11.8 |
% |
|
$ |
102,075 |
|
|
|
12.0 |
% |
|
$ |
304,488 |
|
|
|
11.8 |
% |
|
$ |
289,675 |
|
|
|
11.7 |
% |
Other select financial data:
|
|
June 30, 2025 |
|
|
September 30, 2024 |
|
||
Net working capital |
|
$ |
1,050,959 |
|
|
$ |
820,101 |
|
Total debt |
|
|
932,871 |
|
|
|
872,470 |
|
Total stockholders' equity |
|
|
2,468,566 |
|
|
|
2,176,416 |
|
30
Net Sales
Consolidated net sales for the third quarter of fiscal year 2025 increased by $67,758, or 8.0%, compared to the same period of fiscal year 2024. Consolidated net sales for the first nine months of fiscal year 2025 increased by $102,039, or 4.1%, compared to the same period of fiscal year 2024.
Details of the changes in consolidated net sales were as follows:
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||
Consolidated net sales for the 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 |
|
Consolidated net sales for the period ended June 30, 2025 |
|
$ |
915,446 |
|
|
$ |
2,571,800 |
|
The increase in Aerospace segment net sales in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year was primarily attributable to price realization and increased volume supported by operational improvements including increased output and other efficiency gains.
In the Industrial segment, the decrease in net sales for the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year was primarily a result of lower China on-highway volume, partially offset by price realization.
We have experienced, and expect to continue to experience, significant sales and earnings decreases in our China on-highway natural gas truck business in fiscal year 2025 as compared to fiscal year 2024. Future demand remains uncertain due to the volatility of this business. We also continue to monitor the evolving trade policy between the U.S. and China.
Costs and Expenses
Cost of goods sold increased by $48,585 to $666,287 for the third quarter of fiscal year 2025, from $617,702, for the third quarter of fiscal year 2024. Cost of goods sold decreased to 72.8% of net sales, for the third quarter of fiscal year 2025, compared to 72.9% of net sales for the third quarter of fiscal year 2024.
Cost of goods sold increased by $91,871 to $1,892,908, for the first nine months of fiscal year 2025, from $1,801,037, for the first nine months of fiscal 2024. Cost of goods sold increased to 73.6% of net sales, for the first nine months of fiscal year 2025, compared to 72.9% of net sales for the first nine months of fiscal year 2024.
The increase in cost of goods sold on an absolute basis in the third quarter and first nine months of fiscal year 2025 compared to the same periods of the prior fiscal year is primarily due to higher sales and net inflationary impacts on material and labor costs.
Gross margin (as measured by net sales less cost of goods sold, divided by net sales) was 27.2% for the third quarter of fiscal year 2025, compared to 27.1% for the third quarter of fiscal year 2024, or essentially flat. Gross margin was 26.4% for the first nine months of fiscal year 2025, compared to 27.1% for the first nine months of fiscal year 2024. The decrease in gross margin for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily attributable to unfavorable mix, partially offset by price realization.
Selling, general, and administrative expenses increased by $14,891, or 20.2%, to $88,703 for the third quarter of fiscal year 2025, compared to $73,812 for the third quarter of fiscal year 2024. Selling, general, and administrative expenses as a percentage of net sales increased to 9.7% for the third quarter of fiscal year 2025, compared to 8.7% for the third quarter of fiscal year 2024. The increase in selling, general, and administrative expenses for the third quarter of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily due to higher project-related costs and payroll expenses.
Selling, general, and administrative expenses increased by $12,471, or 5.4%, to $242,241 for the first nine months of fiscal year 2025, compared to $229,770 for the first nine months of fiscal year 2024. Selling, general, and administrative expenses as a percentage of net sales increased to 9.4% for the first nine months of fiscal year 2025, compared to 9.3% for the first nine months of fiscal year 2024. The increase in selling, general, and administrative expenses for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily due to increased expenses relating to business development activities and higher project-related costs.
Research and development costs were $41,088, or 4.5% of net sales, for the third quarter of fiscal year 2025 and $108,525, or 4.2% of net sales, for the first nine months of fiscal year 2025, as compared to $38,728, or 4.6% of net sales, for the third quarter of fiscal year 2024 and $105,987, or 4.3% of net sales, for the first nine months of fiscal year 2024. Our
31
research and development activities extend across almost all of our customer base, and we anticipate ongoing variability in research and development costs due to the timing of customer business needs on current and future programs.
Interest expense decreased by $282, or 2.4%, to $11,234 for the third quarter of fiscal year 2025, compared to $11,516 for the third quarter of fiscal year 2024. Interest expense as a percentage of net sales was 1.2% for the third quarter of fiscal year 2025, compared to 1.4% for the third quarter of fiscal year 2024. The decrease in interest expense for the third quarter of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily attributable to a lower long-term debt balance as we paid the entire balance of a series of private placement notes.
