CW - Earnings call transcript Q1 2018 | Curtiss-Wright Corporation

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Operator

Good day, ladies and gentlemen, and welcome to the Curtiss Wright First Quarter 2018 Financial Results Conference Call. At this time all participants are in a listen only mode, later we will conduct a question and answer session and instructions will follow at that time [Operator Instructions].

As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Jim Ryan, Senior Director of Investor Relations.

You may begin.

Jim Ryan

Gigi. you, Thank everyone. Good morning, Curtiss-Wright's First Conference to XXXX Quarter Call. Welcome Earnings

President the Joining and Dave Vice Officer. call Adams, on Glenn Chief our our Officer are Executive today me Financial Chief Chairman Tynan, and and

those on defined replay call can SEC. statements the of well a website. of available include our our at as with the certain for company are based Our and performance. press the through be projections and in risks the presentation that A statements statements forward-looking detail today's guarantees as is website These and copy Securities forward being on public Act today's the of today note, Investor and also release discussion looking Reform uncertainties not filings financial download as current of found with expectations future are this are in call webcast, Relations Please www.curtisswright.com. associated Litigation management's section our are Private of XXXX. We will

addition, and the In is translation, earnings organic any exclude measures the to on foreign discussed of unless of in available A be release call references will today. acquisitions the presentation. the and Please reconciliation end growth this noted. note, non-GAAP currency divestitures otherwise effects at certain financial

Now things I'd to started. over like get to turn Dave Dave? to the call

Dave Adams

Thanks, Jim. Good morning, everyone.

two I'll updates acquisitions: well quarter For overview quarter more our Then first agenda over TTC to the an guidance it to update Dresser-Rand. and highlights first review our recent our today, our as the on year performance detailed and the with our provide I'll outlook. of turn financial begin to for of most full XXXX with as key a Glenn

higher before on up performance. and were to sales operational our Q&A. as improved our first prepared wrap We return quarter drove I'll strong profitability we results move a remarks pleased with to Finally,

of our XX% X%, which We we growth solid sales end result, most of delivered a organic. our expectations. markets, EPS X% increase experienced which gains $X.XX, diluted exceeded driving in a in of As to was

margin margin first expansion solid up We operating in also XXX achieving an quarter, XX.X%, the generated basis points. of

first $X.XX. So exceeded full by in summary, and guidance year in we our organic XXXX quarter, EPS expectations raised we the

of expect to the another this in year. strong free sales growth, diluted expansion are For an we expect and generation. we quarterly and cash sequential XXXX, EPS continue solid improvement deliver On remainder organic margin basis, operating positioned flow to performance

addition, Curtiss-Wright. our the its X take I In business. early commenced Sanmen initial In the loading to And has China acquisition nuclear APXXXX to in Dresser-Rand announced at news, the new on want employees Westinghouse recent welcome fuel Unit that closed to opportunity April, government in and we of reactor. this partners

few well safety months necessary regulatory world's a pace plant. reactor all on This technical, power to to on connect Sanmen up is project tremendous has of reviews. X tests as past the the first the successfully and slowly the Over as ramp electric which grid APXXXX functional begin completed milestone, and this to puts

NRC NRC only the the and plus design available. utilizing is technology reminder, generation by the a As X newest the APXXXX safest licensed

commercial APXXXX new that interest China reactors additional and Chinese APXXXX RCPs. open expect operation door successful for should to continue We plant the in of Curtiss-Wright the the

XXXX. quarter over like provide to thorough performance Glenn? turn first of I'd review more to our financial call and Now the Glenn to for a outlook

