Curtiss-Wright (CW) 22 Feb 232022 Q4 Earnings call transcript

Please standby, the program is about to begin. [Operator Instructions] Welcome to the Curtiss-Wright Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions, following the presentation. [Operator Instructions]

I would now like to turn the call over to Jim Ryan, Vice President of Investor Relations.

good and Leo you, morning, everyone. Thank Curtiss-Wright’s conference call. to fourth quarter earnings XXXX year full and Welcome

Joining the and Officer, Lynn Chris me Chief Bamford and on Farkas. and; call today Vice President Chief Officer, Chair Financial are; Executive

on replay call can of release well website. press at our the financial available company as and the be through A today’s as for of website today download is of copy Investor Our also webcast presentation the found this being webcast the Relations www.curtisswright.com. section

Please defined Securities projections These our filings forward-looking forward-looking Act and note, of management’s include statements and our guarantees performance. with and certain the statements XXXX. SEC. not on future today’s discussion risks in uncertainties will We current associated that are are those public expectations statements of Litigation with as are based Private and the Reform detail

release adjusted currency periods an and the divestitures, GAAP certain ongoing transparency on reminder, operating translation, results costs company’s noted. otherwise for acquisitions growth non-GAAP Any order are a in an the basis to in website. foreign exclude As non-GAAP greater financial to references reconciliations unless provide in earnings and including view available organic that our Curtiss-Wright’s to performance. the prior and are current year and on and exclude adjusted

to the like to Lynn? call turn started. I’d get Now over to things Lynn

inflation exceptionally more am everyone. this supply good staffing I successfully morning, and rising presentation like how challenges through to to sharing would and difficult numerous including And past I Jim. you, Thank a the environment. the proud navigate team’s agility chain, today’s by year, of resilience start

the including strategy. hence financial and of in finish our the portfolio Growth the delivered we XXXX, of year to new results profitability strong strength team, Curtiss-Wright a and records, the sales, achieve showcase Pivot combined These to several orders. execution operational fourth our quarter, our talent as of performance and new full solid

financial the covering review call quarter to financials. I’ll XXXX turn our begin a full Turning year and today’s highlights Then, in-depth by performance Chris a and XXXX fourth the of to more of presentation, outlook. our I’ll our provide of to over preview

wrap I’ll commitments move to XXXX we on remarks our up with Finally, our Day the before report Q&A. Investor progress prepared

revenues sales our higher fourth contribution million, to backlog Within XX% quarter from overall acquisition growth with in Starting in higher strong led the XXXX all reflecting June. market markets. results, Defense of and record A&D year-over-year increased conversion a Aerospace last $XXX our a A&D, primarily sales and and and on Arresting Commercial by Systems achieved we Defense, XX% strong Ground completed

of in delivered We our Commercial also demand. we Industrial continued strong strong end Nuclear Outside General again markets. OEM achieved double-digit sales growth growth A&D, reflecting and Aerospace, across Commercial Process once

sales our restructuring basis very in sales quarter. the initiative. income higher benefits and exceeded the three Growth we in of and each to of excellence operating margin expansion delivered points strong fourth in operational this our This reflects segments XXX prior in operating overall and growth companywide achieve year XX.X% performance

increased our EPS and to diluted XX% with result, was adjusted a As year-over-year in quarter line expectations. fourth $X.XX

along quarter fourth in record million, adjusted of flow year free full XXX% conversion. delivered cash flow also single greater cash achieving We of than nearly a $XXX our quarter, cash robust free flow free with

of XXXX. XXXX pumps if in upon coolant reactor performance, into of our the the a timing were due payment delivery million recall, China, operational anticipating final you delay strong from Aside we from cash a $XX expecting to a shift APXXXX

Outlays, Electronics year-over-year, strong, X% and well as book continued Defense pumps before recognize Growth growing as and the XX% customer, and Nuclear shipping Through negotiations for with products. we our of final in in quarter $XX of our Defense to Commercial the boost the remained that order demand million or solid payment in in pace fourth received XXXX. reflecting principally late up remainder new the orders expect improved

results, our several a record $X.X strength XXXX including X% chain dollar. the a our the Next, Sales Defense recap, macro FX margin overall expansion, delivered EPS orders. despite double-digit record challenges where our based full increased level billion ongoing Electronics we segment record to continued headwinds, within X% the growth of supply and upon sales, US and headwind

achieved year-over-year sales exceeded overcoming significant results, while points growth margin program. delivered XX.X%. with and income The profitable Operating of we to wind the operating associated basis the CAPXXXX as headwind team XX these reach expansion down the growth record

billion, record reflecting increased $X.X overall. to orders XX% book-to-bill X.XX times New year-over-year a

billion. conclude solid with we result, a the a year $X.X As backlog of

highlight to of improve Another annual highest in which use total our $XX executed focus allocating best followed on share was XXXX the shareholder by purchase $XXX continued repurchases and XXXX, major record in to – share from We was in million a XXXX. repurchase value. capital million