Interest expense increased by $982, or 2.8%, to $35,464 for the first nine months of fiscal year 2025, compared to $34,482 for the first nine months of fiscal year 2024. Interest expense as a percentage of net sales was 1.4% for both the first nine months of fiscal year 2025 and for the first nine months of fiscal year 2024. The increase in interest expense on an absolute basis for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily attributable to increased average daily borrowings on the revolving credit facility during the first nine months of fiscal year 2025.
Other income increased by $3,426 to $17,864 for the third quarter of fiscal year 2025, compared to $14,438 for the third quarter of fiscal year 2024. The increase in other income for the third quarter of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily attributable to decreased expenses relating to our deferred compensation program.
Other income increased $16,294 to $65,755 for the first nine months of fiscal year 2025, compared to $49,461 for the first nine months of fiscal year 2024. The increase in other income for the first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year is primarily attributable to a one-time gain related to product rationalization activities that was recognized in the current fiscal year that did not occur in the prior fiscal year.
Income taxes were provided at an effective rate on earnings before income taxes of 14.5% for the third quarter of fiscal year 2025, compared to 16.4% for the third quarter of fiscal year 2024. The decrease in the effective tax rate for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 were primarily attributable to a decrease to the projected future withholding taxes on unremitted foreign earnings, increased earnings in lower taxed foreign jurisdictions, an increase to the Poland research and development credit in the current fiscal year, and higher state income tax credits. This decrease was partially offset by a lower U.S. research and development credit and an increased apportionment to higher taxed states.
Income taxes were provided at an effective rate on earnings before income taxes of 15.8% for the first nine months of fiscal year 2025, as compared to 17.8% for the first nine months of fiscal year 2024. The decrease in the effective tax rate for first nine months of fiscal year 2025 as compared to the same period of the prior fiscal year was primarily attributable to a larger stock-based compensation tax benefit, a decrease to projected future withholding taxes on unremitted foreign earnings, an increase to the Poland research and development credit in the current fiscal year, and higher state income tax credits. This decrease was partially offset by a lower U.S. research and development credit and an increased apportionment to higher taxed states.
Segment Results
The following table presents sales by segment:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||||
Net sales: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Aerospace |
|
$ |
595,990 |
|
|
|
65.1 |
% |
|
$ |
517,560 |
|
|
|
61.1 |
% |
|
$ |
1,651,601 |
|
|
|
64.2 |
% |
|
$ |
1,475,828 |
|
|
|
59.8 |
% |
Industrial |
|
|
319,456 |
|
|
|
34.9 |
% |
|
|
330,128 |
|
|
|
38.9 |
% |
|
|
920,199 |
|
|
|
35.8 |
% |
|
|
993,933 |
|
|
|
40.2 |
% |
Consolidated net sales |
|
$ |
915,446 |
|
|
|
100 |
% |
|
$ |
847,688 |
|
|
|
100 |
% |
|
$ |
2,571,800 |
|
|
|
100 |
% |
|
$ |
2,469,761 |
|
|
|
100 |
% |
32
The following table presents earnings by segment and reconciles segment earnings to consolidated net earnings:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Aerospace |
|
$ |
125,740 |
|
|
$ |
101,842 |
|
|
$ |
345,081 |
|
|
$ |
279,295 |
|
Industrial |
|
|
47,622 |
|
|
|
59,717 |
|
|
|
133,786 |
|
|
|
191,842 |
|
Nonsegment expenses |
|
|
(36,130 |
) |
|
|
(29,675 |
) |
|
|
(84,986 |
) |
|
|
(88,709 |
) |
Interest expense, net |
|
|
(10,396 |
) |
|
|
(9,788 |
) |
|
|
(32,228 |
) |
|
|
(29,988 |
) |
Consolidated earnings before income taxes |
|
|
126,836 |
|
|
|
122,096 |
|
|
|
361,653 |
|
|
|
352,440 |
|
Income tax expense |
|
|
(18,388 |
) |
|
|
(20,021 |
) |
|
|
(57,165 |
) |
|
|
(62,765 |
) |
Consolidated net earnings |
|
$ |
108,448 |
|
|
$ |
102,075 |
|
|
$ |
304,488 |
|
|
$ |
289,675 |
|
The following table presents segment earnings as a percent of segment net sales:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Aerospace |
|
|
21.1 |
% |
|
|
19.7 |
% |
|
|
20.9 |
% |
|
|
18.9 |
% |
Industrial |
|
|
14.9 |
% |
|
|
18.1 |
% |
|
|
14.5 |
% |
|
|
19.3 |
% |
Aerospace
Aerospace segment net sales increased by $78,430, or 15.2%, to $595,990 for the third quarter of fiscal year 2025, compared to $517,560 for the third quarter of fiscal year 2024. Aerospace segment net sales increased by $175,773, or 11.9%, to $1,651,601 for the first nine months of fiscal year 2025, compared to $1,475,828 for the first nine months of fiscal year 2024.
