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.
To create a better fit with its markets, Woodward restructured into two segments, aerospace (61% of net sales) and industrial (39%), which each unify several businesses while concentrating on specific technical applications. Aerospace includes aircraft turbine systems and airframe systems. Industrial comprises industrial turbomachinery systems, engine systems, and electrical power systems.
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, the Republic of Korea, Russia, and the UK.
The US accounts for 55% of total sales, while Europe generates 27%. Asia follows with 11%.
Sales and Marketing
The company sells primarily to OEMs and equipment packagers. GE is the company's largest customer, representing 17% of its total sales in 2016. Direct sales to the US government accounted for 5%. Other big customers include Boeing and United Technologies.
After posting record-setting revenue of $2.04 billion in 2015, Woodward saw its revenues marginally dip by 1% to $2.02 billion in 2016. Its profits also remained static between 2015 and 2016, hovering around the $181 million mark for both years. In addition, its cash flow from operations surged from $287 million to $435 million during that same time period.
The small revenue decline for 2016 was attributed to continued weakness across nearly all its industrial segment markets, partially offset by increased commercial aftermarket and defense sales in the aerospace segment markets. The company was also negatively affected by fluctuations in foreign currency exchange rates during the year.
Woodward enters partnerships and joint ventures to attract additional revenue from some if its largest customers. In early 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 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.