We our straight sixth dividend the also increased annual year. for

like provide far, business in on better our our expectations. acquired great delivering Thus little update I’d Arresting which the a Systems business to Curtiss-Wright is of mid-XXXX, performed if than how extremely well, through a example Lastly, turning even acquisitions. an our acquisitions, has is to value not,

past the few contracts. aftermarket impressive Over volume we OEM months, of an secured have and

and and proven France, profitability International Naval is of boosting over within aftermarket overall overall fit the time. strong segment, target be other contracts to contribute Integration our our our well a with UAE, to solid mid-single-digit very has exposure, going CW’s margin countries. growth sales awarded to Power and while expanding on Military In XXXX, this XX% operating by is sales, business delivered annualized expected and business strategic

to introduce driven I of markets. growth in increases like our major end we sales Finally, by mid-single-digit where overall nearly our are guidance, projecting all adjusted XXXX full year would

while organic operating growth. development continued externally expansion, and margin both future and internally research We incremental investments expect making to deliver in funded

cash million We solid EPS cash with and strong flow. free reach expect to growth, diluted next in in year to deliver the generate EPS free flow and growth potential double-digit $XXX

have and well for outlook. backlog well positioned extremely bodes are growth our underlying long-term for that summary, XXXX continued demonstrate the with Day. and success of and we we Curtiss-Wright’s remarks, demand we to Investor strong, our fundamentals strong our target the In line Business portfolio we which sight remains year across enter as in at achieve communicated financial in XXXX we’ll three-year later

over Chris like the to prepared with to continue I’d remarks. turn to call our Now, Chris?

basis, Okay. than Thank impact you, more Lynn. drivers XXXX key excluding of begin of on I’ll Aerospace by quarter with overall, FX. an increased In fourth X% Industrial, our the segment. the sales or results organic but XX% &

results Commercial our Within widebody the platforms. reflected narrowbody segments and continued demand Aerospace both market, on strong

of Products and our those production sales Vehicle were Surface various double-digit market, segments sales Industrial reflected higher Services. partially the market And growth of on the Treatment General the Defense In results due sales timing by increases to Aerospace programs. reduced driven offset by Industrial in

segments’ impact and favorable absorption margin. profitability, that results operating organic services the unfavorable our on sales on higher products as which Regarding as reflect well mix some

segment, Defense. of Electronics in the of increased Defense for chain challenges, the fourth on we with in as well Embedded in performance. year Ground Aerospace higher Next Computing Communications Sales and despite XX% sales supply Equipment revenues growth concluded Tactical Equipment Defense, the strong reflected various ongoing programs Helicopter as Jet quarter a Fighter

XX.X%, while adjusted points the higher revenues. performance, on segments’ to reflecting A&D increased operating margin strong income operating to XXX increased absorption operating Turning XX%, adjusted basis

business. Naval the driven Next high by market, XX% the contribution Columbia-class as up in Naval Arresting Power on higher as Systems our single-digit & sales well reflected organic principally from program. In revenues the segment, growth was the Defense growth, the ramp of submarine

aircraft the the However, CVN-XX of due $XX primarily carrier million program into XXXX. were to our results revenues timing about lower on shifted expected which than

the in increases to in in & strong the program the of and $XX fourth XXXX. XXXX, more note, the operation production year quarter, than on expect These CAPXXXX Aftermarket In revenues down on full and CAPXXXX revenue the remaining in million Process of reactors, this X sales valve basis, Power and program we increased offset market results revenues decreased program on wind demand existing Gen a $X Nuclear advanced in reactors the are of the in recognize supporting Process. supporting reflected higher million

performance sales absorption our the our Systems higher organic benefits on in the year our and strong reflected fourth business. restructuring of Regarding quarter a segments’ from prior initiatives addition to profitability, favorable Arresting results

overall, of in and expansion, operating basis the generated sales, the XXX points year-over-year fourth To results our margin combined growth to we strength XXXX. and solid portfolio up sum strong highlighting double-digit in finish quarter a

guidance, year headwind our includes offset full we and expect to line our to on the in Acquisition, Slide projecting of sales their we’re the Arresting Systems end grow small which guidance, growth with turning I’ll X% of from X%, X total by FX. long-term outlook, sales a ‘XX to X% to Next, partially X% from contribution begin organic where market sales

of growth Electronics from various Jet the Systems increase well mid-single-digit will sales actuation partially where the markets, A&D offset as to Aerospace within with A&I reflects are segment. growth start as on to X%. X% which our to Defense, lower In Defense be programs, for revenues expected by organic contribution XX% Arresting business, in Fighter I’ll X%

higher Stabilization Defense, international sales Battlefield Ground Communication increased In for X% reflecting well expect revenues to X%, Turret as of as our we Tactical Systems, growth Systems. of

revenues, Next, the in OEM the up Naval X% programs. sales on AXXX and Defense, XXX production the Columbia-class aircraft our submarine strong X% and our AXXX. by X% aircraft driven turning the sales in carrier on markets including to Commercial A&D driven X% That to ramp principally reflects up including Aerospace, production and and XXX outlook wrap by growth the aircraft to for CVN-XX both our higher is higher and outlook for rates widebody narrowbody growth

market also Our in this a guidance X% from headwind FX. includes

expect flat Commercial & we our to overall. overall X%. Process, now flat Markets, Turning In expecting we’re sales be up where Power to growth to

headwind $XX this outlook includes a million. However, program of CAPXXXX the approximately from revenue

mid-single-digit expect Nuclear that Excluding we the impact, in Commercial growth market.

increased Gen life advanced our reflects ongoing that nuclear as fleet, recent X-energy. with notably most tied supporting agreement to maintenance subsequent renewals reactors, the extend license This power well existing of sales and as for demand generation solid X