The increase in Aerospace segment net sales in the third quarter of fiscal year 2025 and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year were primarily attributable to price realization and increased volume supported by operational improvements including increased output and other efficiency gains.
Commercial OEM sales decreased in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year, primarily due to supply chain disruptions and inventory management by our customers. As production ramps, we expect Commercial OEM sales to grow sequentially in the last three months of fiscal year 2025 as compared to the third quarter of fiscal year 2025. Commercial aftermarket sales increased in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year, primarily due to high aircraft utilization rates.
Defense OEM sales increased in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year, primarily driven by increased demand for our smart defense products. Defense aftermarket sales were down in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year due to timing of sales.
Aerospace segment earnings increased by $23,898, or 23.5%, to $125,740 for the third quarter of fiscal year 2025, compared to $101,842 for the third quarter of fiscal year 2024. Aerospace segment earnings increased by $65,786, or 23.6%, to $345,081 for the first nine months of fiscal year 2025, compared to $279,295 for the first nine months of fiscal year 2024.
The increase in Aerospace segment earnings was due to the following:
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||
Earnings for the period ended June 30, 2024 |
|
$ |
101,842 |
|
|
$ |
279,295 |
|
Sales volume and mix |
|
|
8,261 |
|
|
|
405 |
|
Price, inflation, and productivity |
|
|
28,227 |
|
|
|
79,667 |
|
Manufacturing expenses |
|
|
(10,047 |
) |
|
|
(26,577 |
) |
Other, net |
|
|
(2,543 |
) |
|
|
12,291 |
|
Earnings for the period ended June 30, 2025 |
|
$ |
125,740 |
|
|
$ |
345,081 |
|
Aerospace segment earnings as a percentage of segment net sales were 21.1% for the third quarter and 20.9% for the first nine months of fiscal year 2025, compared to 19.7% for the third quarter and 18.9% for the first nine months of fiscal year 2024.
33
Industrial
Industrial segment net sales decreased by $10,672, or 3.2%, to $319,456 for the third quarter of fiscal year 2025, compared to $330,128 for the third quarter of fiscal year 2024. Industrial segment net sales decreased by $73,734, or 7.4%, to $920,199 for the first nine months of fiscal year 2025, compared to $993,933 for the first nine months of fiscal year 2024.
The decrease in Industrial segment net sales in the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year was primarily attributable to lower China on-highway volume partially offset by price realization, volume increases in oil and gas, as well as operational improvements, including increased output and other efficiency gains
In the third quarter and first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year, we saw a substantial sales decline in our on-highway natural gas truck business in China. Future demand remains uncertain due to the volatility of this business. We also continue to monitor the evolving trade policy between the U.S. and China.
Industrial segment earnings decreased by $12,095, or 20.3%, to $47,622 for the third quarter of fiscal year 2025, compared to $59,717 for the third quarter of fiscal year 2024. Industrial segment earnings decreased by $58,056, or 30.3%, to $133,786 for the first nine months of fiscal year 2025, compared to $191,842 for the first nine months of fiscal year 2024.
The decrease in Industrial segment earnings was due to the following:
|
|
Three-Month Period |
|
|
Nine-Month Period |
|
||
Earnings for the period ended June 30, 2024 |
|
$ |
59,717 |
|
|
$ |
191,842 |
|
Sales volume and mix |
|
|
(16,754 |
) |
|
|
(82,962 |
) |
Price, inflation, and productivity |
|
|
12,813 |
|
|
|
40,155 |
|
Effects of changes in foreign currency rates |
|
|
1,832 |
|
|
|
3,451 |
|
Other, net |
|
|
(9,986 |
) |
|
|
(18,700 |
) |
Earnings for the period ended June 30, 2025 |
|
$ |
47,622 |
|
|
$ |
133,786 |
|
Industrial segment earnings as a percentage of segment net sales were 14.9% for the third quarter and 14.5% for the first nine months of fiscal year 2025, compared to 18.1% for the third quarter and 19.3% for the first nine months of fiscal year 2024. Industrial earnings were significantly impacted by the sales decline in our on-highway natural gas truck business in China and unfavorable mix, partially offset by price realization, volume increases in oil and gas, as well as operational improvements, including increased output and other efficiency gains.
Future demand in our on-highway natural gas truck business in China remains uncertain due to the volatility of this business. We also continue to monitor the evolving trade policy between the U.S. and China.