Glenn Tynan

markets, reflect for begin as aerospace the our to and notably actuation with while higher flat with defense, in experienced were well year-over-year. flight quarter the first markets of commercial data results everyone. systems, sales XX% benefited of demand we solid substantially defense most lower a systems markets, growth program. test radar with Thank across Overall, sales on ground our the finally, board. results in our the reflect Starting as sales equipment, F-XX of on organic strong defense, results from In submarine ground of gains end-market sales G/ATOR to our higher and primarily acquisition In our review this good aircraft we I we domestic defense carrier our F-XX you, program. partially as on XX% Columbia-class sales. program, defense, increase phase will Dave, a revenues, completed And our revenues program. development CVN-XX naval have reflect offset by increased the morning,

aerospace, sales higher by after on- nuclear was commercial primarily and driven off-highway revenues on systems by on APXXXX and reduced higher primarily Moving industrial of submarkets. sales will reflect actuation the APXXXX aftermarket. the products power was were domestic to on largely And directives. where program aircraft from FAA solid in generation, This we the offset the treatment X% results domestic direct growth revenues services, sensors, program our China In commercial market. begin I increased markets. international revenues the general offset and vehicle the narrowbody in surface finally partially for of experienced market, that lower industrial to nuclear demand XXXX the by and

sales services higher of across experienced in number surface we treatment addition, a In industrial applications.

basis as key improvement the initiatives. performance absorption from Starting favorable our savings on of growth of operating to our drivers quarter first with XXXX year the a solid XX% XX.X%. income operating Commercial/Industrial generated well This was as up operating healthy performance. margin sales discuss we'll and points prior increased reflects X% XXX segment, Next, margin

charges In up the was first in Defense of to addition, operating margin restructuring points segment, results million quarter. increased our income XXX the basis while In operating XX% $X taken include XX.X%.

This initiatives. related our increased income the revenues profitability decreased TTC which revenues Defense segment and revenues in to business nuclear APXXXX was year while the from to results. absorption prior primarily on domestic operating improvement improvement program, the partially impacted by APXXXX As offset transaction, margin basis operating Direct on aftermarket operating benefited our by performance expected, X% and also margin and In order. ongoing driven XX our XX.X%. on margin beyond under the dilution is accounting points moving Power segment, domestic to purchase margin lower lower the the China due decreased

XX%, income strong led basis Curtiss-Wright increased improvement So quarter XX.X%. in a XXX which summary, overall to points of operating to first margin

XXXX our in highlighted made Curtiss-Wright general an from sales guidance, well Dresser-Rand as in primarily million blue the where sales, increase a the in to naval mainly acquisition to additional several the $XX on to market. market million industrial increase end-market we These reflect an defense changes changes $XX in Next sales. slide total million sales as have $XX include the to

X%, result, to up our naval we a we to X%. XX% guidance X% This and starting As to expected in the and overall now an overall of prior defense up acquisition, And from grow markets, expect from between sales Curtiss-Wright to in sales due the of to to X% defense now is improvement defense prior to sales grow growth market X%. expect turn between Dresser-Rand X% XX% to our increase guidance of from drive our XX%, of prior an X%. flat X% guidance

demand the with sales are the X% X%, Moving guidance, increased vehicles. to projected the slide prior to sales shows new to an X% our primarily between grow General improvement Markets. and to now chart. X% end due industrial Commercial industrial market our sales Continuing for waterfall guidance XXXX next from of

new category. some to the vehicles a forward industrial industrial our industrial general chart discussing will to reclassification we view industrial to controls. way The be and sales going the Further, modified businesses. the also new category medical have market industrial of reflects we of mobility the category, industrial sensors order in from present controls shifted sales vehicles previously industrial controls automation We all which and in clearer a and includes industrial sensors a

a vehicles As is now charts on result, waterfall vehicles. and XXXX XXXX website. comprised of off-highway revised only and available our The be will industrial on

respectively. financial million on increases the outlook we sales, Commercial sales Based sales. starting by XXXX segment with $XX aforementioned Industrial in and and $XX our to end-market and Power raised million Moving

basis, Next margin regarding Curtiss-Wright an operating XXXX a basis XX.X%, on XXX profitability. our point XXXX. organic over XX.X% to remains XX Starting increase to guidance overall

remains Dresser-Rand, purchase outlook general acquisition. operating principally operating we our and higher increase Continuing with the Power sales full the segment's segment, XX.X% in our income on million cost to the to we this Industrial improvement basis X% associated the are from for segment, defense guidance an guidance sales, the reducing by guidance, Commercial However, with the margin XX%, with accounting year and starting segment Defense margin XX% and to operating due line market In be guidance including XX%. X% guidance, up the top our X% previous segment. Based to of to our up previous of increased to to now X%. based improvement income guidance the from industrial guidance also sales this expect unchanged. X%. to expect guidance segment's to our points reflect of the an increased We've naval this XX increase on X%, while operating the range segment, approximately be to by now $X a to bottom market new In to we