Process demand the We subsea also reflecting pumping in supporting for MRO valves. growth solid our continued expect ongoing and development higher market, initiatives, mid-single-digit revenues,

Industrial Products driven from by market, Surface Services. and to of we Industrial X% growth expect higher General a the in including X% Treatment Vehicle Lastly, of headwind sales X%, FX,

program, Commercial would As we the be X% it’s combined total growth important X%. the sales down excluding to to on market, commercial of at overall look that the CAPXXXX wind note

& grow segment Industrial, Continuing sales we a FX. with begin Aerospace where to expect in I’ll to Slide X% our X% X%, headwind year or $XX by million outlook including from full X. on

General is for and this segment the driven sales and by defense. by in both Commercial growth Our solid Aerospace Industrial, partially offset outlook of timing

We to and continued the adjusted of benefits XX.X% X% operating XX operating expansion of to initiatives. restructuring range growth basis higher our a XX of points X% and sales, to of expect to income reflecting adjusted margin XX.X%, prior

by driven supply principally Electronics, we order business’s Defense expectations this to grow in X% X%, for Next, sales chain cautious improved and record expect stability. XXXX to book

adjusted growth XX expect We based XX XX.X% and income adjusted basis expansion XX.X% growth. of to operating to range XX% points to operating to of the a revenue strong upon of margin X%

flat, CAPXXXX be Power our income mix in revenues, XX.X% to & Naval in And growth solid from expected Naval Process lastly to Arresting development the XX.X%, lower we in negative and essentially and on & contracts Defense, mid-single-digit margin margin Commercial and both to while shift Power is our expect a Systems X%, the to the acquisition. is the Nuclear driven from to range by lower market. sales markets reflecting in contribution projected grow both segment, X% operating growth Process to Operating

will Excluding those operating nearly flat items, segment the in year-over-year. margin be

XX.X%. So to pleased to in our ranging XX continue growth, to deliver that summarize excess basis strategic on expect to investments. margin as we expansion we points of to from of expect note, Curtiss-Wright overall, X% XX and X% And operating sales margin growth we focus improve total maintain to to operating income operating I’m XX.X% outlook, our

year-over-year outlook $XX development Our increase research both contract and in including million XXXX A&D more total than programs. a includes for investments, and our of

most start all classes. pension a outlook XXXX non-operational on nearly difficult pension our asset Continuing returns with a provide I items, plan. and X, with plan Slide I’ll weak across year sponsors some XXXX were few as on was our financial wanted for color to

negative the pension hikes status. rates discount impact helped short-term However, resulted rate funded returns Fed’s the on impact interest and the and to in aggressive mitigate a resulting our the on of asset impact minimal

year-over-year. funded status percentage In increased fact, our

by early funded took In plan status a steps protect fixed path plan, income funded the closely of plan we and the de-risks more to implementing strategy glide by match to the status investment also improves. that our XXXX, liabilities the increasing as allocation

the goal reduce Our the is of accruals. as plan to volatility approaches sunset

sunset other in now not planned to cash for contributions importantly, income a in are $XX we XXXX. approximately expect result, of make expecting a the we tailwind As XXXX. million to date And do any more

a due unchanged interest as expense approximately rates XXXX, XXXX with of of And year higher XXXX. revolver be in anticipate impact XX%. $X our at tax or and rate to primarily our interest the compared we $X.XX we lastly, in Next, is the to enter headwind represents approximately which rising expected million

Turning to items. X% XX%, to EPS our in from guidance, below XXXX up X% approximate an X% to we year and range growth the our adjusted full $X.XX, income mainly operating line the to EPS benefit diluted strong expect $X.XX reflecting from to

first adjusted your expect but year, XXXX last first our quarter mid-single-digit with the relative cadence to our year to expected quarterly lightest, reflecting in modeling, our follow we aid a be To EPS. quarterly growth to prior quarter to EPS similar

quarterly our in full earnings fourth expect including per half. the first XX% the approximately improvement the sequential with strongest, of of For our XXXX, being share remainder quarter we year

to turning guidance. Lastly, free cash flow our

cash $XXX million full year of projecting We’re adjusted up to million, flow XX% XX%. free $XXX to

Our higher those is driven to cash outlook for impacted improvements accelerate particularly the in most through disruption. and businesses and as by by we working down inventory supply chain our burn expectations excess continue cash our earnings capital collections, for

the Our flow reactor this our of China. guidance these tax full collection note, remaining receive to invest related to million we our also $XX coolant XXXX the targeting year exceed changes, midpoint Based to cash Of section conversion rate to to we of and we’re cash free also growth, support a flow our includes expect future guidance. while pumps XXX% headwind cash R&D final upon CAPXXXX payment on delivery as amortization. expected which the is our facing based XXX million upon the $XX of

remarks. back And to prepared now, Lynn our I’d turn to the like continue to with over call Lynn?