Nonsegment
Nonsegment expenses increased by $6,455 to $36,130 for the third quarter of fiscal year 2025, compared to $29,675 for the third quarter of fiscal year 2024. Nonsegment expenses decreased by $3,723 to $84,986 for the first nine months of fiscal year 2025 compared to $88,709 for the first nine months of fiscal year 2024.
The significant items that impacted nonsegment expenses in the current fiscal year as compared to the prior fiscal year were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Nonsegment expenses |
|
$ |
(36,130 |
) |
|
$ |
(29,675 |
) |
|
$ |
(84,986 |
) |
|
$ |
(88,709 |
) |
Product rationalization |
|
|
— |
|
|
|
— |
|
|
|
(20,524 |
) |
|
|
— |
|
Business development activities |
|
|
— |
|
|
|
— |
|
|
|
7,310 |
|
|
|
5,902 |
|
Non-recurring gain related to a previous acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,803 |
) |
Certain non-recurring separation costs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,666 |
|
Nonsegment expenses excluding infrequent significant items |
|
$ |
(36,130 |
) |
|
$ |
(29,675 |
) |
|
$ |
(98,200 |
) |
|
$ |
(84,944 |
) |
34
Excluding these items, nonsegment expenses increased $6,455 in the third quarter and increased $13,256 in the first nine months of fiscal year 2025 as compared to the same periods of the prior fiscal year. These increases were primarily attributable to increased headcount and higher project-related costs.
LIQUIDITY AND CAPITAL RESOURCES
Historically, we have satisfied our working capital needs, as well as capital expenditures, product development, and other liquidity requirements associated with our operations, with cash flow provided by operating activities and borrowings under our credit facilities. From time to time, we have also issued debt to supplement our cash needs, repay our other indebtedness, or finance our acquisitions. We continue to expect that cash generated from our operating activities, together with borrowings under our revolving credit facility and other borrowing capacity, will be sufficient to fund our continuing operating needs for the foreseeable future.
In addition to our revolving credit facility, we have various foreign credit facilities, some of which are tied to net amounts on deposit at certain foreign financial institutions. These foreign credit facilities are reviewed annually for renewal. We use borrowings under these foreign credit facilities to finance certain local operations on a periodic basis. For further discussion of our revolving credit facility and our other credit facilities, see Note 15, Credit facilities, short-term borrowings and long-term debt in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item I of this Form 10-Q.
At June 30, 2025, we had total outstanding debt of $932,871 consisting of outstanding balances on our revolving credit facility, various series of unsecured notes due between 2025 and 2033, and obligations under our finance leases.
At June 30, 2025, we had $353,000 outstanding on our revolving credit facility, all of which is classified as short-term borrowings based on our intent and ability to repay this amount in the next twelve months. Revolving credit facility and short-term borrowing activity during the nine months ended June 30, 2025 were as follows:
Maximum daily balance during the period |
|
$ |
359,100 |
|
Average daily balance during the period |
|
$ |
286,838 |
|
Weighted average interest rate on average daily balance |
|
|
5.4 |
% |
At June 30, 2025, we had additional borrowing availability of $639,138 under our revolving credit facility, net of outstanding letters of credit, and additional borrowing availability of $21,353 under various foreign credit facilities.
To our knowledge, we were compliant with all our debt covenants as of June 30, 2025. See Note 15, Credit facilities, short-term borrowings and long-term debt in the Notes to the Consolidated Financial Statements included in Part II, Item 8 in our Annual Report on Form 10-K for fiscal year 2024, for more information about our covenants.
In addition to utilizing our cash resources to fund the working capital needs of our business, we evaluate, and from time to time, use cash for additional strategic uses, including the repurchase of our common stock under our authorized stock repurchase program, payment of dividends, significant capital expenditures, strategic acquisitions, and other potential uses of cash.
Our ability to service our long-term debt, to remain compliant with the various restrictions and covenants contained in our debt agreements, and to fund working capital, capital expenditures and product development efforts will depend on our ability to generate cash from operating activities, which in turn is subject to, among other things, future operating performance as well as general economic, financial, competitive, legislative, regulatory, and other conditions, some of which may be beyond our control.
We believe that cash flows from operations, along with our contractually committed borrowings and other borrowing capability, will continue to be sufficient to fund anticipated capital spending requirements and our operations for the foreseeable future. However, we could be adversely affected if the financial institutions providing our capital requirements refuse to honor their contractual commitments, cease lending, or declare bankruptcy. We believe the lending institutions participating in our credit arrangements are financially stable and do not currently foresee adverse impacts to financial institutions supporting our capital requirements.