However, up expected to range XX.X%. segment decrease operating purchase new the X% costs to margin while associated expected down X% with is the to a first acquisition, due income Dresser-Rand accounting range to to year of from operating is now to XX.X%

expected forecasted based to on line taxes expected accordingly. is the total a due income new income to As is be $X now provision margin decline XX% operating decreased improve new a these which X% expected Curtiss-Wright to $X.XX guidance all all guidance lower essentially of operating to range over updates, growth million is of while flat now to changes, prior debt to in to X%, by at of aforementioned operating reduction to result the expected XXX XX% lower to a in for margin in million $X.XX expense And share of a XX.X%. to with a decrease the double-digit our with XXXX reflects operating operating point outlook. financial guidance. the Continuing XXXX and earnings with Interest is XX.X% represents diluted still of compared results. of This net $XX $X.XX, by we per income basis range have levels, and grow

be As year with one based EPS on our to business previously is we step-ups ownership. to the typically first in noted two quarters of Dresser-Rand and the to dilutive amortize expect acquisitions, as three that the in typical

these will we year as be XXXX, to move the and accretive greatest For third EPS be beyond quarters. expect purchase After second our impacts costs. fully accounting we the business the during to one,

XXXX quarter year to of full that first to strongest and anticipate the For we fourth quarter your historically. half sequentially the the EPS note modeling XX% as each second in done with please of half be the our XX% EPS in expect increase being still and our year purposes, we've

expected raising Next to expected the flow full is to contribution $XXX to XXXX a to $XX flow, where adjusted from cash the flow free with million, adjusted million we contribution $XXX new million flow XXX%. Dresser-Rand. $XXX guidance from million range made year of million earlier million free range due to to our year of cash an to are $XX which cash free conversion cash pension excludes free rate up voluntary XXX% XXXX this $XXX

to XXXX maintain very expect continued flow free We results management. focus similar capital on a strong to working our led by our solid level cash

increased we $XX and range In of depreciation to by Dresser-Rand related the have $XXX addition, million million a acquisition. to amortization $XXX to million new

paid some final on to wanted less we're XX for is the historically purchase how in demonstrate which a times reminder, million robust this closed XX at our the than $XXX provide we've typical that business which, to of as Starting we margin. of paid segment million shareholders. a we to Next, to highest to The the operating $XX creating months TTC the operating acquisitions. is the EBITDA XXXX. XX early our as reminder, a range acquisitions within accretive is in next sales for that expected information With year with TTC value acquisition, with segment, price and a Dresser-Rand margin X generate Defense times

contribute amortization Excluding per our at this we that of to $X.XX intangibles, XXXX share. expect earnings will business the least

that a acquisition capital Additionally, long-term we overall criteria. to TTC flow, And above we invested our be XXX%. to expect conversion TTC's free return meet finally, on generating rate will accretive cash expect

paid million, April we initial which Dresser-Rand, $XXX.X EBITDA. to to price have an we XX less acquired next expect months than At purchase XX times on Next X. of

purchase Dresser-Rand We through acquisition expect excluding $XX XXXX proven Curtiss-Wright, our integration accounting. expect margin million is we execution. produce price to expansion an Further, generate operating margin to future this revenues our to contribute opportunities to that and accretive overall

growth, organic support generation. we and expect to We excluding objectives to a typical greatly acquisition purchase rate cost. our criteria will our conversion generating accretive $X.XX the overall be expansion we free first also of our these be acquisitions to accounting In XXXX cash expect expect XXX% finally, Dresser-Rand flow, approximately above our to cash year for meet flow margin EPS, And it long-term financial that long-term free ROIC. summary, and accretive

call would back Now turn the our to Dave remarks. like to to prepared I over Dave? conclude