on since on some both you, follow some we’re in faced an the the XXXX. updates positioning sight providing with to our as to next negative I’ll Investor how Day. of three-year commitments Investor Pivot Growth that I Day our line to the executing Chris. changing maintain the spend wanted XXXX and up Thank organization few and demonstrate proof have dynamics, positive points May strategy to minutes we to that articulated business

help the number the on continue Slide, where long-term Curtiss-Wright’s Starting positive we side a that shape left-hand have to of growth. of influence

finds as bipartisan Congress budget. the spending strong consistent for the appropriates budget, seen a receive for two legislation there to is $XXX US this ship ‘XX strong support which growth. we’ve First, XX% for Defense continues and reflecting our DoD billion program. recently, largest support building the and bill Most Within funding for the carrier Ford-class FY year-over-year aircraft critical drivers, end Naval submarine the solid markets growth these Columbia-class

long-term Global of and outlook countries defense growth end the Outside ramp Russian-Ukraine in to many conflict began, our markets. increase have a provides defense Defense spending in up our for propose since improved of we member or NATO spending X% greater US visibility seen support with An the Curtiss-Wright overall GDP. across

government important passed, Bill, pieces including Act. Infrastructure defense and the we’ve of several budget, Chips legislation Act Reduction US the seen the Inflation the Beyond

and through in the bills our funding growth These well support advanced based build for infrastructure our the reactors. as to opportunities Industrial provide business construction, in both Nuclear of investments out the Vehicles and nuclear businesses existing next-generation as upon highways

energy carbon-free importance and sentiment energy We push globally, of independence. the the pro-nuclear by have for rising also driven seen strategic

growth Generation modular Westinghouse Europe, are plants the to in built future positioned or in market be well this and developers. our power alignment advanced long-term upon X We support APXXXX to small for with numerous reactor expected based Eastern

markets, sales XXXX, than each Notably faster pre-pandemic year expected as Industrial Vehicles one recovery, and to a recovered and anticipated levels our two XXXX XXXX experienced faster than markets in in our end of originally Process have respectively.

not according course, the the Of to everything past over has plan gone two years.

Defense the of faced have with macro companies A&I headwinds, our to chain, our particularly industries, Electronics many our supply and along disruption impacting segments. we Similar several in level in

to to prolonged impact in components issues of these be our balance to business. should stabilizing Defense Electronics chain, that supply move and the improvement more lead levels the a some the not as while we previous critical than be times likely we there appear expect Regarding year. return XXXX, much are Conditions had on on through expected

On costs COVID-driven financial following macro has growth the the deliver labor dollar. economic dynamics. in have in as – rising and we targets Today, US these interest led as the rebound despite final well XXXX on accelerated front, inflation, downturn our to to rates, US strong a continued

although – the faced budget day halted new program budget FY with continuing line DoD of the which slowed following starts have projections on you faced the recall, programs. we Defense, been Next outlays were XX resolution, year in delayed last strong, we key top and XXX signing if

As very greatly into the beyond. a impacts of recognition pushing sales result, delayed some of it our XXXX, and and order the book, strong in timing revenues XXXX

Looking hasn’t is the broadly markets, terms This both levels, XXX Aerospace. AXXX that across end post-COVID to our in and the programs. the the and expectations return in even XXXX XXX is narrowbody performance quite targeted recovery slower principally AXXX due rates of up including more to to in in a all our lived production Commercial widebody in only of platforms, market and on on really

our work pre on one XXXX. based beyond will later our XXXX, current customers, to end our from while narrowbody by about continue Airbus, Boeing the expectations. business – and and projections this extend We it rate year now production with to Overall, recover previous widebody, closely of expect than is we

for Curtiss-Wright Next, the several a I’d outcomes side to strategic and of the position are which like favorable slide since Day, long-term Investor function share profitable our growth. right-hand to shift of actions to our

to to providing on consistent million in and that shares focused returns strategy portfolio. and We’ve we have added remained fit. acquisitions $XXX shareholders committed as disciplined acquisitions exceptional have allocation capital to high have and finding quality repurchased the We financial are strategic remained a

addition, past gains $X.X the orders demand including for billion, from across our reflecting as we In of the year Arresting more two of record and our noted generated earlier, and solid products PacStar and strong Systems acquisitions, contributions this recent portfolio business. services,

Supporting portfolio. have and which growth on since across well and notable in a to numerous businesses, this we R&D led focus wins in across books technology investments collaboration our the innovation, consistent Defense has order as Commercial maintained crossover a as XXXX, and advancements our

with our position supporting We’ve highlighted in modular across teams new which X-energy, strong Shield a press our have Enduring for to more more with examples months recently, with where Aerospace, collaboration strategic provide Dynetics win which developed sharing achieved Ground we their the Actuation many small look Commercial Electromechanical example, of was reactor, secured these years we ahead. Defense platform, a number for technology, in and releases to the forward within was and to Curtiss-Wright, many originally through

slide, this to our proud regards expansion. operating favorable drive In on excellence ability outcome continued and operational last am extremely to I margin the commercial of listed continued team’s and

financial So corner type right-hand the conversion. at those targets as five Investor last Day, shown our remain and to of achieve four line targets of on we have reference slide, track sight reflect which flow upper the of we free our cash for the are introduced in first three-year on on squarely –

remain growth an income XXXX expect as over over to we to in XXXX. and top approximately Operating operating organic Based demonstrated group, margin excess consistently at our guidance, growth. total since of the a excess period, three-year peer quartile upon to X% the that we’ve revenue is X% including grow expected of performer relative CAGR X% revenue grow timeframe total midpoint CAGR of in we of our