35
Cash Flows
|
|
Nine Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
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 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
|
6,557 |
|
|
|
765 |
|
Net change in cash and cash equivalents |
|
|
190,889 |
|
|
|
170,885 |
|
Cash and cash equivalents at beginning of year |
|
|
282,270 |
|
|
|
137,447 |
|
Cash and cash equivalents at end of period |
|
$ |
473,159 |
|
|
$ |
308,332 |
|
Net cash flows provided by operating activities for the first nine months of fiscal year 2025 were $237,976, compared to $297,329 for the same period of fiscal year 2024. The decrease in net cash flows provided by operating activities in the first nine months of fiscal year 2025 as compared to the first nine months of the prior fiscal year was primarily attributable to an increase in working capital.
Net cash flows used in investing activities for the first nine months of fiscal year 2025 were $27,518, compared to $68,239 for the same period of fiscal year 2024. The decrease in net cash flows used in investing activities in the first nine months of fiscal year 2025 as compared to the first nine months of the prior fiscal year was primarily due to proceeds received from certain business divestitures as part of our product rationalization efforts.
Net cash flows used in financing activities for the first nine months of fiscal year 2025 were $26,126, compared to net cash flows used in financing activities of $58,970 for the same period of fiscal year 2024. The decrease in net cash flows used in financing activities for the first nine months of fiscal year 2025 as compared to the first nine months of the prior fiscal year was primarily attributable to decreased repurchases of common stock as well as a decrease in net debt borrowings. During the first nine months of fiscal year 2025, we repurchased $124,276 of our common stock, whereas in the first nine months of fiscal year 2024, we repurchased $304,811. During the first nine months of fiscal year 2025, we had net debt borrowings in the amount of $50,281, compared to net debt borrowings of $199,156 in the first nine months of fiscal year 2024.
Non-U.S. GAAP Financial Measures
Adjusted net earnings, adjusted earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, adjusted EBITDA, and free cash flow are financial measures not prepared and presented in accordance with U.S. GAAP. However, we believe these non-U.S. GAAP financial measures provide additional information that enables readers to evaluate our business from the perspective of management.
Earnings based non‐U.S. GAAP financial measures
Adjusted net earnings is defined by the Company as net earnings excluding, as applicable, (i) product rationalization, (ii) a non-recurring gain related to a previous acquisition, (iii) costs related to business development activities, and (iv) certain non-restructuring separation costs. The product rationalization adjustment pertains to the elimination of certain product lines. The Company believes that these excluded items are short‐term in nature, not directly related to the ongoing operations of the business, and therefore, their exclusion illustrates more clearly how the underlying business of Woodward is performing. Management uses adjusted net earnings to evaluate the Company’s performance excluding these infrequent or unusual period expenses that are not necessarily indicative of the Company’s operating performance for the period. Management defines adjusted earnings per share as adjusted net earnings, as defined above, divided by the weighted‐average number of diluted shares of common stock outstanding for the period. Adjusted income tax expense is defined by the Company as income tax expense excluding, as applicable, (i) product rationalization, (ii) a non-recurring gain related to a previous acquisition, (iii) costs related to business development activities, and (iv) certain non-restructuring separation costs. The product rationalization adjustment pertains to the elimination of certain product lines.
Management uses adjusted net earnings, adjusted earnings per share, adjusted effective tax rate, and adjusted income tax expense when comparing operating performance to other periods.
There were no adjustments to net earnings, earnings per share, adjusted effective tax rate, and adjusted income tax expense in the three months ended June 30, 2025 or the three months ended June 30, 2024.