Dave Adams

Thanks, Glenn.

the for some analysis, those acquisitions and the strategic Dresser-Rand what in Based transactions. to understand pleased previous I'll a solid provide compared that visibility important believe I that to Before the our comments able provide businesses to of it's our the on points returns on reiterate to the we focus acquisition, we're that communicated on past. additional presented types as We as deeper we're of on Glenn well acquire generating to slide. recent the that on on transparency the be investors we're looking level of

or increase existing is expansion acquisitions and Dresser-Rand similar advantages programs customer content focused long-term markets to maintain our bases Our look performance. high-growth enjoy and TTC existing in on solid within their Both markets. portfolio, approach our technologies strategic Operationally, Curtiss-Wright provide on we for existing businesses. complement to our competitive to

As that will strategic have Curtiss-Wright's success. contribute a achieved result, to our acquisitions long-term with seek these we're Financially, each criteria that we we acquisitions. confident of

have based our years and on group. few We performance within over our top our four the type peer expansion of past margin achievement bar the raised strong

achieve. extremely and surprise So the what focus with they financial accretive it highlighted to that buying strategic can shy that more is not away focused examples paying as to companies. no our slide solid We'll Key current meet should that of come requirements. for very rates high-quality long-term line that market from story, in we two businesses our and previous are on we're

to have experience to acquisitions expect contributors we integrating improving come. profitability. We And extensive and years be to performance acquisitions their strong these for Curtiss-Wright's

with this happy total shipset make some first few I'd naval strong on When platforms. acquired points on how existing this a new details a be strategic we business our we recently explained naval content. transaction, our share announced would on, largest it I'm to business, our fit Moving Dresser-Rand would additional like the and X business. expand to

the On the of Ford-Class $XXX program total million. addition with Curtiss-Wright Carrier Aircraft Dresser-Rand, now is content

we a the revenues five few over a curve revenues in we're growth on year reminder, carrier aircraft the aircraft XXXX, period. program typically the As like and on a In bell recognize years. carrier over beginning expect our continued CVN-XX next ramp-up the

advanced shipset $XX contributor following Columbia is platform, be expected via a provide recent press increased million most technologies. announced Similarly the a to submarines, to and release, contract million $XXX have turbine respectively. we As Dresser-Rand this to and reliable solid on $XX a our we on content steam recent the and Virginia-class also million,

in growth. With for X% defense driving results 'XX and provide performing budget improvement shipbuilding XXX business expect expected Curtiss driven X% programs, look in future agreement up to sales substantial defense ongoing Wright expansion XXXX, our this deliver our contributing initiatives. we X% Dresser-Rand. forward including to in to FY and generating we XXXX, overall We're strong overall, 'XX FY And naval on organic summary, and funding continued market In the well. to to organic to to higher particularly We're XX margin markets organically, to X% deliver an basis growth points synchronized basis. positioned and by all margin growth is

solid deliver We continue and this on also growth up like executing today's strategy strong I'd our stockholders. call expect to questions. earnings year. time, for open long-term financial to in deliver We're this double-digit our conference At share expect for per to to results

Operator

And question Peter is from Instructions] [Operator from Arment first our Baird.

now is open. line Your

Peter Arment

us we organic year, X% very to organic of first growth second, a question started Defense XX% was quarter. that you for the think was kind an strong, the But closer guided number up to just when in in X%. wondered to regarding I I

off at is Is guidance look timing there cadence organic have I I -- conservatism? and the the if the pretty with quarter, So I just that a Is drop the considerably Or of in that? would balance something compare first year. am for revenue issue? means there missing this that to

Glenn Tynan

the issue for Yes. timing sticks a sure. of without as that would... little -- a now. out for as right probably can't going major what probably I detail, That's think conservatism, far It's I anything

Peter Arment

I And on then just Power. just ask quickly if could

Was of for quarter? there but aftermarket, grow in And bit a positive higher mentioned it was expect XXXX? nuclear market you softer the international. You still little overall aftermarket nuclear was to -- this domestic do end

