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, Russia, Switzerland, and the UK.
The US accounts for 55% of total sales, while Europe generates 25%. Asia follows with 15%.
To create a better fit with its markets, Woodward restructured into two segments, aerospace (55% of net sales) and energy (45%), 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 15% of its total sales in 2013. Direct sales from the US government accounted for 6%. Other big customers include Boeing, United Technologies, and Weichai Westport.
Woodward has enjoyed unprecedented growth over the last three years. Revenues jumped 4% from $1.87 billion in 2012 to $1.84 billion in 2013, a historic milestone for the company. Profits also increased 3% from $142 million in 2012 to a record-high $146 million in 2013.
The company attributes the growth in 2013 to a previous acquisition, a spike in selling prices, and increased volumes in its aerospace segment due to higher commercial OEM and defense aftermarket sales. This was partially offset by decreased volumes in its energy segment attributable to significantly lower wind turbine converter sales.
Woodward uses acquisitions as a means for growth. In 2012 it acquired the assets of GE Aviation Systems' hydraulic thrust reverser actuation systems business located in Duarte, California, for $200 million in cash. The move enhanced the motion control technologies business within its aerospace segment and contributed additional revenue for 2013.
In 2011 Woodward acquired Integral Drive Systems (IDS) and the Switzerland-based company's European subsidiaries, as well as the key assets for its China business, for about $38 million in cash. Besides increasing its business in wind converters, the acquisition of IDS brought Woodward into the solar market.
To support development projects that include next generation fuel systems for aircraft turbines, Woodward has built a $21.2 million, 48,000 sq. ft. test facility in Illinois that features several environmental system test cells and a vibration lab. In 2011 the new facility helped Woodward win the largest contract in its history, a deal with GE to provide the fuel system, air management, and actuation hardware for the GE Passport 20 engine and NG34 technology development program.
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.