CAGR guide. reach EPS midpoint of XX%. on also to our target are the based We minimum Again, adjusted track of XXXX upon our

at our very XXX% average cash Regarding average free conversion, conversion. of we’re our achieve target to guide flow current the final XXX% rate of yields midpoint close

potential this driving Our on continued the record cash a team has to million been free generation, flow diligently focused strong year. we and $XXX generate have

more pressures of our working on continued entire Investor nine than conversion adjusted cash and supply the free XXX% As our angle we to years. our flow chain working for both our flow, particularly revenue Despite Day a reminder, free challenges, every financial conversion deliver target cash the to delivered are on fully achieve capital, and XX due of past slate commitments. impacting possible we’ve

enter Commercial this to In with XXXX are across we summary, positioned A&D deliver again markets, and backlog profitable well year. and yet growth strong

exceed Growth We the execution growth reflecting sales are long-term operating strategy. guidance, Pivot in our projecting growth with to line of in income our continued to

strong We support cash sheet are strong also on flow, balance track generate our growth in adjusted to and allocation a free strategy. healthy maintaining while capital to

in year, third look a forward growth trends strong committed alignment beyond the remain remain our markets during and serve influencing with business. long-term closing, shareholders. Looking Curtiss-Wright Day healthy, commitments for In final long-term to generating we performance year our for this the very favorable to strong we to our prospects delivering secular value our of Investor and

At I this like today’s call for conference would up time, open to questions.

open questions. you. now Instructions] Thank The [Operator floor is for

Our first question is coming from Peter Arment of Baird.

Lynn Chris. morning, how Good are Yes. you? and Jim,

Good morning.

Good morning, Peter.

morning. Good

supply these maybe provide improving first Thanks. sounds you level going in Maybe on of half. the if detail second to some your the just side. that start on competence could just Lynn, abate stresses is on more that? just competence Hey, chain a like the chain supply little It is

very time year variety on component measure calls an have predict just we a know we of in last I you’ve much we you the competence supplier us allocation, continue this thank time, It’s And, we measures, for over you supply year volatility, of of clearly put in know, on-time things. that, how you. a think to lot commitment delivery, deliver and chain. Yeah, past analyze, vendor know, our something parts you mentioned a and topic important can lead – variety heard us really

numbers, in those great they’re numbers, but seeing stabilizing we’re that not performance in improvements those on. seeing really not we’re we’re frank, be to And stability

to better you saying are supply know, in be things chain. be know So, you the dramatically we’re not going really

those back continued and our ‘XX very lead know, a hearing in volatility, that, we, company, will have reduce they is ‘XX public we know, the believe year. are will time parts continues to of commercial that, expected the and the know, end of metrics for to to back the in these as to lead this some this demand in you suppliers much from the out of down half definitely you But year have abate some work times you half that the a come long very think other I improve environment of of as over really through in of, back course

for a with reason not, going know, mindset but there’s pretty that know, in working market. to But So optimism, we’re you volatile we’ve live you still changed we’re we’re a you system. know, there’s also, our

I the you QX technology environment. supplies on we until of volatile in take year, how I suppliers, know, hold AI how, deliver the an on the call leverages we But that in the new know, volatility playing patterns us incoming and maximize it’s turn last really tool end things just and can a do order beginning various on us think and to the on help based predictions for, in that we’ve you to ‘XX. mentioned of turned that to really scenario helping

And and just bottom February a looking so, on to you the strong. order great book, think off in is, with the order there. a book demand January Honestly, know, business year healthy, is the line start had this great we to the I we’re being continue is

variability could we XXXX. we But to $XXX face good to in of still $XXX for about So the really provide million range guidance million the business. we some adequate pick the very consideration feel

Appreciate follow-up. those as a quick details. just And

know, commentary period, Nuclear were most that space including part about about Day you kind Process. recent talking to XXXX mid-single-digit think we any talking in were that that Just of today’s new excluding the Nuclear low-single-digit you where on back the difficulty] your you – [technical and and a in was was of if growth, the growth in presentation, Investor

think know It one do we’re either You how flow or just see seems about think kind how up could small your we faster initial some the know, activity, markets, being we expect we growing year? should whether activity it’s, to growth backlog like, of of modular going know, this about of water with order some that Thanks. you or this you end for reactor the when Poland be flow?

and continue So, has that renewals, you of that, definitely, flowing know, from portfolio, we’re fleet you you optimism had you know, know. for, it the revenue is the half surely when we applied of we advanced growth our exciting on, one Investor sub part the you Day, expanded know, almost Canada and, know, for money license definitely US but know, we process has the their did in recognizing reactors is that, the know – that you you an same

and know, is is you South about, but traditional I tailwind put on area know, you what a US, know, build you Korea. here speak new to, what Chris the you predicting, know, the think, we’re and great another there really talked between just in focus the not Canada aftermarket, presence, where we’ve we’ve the markets, we’ve had

of to both Westinghouse have fleet. then support of France, their and across existing into some they maintenance block, Eastern reactors, But really obviously as new the more the of for build, but with internationally, work in also in issues lot trying European working a

geographically also trying support area. to And the boundaries push that growth in so, really we’re to

recently, in just orders were say I’ll that, know up XX%. know, And Yeah. more you you our QX

the On really full outage year, up project in the new you small were showing know, advanced XX%, solid on aftermarket, we they increases that you course, then, the wins modular mean, maintenance. strong have And I just, of improvement reactors. know, in

into to You it’s going mid-single-digit be know entering growth. ‘XX,

working up growth of And our hopefully APXXXX beyond turn know XX to to be that rate over past mid-single-digit really know of contract, and to and we’re we within and point know on expect the we side that at, start that’s puts you at some years you these And over future – two market. run or from thinking, pick continue know, production when know that into us here but that of more think low-single-digit when you by you this the higher. to solid but that years ‘XX that’ll and projects the and now, shift that, know you development know, a encouraged – this I the you change significant like you X-energy the into the

Appreciate the guys. details. Thanks,

Yep.

from Our next is coming Research. question Myles of Wolfe Walton

morning. Good Thanks.

