Woodward likes to remain in control. The company manufactures and services a slew of energy control and optimization systems used in aircraft and vehicles, turbine and piston engines, and electrical power equipment. Woodward serves OEMs and prime contractors worldwide in commercial and military aerospace, power generation and distribution, and transportation. These include such noteworthy names as GE, Caterpillar, Boeing, and United Technologies. Woodward's products are primarily made in the US, where the company garners more than half of its sales.
The company 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, Peru, the Republic of Korea, Switzerland, and the UK.
The US accounts for 52% of total sales, while Europe generates 28%. Asia follows with 12%.
To create a better fit with its markets, Woodward restructured into two segments, aerospace (57% of net sales) and energy (43%), which each unify several businesses while concentrating on specific technical applications. Aerospace includes aircraft turbine systems and airframe systems. Energy comprises industrial turbomachinery systems, engine systems, and electrical power systems.
Sales and Marketing
The company sells primarily to OEMs and equipment packagers. GE is the company's largest customer, representing 18% of its total sales in 2015. Direct sales from the US government accounted for 5%. Other big customers include Boeing and United Technologies.
Woodward has enjoyed unprecedented growth over the last five years. Revenues jumped 2% from $2 billion in 2014 to $2.04 billion in 2015, a historic milestone for the company. Profits also increased 9% from $166 million in 2014 to a record-high $181 million in 2015. In addition, Woodward's operating cash flow has surged over the last few years.
The historic growth for 2015 was fueled by a 7% spike in aerospace sales as a result of increased sales volumes across all of its markets. The highest increase in commercial OEM was attributed to steady airline demand and new product introductions and defense aftermarket sales primarily related to conflicts in the Middle East.
Woodward enters partnerships and joint ventures to attract additional revenue from some if its largest customers. In mid-2015, Woodward and General Electric, acting through its GE Aviation business unit, entered into an agreement to form a strategic joint venture. The JV will design, develop, source, and service the fuel system (including components from the fuel inlet up to the fuel nozzle) for specified existing and all future GE commercial aircraft engines that produce thrust in excess of fifty thousand pounds.
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.