36
The reconciliation of net earnings and earnings per share to adjusted net earnings and adjusted earnings per share, respectively, is shown in the tables below:
|
|
Nine Months Ended June 30, |
|
|||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||
|
|
Net Earnings |
|
|
Earnings Per Share |
|
|
Net Earnings |
|
|
Earnings Per Share |
|
||||
Earnings per share (U.S. GAAP) |
|
$ |
304,488 |
|
|
$ |
4.96 |
|
|
$ |
289,675 |
|
|
$ |
4.65 |
|
Non-U.S. GAAP adjustments, net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product rationalization1 |
|
|
(20,524 |
) |
|
|
(0.33 |
) |
|
|
— |
|
|
|
— |
|
Non-recurring gain related to a previous acquisition1 |
|
|
— |
|
|
|
— |
|
|
|
(4,803 |
) |
|
|
(0.08 |
) |
Business development activities2 |
|
|
7,310 |
|
|
|
0.12 |
|
|
|
5,902 |
|
|
|
0.09 |
|
Certain non-restructuring separation costs2 |
|
|
— |
|
|
|
— |
|
|
|
2,666 |
|
|
|
0.05 |
|
Tax effect of Non-U.S. GAAP net earnings adjustments |
|
|
3,130 |
|
|
|
0.05 |
|
|
|
(729 |
) |
|
|
(0.01 |
) |
Total non-U.S. GAAP adjustments |
|
|
(10,084 |
) |
|
|
(0.16 |
) |
|
|
3,036 |
|
|
|
0.05 |
|
Adjusted earnings per share (Non-U.S. GAAP) |
|
$ |
294,404 |
|
|
$ |
4.80 |
|
|
$ |
292,711 |
|
|
$ |
4.70 |
|
The reconciliation of income tax expense to adjusted income tax expense and the adjusted effective tax rate, is shown in the tables below:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Income tax expense (U.S. GAAP) |
|
$ |
18,388 |
|
|
$ |
20,021 |
|
|
$ |
57,165 |
|
|
$ |
62,765 |
|
Tax effect of Non-U.S. GAAP net income adjustments |
|
|
— |
|
|
|
— |
|
|
|
(3,130 |
) |
|
|
729 |
|
Adjusted income tax expense (Non-U.S. GAAP) |
|
$ |
18,388 |
|
|
$ |
20,021 |
|
|
$ |
54,035 |
|
|
$ |
63,494 |
|
Adjusted effective tax rate (Non-U.S. GAAP) |
|
|
14.5 |
% |
|
|
16.4 |
% |
|
|
15.5 |
% |
|
|
17.8 |
% |
Management uses EBIT to evaluate Woodward’s performance without financing and tax related considerations, as these elements do not fluctuate with operating results. Management uses EBITDA in evaluating Woodward’s operating performance, making business decisions, including developing budgets, managing expenditures, forecasting future periods, and evaluating capital structure impacts of various strategic scenarios. Securities analysts, investors, and others frequently use EBIT and EBITDA in their evaluation of companies, particularly those with significant property, plant, and equipment, and intangible assets subject to amortization. The Company believes that EBIT and EBITDA are useful measures to the investor when measuring operating performance as they eliminate the impact of financing and tax expenses, which are non-operating expenses and may be driven by factors outside of the Company’s operations, such as changes in tax laws or regulations, and, in the case of EBITDA, the noncash charges associated with depreciation and amortization. Further, as interest from financing, income taxes, depreciation, and amortization can vary dramatically between companies and between periods, management believes that the removal of these items can improve comparability.
Adjusted EBIT and adjusted EBITDA represent further non-U.S. GAAP adjustments to EBIT and EBITDA, in each case adjusted to exclude, as applicable, (i) product rationalization, (ii) a non-recurring gain related to a previous acquisition, (iii) costs related to business development activities, and (iv) certain non-restructuring separation costs. The product rationalization adjustment pertains to the elimination of certain product lines. As these charges are infrequent or unusual items that can be variable from period to period and do not fluctuate with operating results, management believes removing these gains and costs from EBIT and EBITDA improves comparability of past, present, and future operating results and provides consistency when comparing EBIT and EBITDA between periods.
37
EBIT and adjusted EBIT reconciled to net earnings were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net earnings (U.S. GAAP) |
|
$ |
108,448 |
|
|
$ |
102,075 |
|
|
$ |
304,488 |
|
|
$ |
289,675 |
|
Income tax expense |
|
|
18,388 |
|
|
|
20,021 |
|
|
|
57,165 |
|
|
|
62,765 |
|
Interest expense |
|
|
11,234 |
|
|
|
11,516 |
|
|
|
35,464 |
|
|
|
34,482 |
|
Interest income |
|
|
(838 |
) |
|
|
(1,728 |
) |
|
|
(3,236 |
) |
|
|
(4,494 |
) |
EBIT (Non-U.S. GAAP) |
|
|
137,232 |
|
|
|
131,884 |
|
|
|
393,881 |
|
|
|
382,428 |
|
Non-U.S. GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product rationalization1 |
|
|
— |
|
|
|
— |
|
|
|
(20,524 |
) |
|
|
— |
|
Non-recurring gain related to a previous acquisition1 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,803 |
) |
Business development activities2 |
|
|
— |
|
|
|
— |
|
|
|
7,310 |
|
|
|
5,902 |
|
Certain non-recurring separation costs2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,666 |
|
Total non-U.S. GAAP adjustments |
|
|
— |
|
|
|
— |
|
|
|
(13,214 |
) |
|
|
3,765 |
|
Adjusted EBIT (Non-U.S. GAAP) |
|
$ |
137,232 |
|
|
$ |
131,884 |
|
|
$ |
380,667 |
|
|
$ |
386,193 |
|
EBITDA and adjusted EBITDA reconciled to net earnings were as follows:
|
|
Three Months Ended June 30, |
|
|
Nine Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Net earnings (U.S. GAAP) |
|
$ |
108,448 |
|
|
$ |
102,075 |
|
|
$ |
304,488 |
|
|
$ |
289,675 |
|
Income tax expense |
|
|
18,388 |
|
|
|
20,021 |
|
|
|
57,165 |
|
|
|
62,765 |
|
Interest expense |
|
|
11,234 |
|
|
|
11,516 |
|
|
|
35,464 |
|
|
|
34,482 |
|
Interest income |
|
|
(838 |
) |
|
|
(1,728 |
) |
|
|
(3,236 |