Good morning, Myles –

about the it at in it the Day and talked think Investor seems is to And, – Investor of in strategy, the you back be commercial pieces you Get wouldn’t interesting like Day that’s as front? results ‘XX? the actually inflation perhaps curious as expected know, and particular, I pricing you I’m And of to one good is well. expected you’re that able or things in you than strategies, offset pricing. the on particular, commercial better pretty tracking

have way board. know teams didn’t be needed I’m ramped know, sure know, taken Day, we the inflation had you really it on a had you make And, as that a done you across you this would started, clauses you the the know, impact to have, at anticipate you really, know, our as as working know really you job the and already know, team Yeah, much and great escalation the such. contracts we Investor know, glad really in you to in necessarily

because results which and inflationary they that monthly targets is, we to you we a do can you Curtiss-Wright. sure them, at has an is tracking keeps margin, in the operating you you paying is reviews out, know, our no be gone that we’ve seen most know, we well, competitive they’re you know, expand we’re on across know, all organization, set, know it is know, the to you our that, area to know, fundamentally ability real, report financial make you see is and know, it’s towards are rate at bringing market So enthused doubt to working our very the there staff and, that really working material you teams, how pressures

some cost pressures operating and. that has know we But in margin expansion you the with that, And know, driven delivered you organization. the so,

practices, really know OGP doing out this plans is those of we OGP in XXXX, other You you know had teams across you of know they’re that came that know one the and very scorings. businesses every our best can that teams of that completed teams best practices assessments really be things shared. the to across sharing specific scored action the year And great various you identified and working those have

it very able has very, been the know, achieve. to Curtiss-Wright you contributor we’ve so strong been And results and a to

Naval therefore, margins ‘XX. mix heard for and Is loaded second, margin know, side. in is then the And for level development maybe there any high down trend CAPXXXX number the the would Or type & of to mix you the the on just of longer-term in here a bulk And Power the side? be sticking decline the ‘XX? development this this I here revenue? shift

overall know I $XX do know APXXXX the also increasing to about you investments this that’s is year, know you of for of do But, C-Wright. and know you total It had is shift downturn. Myles. an about you a next our think we talked increase the bulk have mix we know we fair, related this million R&D you in

be roughly of bit is contracts a sizable say I little two-thirds of this in we’re a would of segment, And mix subsea that as going portion development a unfavorable to pumping that. seeing and result

the contract $X look have And a know to drivers. forward this are million as But on we to ‘XX. you those about fiscal on done we’re that want do talking APXXXX really I we the two contracts. don’t that’s say driver. So, completely on mix remaining main revenue main year

just capital one And deployment. cleanup Okay. on

this maybe to notes pipeline? the a as coming think due the can refi So guidance XXXX you’ve comment you or if anticipation I repay, in interest and on M&A got the just in year then broader

more the We coming the due We talk start Sure, I’ll with Lynn actually have ask successfully financing, $XXX pipeline. this notes in to revolver. and off the the do then off month. about little year of million a finished maybe bit

able a here those notes. are we to little down we’ll of know, year end. cash be But bit build at you paying So up

going we that below know, quarters know, with few climb here were the would going us revolver put and you it’s a be you be estimating is conservatively do there, average at looking you interest to that to revolver are, and is know, you you $XXX million, think can QX X% the on you know, about X% easily in what that’s you cash we variable to I know we anyway, typically And be they range. say, but might for of but about on rates tune quarter know, the across, slightly those we’ll the to outflow more will a us I movements three know

still we times you – finish on the took back that we year about about we us debt-to-EBITDA. know know, those any as you for very got or absent you we our this X are. the notes position we in rates major good programs buyback below acquisitions, at So, what look November where kind you to you And we know we feel feel of I know, balance year. mean, sheet, And, share great we’ll know, that

on I line. out pipeline. And industry just you start easily on properties are, know, across acquisition years to floated the have us that, that to we will, process with, properties being then, come touch over heard you’ve properties I know know, that the you one the definitely you know, There’s say engaged and the were guess, finish in XX

I’d early would both you working fitting know, within continue properties. potentially, you fit interesting which pretty So, do I I you strategic feel but we’ll could say for I in a know, that some there’s discussions, that it, high very we’re Curtiss-Wright, to and actively say things find know, properties that us, is, were but bar financial with, confident see

thank Okay, you.

Thank you.

Jones Nathan from coming of Stifel. is question next Our

Good morning, everyone.