Glenn Tynan

of down. International, international year. have to the they expect, we we were to The aftermarket The when the up those higher second the is year. -- international heavily big And weighted even domestic going was was the which is little year, domestic was positive for to, you flattish in two when half bit the -- -- higher going should quarter, say in though look be first quarter. together, expect and half. due was was the increase just sequentially this the as the expected. at second sequentially. definitely be outages a to the And the improve, a I we well, it's to But than up aftermarket, expect timing for put up It's the we to they the overall do year,

Peter Arment

And update potentially timing between numbers on call think, $XXX Any Glenn, the mentioned million. cash, I, that that any just there repatriation repatriation $XXX lastly, last million are on activity? somewhere on around, to for you the

Glenn Tynan

-- -- to area. our And those officially, on we in numbers make the weeks. we of decision topic a is Not have two estimates but meeting in know we repatriation. our have are actually best board discussion we that still the And that

on come to more So that.

Operator

from from Fargo. Wells Pearlstein is question Sam next Our

now is open. line Your

Sam Pearlstein

year just think And really how So size the what Dresser? we where terms TTC about little talk in like of you're as last saw and do Or to be should can much thinking further just I year are -- Dresser-Rand capacity guess, M&A if have a to is one this you just of think kind we you do after about if you every you acquisitions? about question I environment leverage. the of seeing.

Glenn Tynan

Well, we we outlook. partially paid first for I'll then the little leverage, well, in and Dresser-Rand, talk But let a partially our -- revolver. on cash we I'll take TTC to Dave paid in of all, -- cash. and did

by to pay quarter. that down expect We third the

the used a by going XX% year, cap, like be leverage had standpoint, we're -- year. of XX%. neutral which XX% debt to From where limit, it's to net guess, we debt the cap to end this net our to a So be is to debt going -- to maybe have I this

So a be we balance won't powder revolver, and of dry lot make And into we have have sheet. the to cash on acquisitions. we'll the

Dave Adams

last fewer I'll out love never between. and I now timing If of nice I so had And I opportunities we slide, spend we To they're for would my criteria of, on not have said of three a basically that, and acquisition of established in get that into -- as several in that's stakes was we've for get money. not for so hunt further that if the worked becoming in acquirers, Sam, of is our know. size to opportunity I margin to we getting us, this to up the that that $XXX there they that just and in a And the to as fulfill perfectly, it acquisitions. acquisitions, could flushed acquisitions, which table to to mean, outlook, put months. years, of top quartile, are we'd ones plenty superior one remain pause meet first first type you year I both other there of XX didn't quarter say was in year, opportunities on serial that money question. we revenue steadfast we around on one, long-term to are the back It this outlook TTC, spending expectations to and And to with and When for. great acquisitions as terms would it the more Dresser-Rand happened every that numbers regard. XX so we And acquisitions, high-value but million quarter quite never have said many had terms approach in that watermark

And I expected continue. that so will

of it's things timing Now when about up. these all crop

plenty less proven by it the As any and powder, Glenn type have frivolously we're last, we've go anxious we're we to indicated, out basically, on over ourselves not than -- dry that spend acquire. that XX of but the of to companies months means

to very is strategy So us. important

have and XX But every in You it sound other Like talked saw look Looks we're a X make that that interesting. I to the at of pretty currently where that great. probably it's lot slide, I timing is opportunities. at. it's about the mean, we said, cut. continuing out companies outlook. And

Samuel Pearlstein

then roughly that Okay we dilution purchase lastly and XXXX have on year, will eight just Since this at you'll done an the year dilution for with accretive this it start issues. the and level? months so you accounting be that

Glenn Tynan

step-ups having just for out amortization. the to steady third down out quarters, Yes. The second roll us then in and wind and you're

So that'll be done this year.

Operator

Our Jones next Nathan from question from is Stifel.