) |
|
|
(4,494 |
) |
Amortization of intangible assets |
|
|
7,172 |
|
|
|
8,131 |
|
|
|
20,858 |
|
|
|
25,348 |
|
Depreciation expense |
|
|
21,482 |
|
|
|
20,661 |
|
|
|
63,238 |
|
|
|
61,494 |
|
EBITDA (Non-U.S. GAAP) |
|
|
165,886 |
|
|
|
160,676 |
|
|
|
477,977 |
|
|
|
469,270 |
|
Non-U.S. GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product rationalization1 |
|
|
— |
|
|
|
— |
|
|
|
(20,524 |
) |
|
|
— |
|
Non-recurring gain related to a previous acquisition1 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,803 |
) |
Business development activities2 |
|
|
— |
|
|
|
— |
|
|
|
7,310 |
|
|
|
5,902 |
|
Certain non-recurring separation costs2 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,666 |
|
Total non-U.S. GAAP adjustments |
|
|
— |
|
|
|
— |
|
|
|
(13,214 |
) |
|
|
3,765 |
|
Adjusted EBITDA (Non-U.S. GAAP) |
|
$ |
165,886 |
|
|
$ |
160,676 |
|
|
$ |
464,763 |
|
|
$ |
473,035 |
|
The use of these non-U.S. GAAP financial measures is not intended to be considered in isolation of, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. As adjusted net earnings, adjusted net earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA exclude certain financial information compared with net earnings, the most directly comparable U.S. GAAP financial measure, users of this financial information should consider the information that is excluded. Our calculations of adjusted net earnings, adjusted net earnings per share, adjusted income tax expense, adjusted effective tax rate, EBIT, adjusted EBIT, EBITDA, and adjusted EBITDA may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.
Cash flow‐based non‐U.S. GAAP financial measures
Management uses free cash flow, which is defined by the Company as net cash flows provided by operating activities less payments for property, plant, and equipment, in reviewing the financial performance of and cash generation by
38
Woodward’s various business groups and evaluating cash levels. We believe free cash flow is a useful measure for investors because it portrays our ability to grow organically and generate cash from our businesses for purposes such as paying interest on our indebtedness, repaying maturing debt, funding business acquisitions, repurchasing our common stock, paying dividends, and investing in additional research and development. In addition, securities analysts, investors, and others frequently use free cash flow in their evaluation of companies.
The use of this non‐U.S. GAAP financial measure is not intended to be considered in isolation of, or as substitutes for, the financial information prepared and presented in accordance with U.S. GAAP. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. Our calculation of free cash flow may differ from similarly titled measures used by other companies, limiting their usefulness as comparative measures.
Free cash flow reconciled to net cash provided by operating activities were as follows:
|
|
Nine Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
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 |
|
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements and related disclosures in conformity with U.S. GAAP requires us to make judgments, assumptions, and estimates that affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying notes. Note 1, Operations and summary of significant accounting policies in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of our most recently filed Form 10-K, describes the significant accounting policies and methods used in the preparation of the Consolidated Financial Statements. Our critical accounting estimates, identified in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our most recently filed Form 10-K, include the discussion of estimates used for revenue recognition, inventory valuation, reviews for impairment of goodwill and other indefinitely lived intangible assets, and our provision for income taxes. Such accounting estimates require significant judgments and assumptions to be used in the preparation of the Condensed Consolidated Financial Statements included in this Form 10-Q, and actual results could differ materially from the amounts reported.
New Accounting Standards
From time to time, the FASB or other standards-setting bodies issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification are communicated through issuance of an Accounting Standards Update.
To understand the impact of recently issued standards, whether adopted or to be adopted, please review the information provided in Note 2, New accounting standards in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q. Unless otherwise discussed, we believe that the impact of recently issued standards, whether adopted or to be adopted in the future, is not expected to have a material impact on our Condensed Consolidated Financial Statements upon adoption.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we have exposures to interest rate risk from our long-term and short-term debt and our postretirement benefit plans, and foreign currency exchange rate risk related to our foreign operations and foreign currency transactions. We are also exposed to various market risks that arise from transactions entered into in the normal course of business related to items such as the cost of raw materials and changes in inflation. Certain contractual relationships with customers and vendors mitigate risks from changes in raw material costs and foreign currency exchange rate changes that arise from normal purchasing and normal sales activities.