Hey, good Nathan. morning,

Nathan. morning, Good

rest improving, Maybe it’s you if you the to the just you’re chain you the the what to improving, it’s where a Defense business, discussion, and from XXXX? supply color could the of where chain from little on, if of expecting know, not more know, the broaden it’s provide just Electronics rest improving, and for supply

being so impact a about it’s Curtiss-Wright. much good to know because biggest Electronics the Defense question, you talked Yeah, we’ve

of we when still still extended across mentioned know there’s use lead seem various lead talk some know, just extended you know, metals know, of the that volatility, minutes the But know, our in weeks know, yesterday, and have, know, those monthly You to, we thing financial we one I plus we it, specifically, you XX few none that, issues you teams consideration. up, you other you ago, the and talked talking of times some in of procurements delivery have. did you you we aspects was know, reviews in about Defense, we’re times got in

– you may year, any that know, pressure some so the example, make is we but in you definitely the having extended things the it know lead anything something with. quarter, materially times don’t within but being, to see deal the really else teams impactful So, are for managed to are Curtiss-Wright,

you are you other much like has of and products, those break of delivering stabilized So, much has some cost those know, pretty pretty to us more parts good normal know, you building normal structure. in returned come, know, things have and

that’s So a us. good thing for

on margins? on could cost any maybe price then and in in positive And on we us estimated what growth give basis XXXX? you contribution again you’d pay to expect in be the then it if And us Was diluted or willing ‘XX, cost in Do XXXX. neutral you’re expecting color you ‘XX, ‘XX? in organic impact to price to $X if to to price price give

Sure, yeah, I’ll that one. take

our within, know, the within lot have side of some know, commercial you you mainly escalation government as know, a Lynn successes in you know, commercial our had contracts built we good You clauses. pointed or to, businesses,

into the wrap here. So that kind I discussion of won’t

the what represented And A&I impact you stay able would you say But, our was XX the at as you growth rate of across ahead inflationary I would you the our in you points. segment, look of were net say I X% that that, basis to as know, slightly know margin, it’s to approximately XXXX, know, roughly we look pressures. cost

it’s, will that year be businesses know, we’re to side heard this our look of X% that know, of increases growth contract. good through this been news into secure you our as price projecting year, rate they’ve we’ve renegotiation for as we you well. about, some able some next long-term coming And, continued commercial of And already the out the forward on of pricing

So I fair kind ‘XX. or think you good of assessment, just a talking whether know ‘XX you’re it’s

for much very Thanks Great. taking questions. my

Yeah.

you. Thank

is next Kristine from Stanley. of Liwag question Our Morgan

Hey. Good morning, guys.

Good morning.

morning. Good

you $XXX year arresting So, Lynn, for bought business about million. last Chris, Safran’s

below be to leverage. trending already You’re X times

can’t I are in are actuation There’s discussion you how the you Raytheon’s M&A, versus can speak about more industrial some business, deals. done chunkier chunkier of market transformative Crane’s future in think looks are bolt-on the and aerospace opportunity? a it that of potential you’ve thinking specific But idea think how you I there’s past larger us size. small about about an assets acquisitions? in like know versus For transformative like acquisitions bolt-ons assets. give there you small

you know, there’s six that quite to properties you you either three definitely open the So few play next market to being know to you’re a we’re know, right, months are be headlined in in coming, to or, the both, months. and

And it is an is so, – there time. active

carefully. from cost the I our does you that know, cost actively capital. very return mean, Chris rates it of something is But, decision on our talk monitoring I we capital, take making and your about, interest your and weigh into might something principal think about consider you and

excellence really, you you you you those raises isn’t for operational strategic ones ourselves doesn’t, part you bar those – our, one, know acquisition ongoing to overall even accretive are we of but, are know, consider know, XX% know, consider, an initiatives maybe know, to of don’t you would but dilution know, to the that, create to dollars a you and from we growth we we’re confident definitely fit, year that’s out goals, good margin know, know, you our to that the if of when trajectories do cover know, acquisitions and it our not willing we when again, fit that still really the meet it, strategic it find is that margin, challenge business. you bit financial a And, we in

the know properties think you say, I we’re know, So, know would we projected that you active, to come. are I

have finance in community. banking I connections think the good we and

across with and So process on that, do we’re you you line know, finish you it we a the we the considered the know we’re and reliable take know, buyer close company, businesses.

to somebody So, in general, we’re engage very I positive considered think with.

an A. plus, last of range, pricing graded, say I but the investment you I’ll say more I and we be that our of fairly us in secured notes debt a done kind in to notes successful Again, consider is would market the we’ve BBB with know been those

$X.X now. have debt We billion capacity for of about right available

And been the and sheet we’ve the with back we’re about been when pretty we’ve strategy, you and since talking think doing that XXXX, at and we pleased that. using balance deploying way you’re know I acquisition the look how

Now, or go to we’d transformational the a know, you know X%, know, perspective highest along, I think, quickly probably that you a de-lever you know you debt-to-EBITDA if we X.X% something know, back would down more is, X.X%. from to were you come you but, know,

to acquisitions, just have And I when much explore between very, revolver, financing performs, to on know, EPS different on growth, more suppose, how know, you can put to you you stock to is differently, you you talk transformational the notes, I you have the know, short-term very we’re think, focused know, on, about you while options know, better our you you about, market. know, and the that right, currency the starting you’re think better

lot there’s different to businesses So of a and right that think are pulling ways in fit. strategic potentially financial about

Power. follow-up a and Chris. Nuclear maybe could And Lynn if color, the for on thanks do Great, I question

their many that anticipated, countries. in here believe dragging the where an indications competing longer I upcoming on make seems right, just for take decisions. is You already. war we’re you know, countries the from more seen know, time or Ukraine you’ve could And the customers? historically, It it that the like you investments hearing either lapping year recession? from highlighted priorities can’t are security they Are there your funding accelerate rank What you with these of independence preparation Should does long received MoUs Eastern power any European orders? you happen? first Or we’ve with a look, know, some to than

seeing you they’re color Power in how could terms of for be any great. provide So would Nuclear priority

for know, terrible. And And it’s priorities. it as hearing. being hearing forefront just at that their that And not yesterday you trip additional Poland we’re you was said, and does but morning It’s stays a And of, you on believe a what think think Biden’s that’s the Poland. been, was you independence energy between have we’re with when President definitely you little there so, year? this think absolute there galvanize to of been there can going I as that, necessity? press movement Westinghouse an I know,