Nathan Jones

the to Just accounting you what amortization level amortization there. on Dresser from is purchase continuing for the, is on me to business versus what up of break Could going be? that follow out step-up the

Dave Adams

normally don't We that of Nathan. detail, level provide

Glenn Tynan

an that To really to give don't kind without it -- to, detail. all of of of but our what level would practice we not that, provide be it's idea, you

Nathan Jones

does fairly -- legacy business early. products closely roughly I are would system's that same the would. bell timing I along from going the nuclear know Dresser, the thereafter. propulsion in pretty I in revenue to the it go follow does as On Dresser going the mean, of curve think

way think business? 'XX peak So in the same curve Dresser should before and it to does your legacy 'XX, ramping that we that, 'XX again, in for bell declining that getting about up for levels running

Glenn Tynan

yes, that existing curve. be to bell yes -- same -- very the business, that just No, you're would Navy talking our about cadence, we order similar CVN-XX the now

Nathan Jones

from et where R&D Can to cetera. this increased you I level spending product revenue new products are development that year the develop in also looking way. that know to you guys initiative, of update give an on traction drive you have us

Glenn Tynan

there do. a we increase across I in a our customers which looking overall segment, our -- we're Commercial/Industrial, in mean, Defense technologies on provide $XX is, with technology the APXXXX million cybersecurity technologies million that we're instance, the world looking XX what X looking and looking increase product, generation, Power last R&, big big antitamper of some our We've at at electronics both In we initiatives. next they're at hertz major is the segment, Curtiss-Wright, all many they're a them. to going of several is said and which were be Defense product D infusions there's inverter. $XX projects two it's of traction and to of the in encryption, looking will for is and where guess, at this the year, signed they're APXXXX. LTAs that the product going that, to I Well,

those will ongoing year. throughout the big there, So be products are the

Nathan Jones

there generate not the and the So of you any to getting do of the products revenue? yet. I'd to APXXXX hit But that kind market these market them assume are actually hertz XX increased expect When market? things other

Glenn Tynan

exact I'm not exactly sure -- the those of dates dates.

Dave Adams

basically, on only a -- a ones Glenn those that products, not on continual mentioned. It's Nathan, large release of

pump the in a that. and we of with the example, lot XX users talking the are reactor coolant APXXXX, XX-hertz hertz and For several potential for interest users on

and XX the Now is there that that with and pretty coolant particular new then that others increase the with with the reactor and the that we've to now, want powering pump with any the that's to-date for gestation demand for the period that will like out type success there, XX hertz but countries now had technology. of what's and up, interest hertz, India then going further long,

and and on-road, quickly, the on-highway that the kind little that you and/or bit weeks, eight within like the can get into of but commercial of then some longer, off-the-shelf pretty you can couple churn electronic, So stuff a COTS, medical several be And was off-highway, months-or-so. then get months, to product, joysticks of six to mobility months. like six those

they're headline the of it's the the kind the that the larger the lot a of what spread to some ones a grabbers, and way and you make but butter So there grabbers up -- company. Glenn of described were across of nonheadline board, all that bread are

Operator

from SunTrust. question is next Our Ciarmoli from Michael

now line is Your open.

Michael Ciarmoli

conservatism, initial Peter's to you defense. back guess, it's defense revenues, I kept Glenn, in to sure that of Maybe, I'm but X%. question the sort And ground flat on

quarter. a be I the those pulled ground You quarters. to I revenue segment? I there should, strong anything had but remaining really the out down forward, called was just for mean, it specifically, G/ATOR, would mean, guess have revenues conservatism again, there? the in X Or almost you is

Glenn Tynan

can't pulled forward. but That's a anything don't think there. I on nothing so there's going stuff lot we small, that have of why

to -- don't have So, no, nothing I comes really mind...

Michael Ciarmoli

Okay.

