Woodward (formerly Woodward Governor) 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 GE (14% of sales), Caterpillar, Boeing, and United Technologies. Woodward's products are primarily made in the US, where the company garners more than half of its sales.
Amid the recovery of the worldwide supply chain, year-over-year 2011 net sales for Woodward rose 17%. The company's energy segment, which accounts for 51% of sales and is focused on more efficient, cleaner technologies, enjoyed a year-over-year surge of 26%, thanks in part to strong demand for engines powered by diesel, natural gas, and other fuels, used for construction, agriculture, and on-highway vehicles. Also contributing to this segment were healthy sales for industrial steam turbines and wind turbine power converters, though the latter may be challenged by tighter lending and uncertainty about government stimulus programs. Sales to the US government account for about 19% of Woodward's revenue.
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.
Year-over-year sales for the aerospace segment rose 9%, supported by rising passenger and cargo air traffic and the launch of new aircraft platforms. The Airbus A320, Boeing 777, and the Embraer and Bombardier 70- to 90-seat regional jets, especially carried sales up for Woodward's bottom line. While Woodward continutes to develop opportunities for new engine and aircraft programs, it has been given business specifically for work on the Boeing 737 MAX, 787, 747-8, the Airbus A320neo, Bombardier CSeries, COMAC 919, Bell 429, and some business jets. In the military sphere, the segment was given business for motion control system content for the fueling boom on the KC-46 tanker program.
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.
To create a better fit with its markets, Woodward restructured into two segments, energy and aerospace, which each unify several businesses while concentrating on specific technical applications. Energy comprises industrial turbomachinery systems, engine systems, and electrical power systems. Aerospace includes aircraft turbine systems and airframe systems.
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.