These market risks are discussed more fully in “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of our most recent Form 10-K. These market risks have not materially changed since the date our most recent Form 10-K was filed with the SEC.
Item 4. Controls and Procedures
We have established disclosure controls and procedures, which are designed to ensure that information required to be disclosed in reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Act”) is recorded,
39
processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Act is accumulated and communicated to management, including our Principal Executive Officer (Charles (“Chip”) P. Blankenship, Jr., Chairman of the Board and Chief Executive Officer) and Principal Financial and Accounting Officer (William F. Lacey, Chief Financial Officer), as appropriate, to allow timely decisions regarding required disclosures.
Chip P. Blankenship, Jr. and William F. Lacey evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15 under the Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on their evaluations, they concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025.
There have not been any changes in our internal controls over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Woodward is currently involved in claims, pending or threatened litigation or other legal proceedings, investigations, and/or regulatory proceedings arising in the normal course of business, including, among others, those relating to product liability claims, employment matters, worker’s compensation claims, contractual disputes, product warranty claims, and alleged violations of various laws and regulations. Woodward accrues for known individual matters using estimates of the most likely amount of loss where it believes that it is probable the matter will result in a loss when ultimately resolved and such loss is reasonably estimable.
While the outcome of pending claims, legal and regulatory proceedings, and investigations cannot be predicted with certainty, management believes that any liabilities that may result from these claims, proceedings, and investigations will not have a material effect on Woodward's liquidity, financial condition, or results of operations.
Item 1A. Risk Factors
Investment in our securities involves risk. An investor or potential investor should consider the risks summarized under the caption “Risk Factors” in Part I, Item 1A of our most recent Form 10-K when making investment decisions regarding our securities. The risk factors that were disclosed in our most recent Form 10-K have not materially changed since the date our most recent Form 10-K was filed with the SEC.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Sales of Unregistered Securities
None.
40
Issuer Purchases of Equity Securities |
|
Total Number of Shares Purchased |
|
|
Weighted Average Price Paid Per Share |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) |
|
|
Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased under the Plans or Programs at Period End (1) |
|
||||
April 1, 2025 through April 30, 2025 (2) |
|
|
108,208 |
|
|
$ |
173.95 |
|
|
|
108,071 |
|
|
$ |
110,892 |
|
May 1, 2025 through May 31, 2025 (2) |
|
|
61,438 |
|
|
|
192.90 |
|
|
|
61,400 |
|
|
|
99,049 |
|
June 1, 2025 through June 30, 2025 (2) |
|
|
61,400 |
|
|
|
230.35 |
|
|
|
61,400 |
|
|
|
84,905 |
|
Item 5. Other Information
During the three months ended June 30, 2025, no directors or officers, as defined in Rule 16a-1(f),
41
Item 6. Exhibits
Exhibits filed as part of this Report are listed in the Exhibit Index.
WOODWARD, INC.
EXHIBIT INDEX
|
Exhibit Number |
Description |
* |
31.1 |
Rule 13a-14(a)/15d-14(a) certification of Charles P. Blankenship, Jr. |
* |
31.2 |
Rule 13a-14(a)/15d-14(a) certification of William F. Lacey |
* |
32.1 |
Section 1350 certifications |
* |
101 |
The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Earnings, (iii) Condensed Consolidated Statements of Comprehensive Earnings, (iv) Condensed Consolidated Statements of Cash Flows, (v) Condensed Consolidated Statements of Stockholders’ Equity, and (vi) Notes to Condensed Consolidated Financial Statements. |
* |
104 |
Cover page Interactive Data File (embedded within the Inline XBRL document and are contained in Exhibit 101) |
* Filed as an exhibit to this Report
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
WOODWARD, INC. |
Date: August 1, 2025 |
|
/s/ Charles P. Blankenship, Jr. |
|
|
Charles P. Blankenship, Jr. |
|
|
Chairman of the Board and Chief Executive Officer (on behalf of the registrant and as the registrant’s Principal Executive Officer) |
|
|
|
Date: August 1, 2025 |
|
/s/ William F. Lacey |
|
|
William F. Lacey |
|
|
Chief Financial Officer (on behalf of the registrant and as the registrant’s Principal Financial and Accounting Officer) |
42
FAQ
How many STRZ shares did Bruce Mann acquire?
What price did Bruce Mann pay for the shares?
What is Bruce Mann’s total STRZ ownership after the transaction?
Was the transaction part of a Rule 10b5-1 plan?
Did the Form 4 report any derivative securities?