But us. discussions show, just again, once that about to ends. activity the Ukraine indication So, that’s helping continued and them going this Bulgaria-Romania, with war various you those continue know, no be think to you continued still know, returned. And things means what I drumbeat how of across the there of for

I consistent. like the feel So, it’s priority very remains level

for Great. Thank that you color.

you. Thank

is question next from Truist of Ciarmoli Securities. coming Michael Our Instructions] [Operator

Hey, good morning, guys. Thanks for taking the question.

morning. Good

– expect that to you order I guys thinking topic. Lynn just this how Lynn do mean, actually on you Maybe, how are year? you? pump are about stay timing, if an Maybe, get APXXXX at Or order all?

and Kristine of said as time. So, the timeframe. had you we five timeline, in the was us an ago, year And, know, because was into that takes call less kind longer, commenting, their you know, things, years, just most the of three know you know, really the a backed when you to of we we Poland know, one not you said, we anticipated XXXX-XXXX saying, on it forefront order which usually

to years years, that’s you in we still, put point four this two order know, know, – you that. based on So in time, two at an

know left. a article between whether We their news the and signed trying and was what know, was, that left, little this know, you to and potential yet. they’re order about mean, to the agreed pull program to I that, Now, snippet you our Poland but pulls to Westinghouse, don’t

So some in know, these and bytes shows push you you get you the, you through you you with very think you I really they across to you know, ability working scale, these in to up it running. I know, to these areas, pumps, know, closely our layer you know, know, build hard in to builds. advanced pumps, worked it. subsea the know, plants little reactor some think layer operationally and Westinghouse, companies the know, very APXXXX then know, wouldn’t know, there’s other, and just of we’re of then speculate we’ve I and, news consistent, similar And, do think on But

customers, we solid, very know, with supplier. because So it’s really, our a you know you we’re transparent reliable want to be

prepared. be to And we’re able sight so have of to we’ll sure line good make

predicting this order So this definitely, we’re not point, year. at an

not, two left? calls pull to we’ll if if few years even that. we definitely details you learn them that, But in don’t So a know know, share that. We do definitely more on there’s the four put on our little color of of

on the Got And it mentioned then spending you touch more it. bit you’re little pumps, Thanks. development. actually something like to wanted subsea I a on sounds

maybe a expected can know is margin color more little that the little of us you just you bit subsea this about market? the pumps? year, on Sounds like bit what maybe give headwind in it’s elaborate opportunity And a a revenue but

going so the are projects Yeah, well.

And, for know, know, So revenue know, know, Chris you really, by of think each you this you this Curtiss-Wright, I really, the major to significant back you mean, opportunity through driver we’re a the between portion as one you as those size million plowing and you decade. know, the in you has $XXX very it know, those be is, year. know, of know development on for, pumps XXXX. And, this has we we you market value today, Shell Taipan, mentioned,

those to potential this or to know and So, pump. we stop intend don’t two with customers you companies

talk. you gotten just, so, less that And know, it’s

years a targets customer our But this come. unique very reasonable technology, them it to bringing up. for know, has great with that So yet you it you know And, and Curtiss-Wright you is decade make is that fantastic this to I very that business a price provides Curtiss-Wright them. capability struck will we’ve another appreciate you know, hence in beneficial area really for to

the right just have rounding a have heavily know, you mind? mix And a do portfolio overall defense, know, guys you market you’re with more any one, it, M&A. then it. transformational? know, you color see, with markets helpful. comfortable on provide bit target additional little how I out you or tuck-in the mean, Got in you towards something you you certainly the now? maybe just going last the Got Do end Are skewed more back You of M&A? it’s to could know, you whether overall

over and past the our I we are is defense, are areas know, as limited but end to you you Electronics very growth has definitely been top an years it are that, of but we’re you area systems, Defense look have preference our not would area, know, you know, much priority on definitely mission-critical trajectories our across at as seen all you’ve we the that handful you focused markets. say, for us, safety So, know,

of know on you the all end like know them X our you come a know, capability target help markets interesting. our be revenue do reactors, build really could the might and Gen across acquire to see you We potential out to maximize could that us

team that to Industrial build Vehicles. they’re out market and the expand to offerings continues in product the Industrial bringing Our

a not an open be seen targets, of to. that’s we an area So we’ve area potential lot but would

a carefully with know broad across you pleased know, we that markets, the we pretty you our trajectories know So, acquisition really the very in so you end really see can are board. and we’ll potential consider

queue. the back it. Perfect. in Got guys. jump Thanks, I’ll

Michael. Thanks,

thanks. Right,

this at no to Bamford, Lynn questions happy time. are further for be I’d or additional return Chair to remarks. there Officer And Executive call and Chief closing the

earnings Thank we with and everyone us you, call. first for Have day. a great XXXX our during you today quarter again joining to forward speaking look

quarter full disconnect concludes have at Thank XXXX a wonderful and This call. day. and line Please today’s time fourth you. Curtiss-Wright conference year earnings this your