About Mpc Products Corporation

Woodward Inc. is a controlling presence in many a machine. The Fort Collins, Colorado-based company manufactures and services energy control and optimization systems that keep fluids, gasses, and electricity flowing through aircraft, vehicles, turbine and piston engines, and electrical power equipment. Its products - valves, nozzles, actuators, sensors, and more -- go to OEMs and prime contractors around the world for use in commercial and military aerospace, power generation and distribution, and transportation applications. Customers include GE, Caterpillar, Boeing, Airbus, and United Technologies. Woodward's products are primarily made in the US, where the company garners more than half of its sales.

Operations

Woodward operates through two segments, aerospace (about 60% of net sales) and industrial (about 40% of sales), which unify several businesses while concentrating on specific technical applications. Aerospace includes aircraft turbine systems and airframe systems. The industrial covers industrial turbomachinery systems, engine systems, and electrical power systems.

Geographic Reach

Woodward Inc. has its production and assembly facilities China, Germany, Poland, and the US. It operates sales and service facilities in Brazil, Bulgaria, India, Japan, the Netherlands, the Republic of Korea, Russia, and the UK.

The split between domestic and foreign sales is about 60%-40%, respectively. Overseas, Europe generates about a quarter of sales and Asia, about 10%.

Sales and Marketing

Woodward Inc. sells primarily to OEMs and equipment packagers. GE is the company's largest customer, generating about 15% of its sales. Other big customers include Boeing and United Technologies. The company's five biggest customers supply more than 40% of revenue. Direct and indirect sales to the US government account for about a quarter of revenue through contracts with NASA, the Department of Transportation, and the Department of Defense.

Financial Performance

Woodward Inc.'s revenue, which has hovered just above $2 billion since 2014, rose 4% to $2.1 billion in 2017 (ended September) from 2016. The company's profit increased 11% to $200 million year-over-year.

The 2017 growth came in aerospace, which had higher sales to defense OEM's, driven by smart weapons for which Woodward provides content, as well as increases in commercial aftermarket and OEM sales from new aircraft models coming to market. The industrial segment posted higher sales of fuel systems for compressed natural gas (CNG) trucks in Asia with the Chinese government encouraging use of natural gas. But sales fell in the industrial gas turbine aftermarket and in wind turbine converters.

In 2017 higher sales combined with maintaining costs at levels near of below costs incurred the year before (as a percentage of sales) produced higher net income.

Cash flow from operations fell to about $307 million in 2017 from about $435 million in 2016, when joint venture proceeds boosted cash flow.

Strategy

Woodward Inc. looks to long-term trends to propel sales in aerospace and industrial markets. The company cites growing airliner passenger traffic and forthcoming new aircraft designs from the major manufacturers that are its customers as trends that will boost commercial aerospace sales. For military aerospace markets, the company expects rising international tensions will lead to higher defense spending around the world. For its industrial operations, Woodward finds that growing populations will need more power and transportation and the systems that deliver them will include its products. Natural gas power generation is a particular area of optimism for the company as are renewable sources of energy, especially as demand for lower emissions and increased efficiency grow.

The company maintains research and development spending at about 6% of revenue to deliver products for next-generation aircraft and industrial equipment. It also leverages existing relationships with OEMs to further penetrate their equipment with its products.

Woodward works through partnerships and joint ventures to attract additional revenue from some if its largest customers. In 2016, Woodward and General Electric, acting through its GE Aviation business unit, formed a strategic joint venture. The JV designs, develops, sources, and services fuel systems (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust of more than 50,000 pounds.

Company Background

As a nod toward the direction the company is going, in 2011 Woodward dropped "Governor" from its name. Although the company's energy segment still makes governors (a device used to regulate a machine's speed), the new, more general name better reflects the dramatic expansion of Woodward's product menu. Founder Amos Woodward developed a governor to control water wheels in 1870.

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Mpc Products Corporation

6300 W Howard St
Niles, IL 60714-3406
Phone: 1 (847) 673-8300
Fax: 1 (847) 673-7144

Stats

  • Employer Type: Public
  • NPI Sourcing Project Manager: Joseph Auer
  • Director, SEM Manufacturing Engineering: Kevin Kraft
  • Director: Keith Stoddard
  • Employees: 963

Major Office Locations

  • Niles, IL