XX%. then the up The on almost Okay the and were there, the in margins very segment, points. guess, I commercial XXX incremental guess, basis margins were nicely, quarter I strong

And I you surface did leverage we You the there. segment. some to the those think flowing through facilities. even margin some of you're you called out recall were be a business, always getting very in mention had in restructuring commercial volumes that treatment. incremental But used how should I be thinking high about

forward. strength about getting there, just be and some maybe the margin So color on going that how thinking we should leverage the you're

Glenn Tynan

when we some large But through the stuff is flow mean, about had I things think about in first our you in this talk Yes. relative -- guidance. quarter.

chain of initiatives, took. on benefit improvement our supply as restructuring to benefits. so couple in quarter. did from margin year bucks, besides first So that the our they their gonna It's prior I It's overall favorable would of particular, their we of look to how management absorption the million But actions think have in do. much pretty restructuring some from a benefits $X million guidance most an -- they're ongoing had also They sales. we higher

going big not benefits going of that big on. rest a a to is -- not to more, of but year. the and going little quarter. couple there restructuring isn't This have got you've less of quarter So the for That's it's this the a $X million them. be bit I'm And every obviously quarter, is than

Michael Ciarmoli

potential just, whether you of of And or stand kind orders, APXXXX maybe, of, give about with on market evolves we you the as kind Westinghouse it kind state union can here us sort just thinking and expectations. India are guys the then the or UK how Dave, and where the of of maybe it's

Dave Adams

Yes.

a to narrative, I over excited come went a there a kind of silent when loading it for I print that's would months we're I'm It's of time. the and hypothetical, but And way doing the is was up on consider with to guessing guessing up produce level as it loaded. so would because no I full. fuel at And Westinghouse with them in my going As be before full far. some going release said say to in commencing. and really that, was let's press fact long finally that for And with are to to the stopped it while it's that's they now process And again, take well this get But take things energy six hypothetical. they're fantastic. might the loading speed -- actually -- going able I

I a So, able we're up as going humming then some certainly start resurgence been to that go questions, China asking digging until up and they plant. as now new to nicely the that a light they're and from along in for electricity, interest once new ahead think the energy we've said the holes in I gets have to see and providers in past, know

ago like would what resurgence not weeks-or-so in I've years, shape it's And somewhere when a good orders we're we saying a from our be couple is a experience. new still or still years So and that interest know that bathtub timing might we XX for hope a ways a placed. little said we might been from It's timing of see couple still also in we in imminent well in now. out of the last the time frame, days think. is, But that as of I within months-or-so, few to

both from and going good. given wave doing direct we're stuff so on second And our job, Navy pickup the we that well order as China, big as the the there pretty that's got

on India their as requirements have next a and out. in they little think -- both are ways as asked. as indemnification pricing one and in current liability that's So I Westinghouse we with discussions actively well pricing is line, on indemnification -- the India

just -- recently. a from and And they've so that there -- great and is new for the fantastic it is of reactor at news we're that's what a new to And perspective XX-hertz us, then pumps I that affords it's sort had this little that request a interest indicated, bit XX a opportunity the systems. version, as And and paid they're is in them than buy amount amount hearing significant coolant because they gives price if that what saves of have It from don't, XX those a do all down other to money XX. well footprint for hertz. a them to what some components a step to have smaller into XX associated would don't is it have as they and more considerable and put of to running the augment much their back Asia, because they in they as XX benefits better

of reliability need systems. equipment, and that that's eats that failures and they time on kind wouldn't the permitable, those mean So and step-down between also into

that's So us. exciting really for

fact caught they public decided route. -- to year selected was go selected they Mooreside due the another made think Now that's went the then since have but flatfooted to that, that the has decision a they're it all to since alternative was at And site, Westinghouse announced, ago, day day a what the they I had like a the and think bankrupt, largely unfortunately, about. facility go APXXXX, with And basically, and after was for sure at bankruptcy that they the I direction. made it in a another, it and them talking UK -- the another different least due time after I'm Mooreside -- then

be continue that is But druthers coolant -- generation next those over later to come reactor XX that, I pursue by need to the and plus X XX maybe years, are still biggies. around XX the changed eight India hasn't more pumps and in is with their floating APXXXX China sites XX mark. their that to would more locations. represented the of think terms client to

when started India through from that or an I what pricing that. So right but it's asking that it's interesting yet. questions. is, the your Not Westinghouse. go and either questions get anytime would That directly like you don't been order we near expect asked they're India, to And to hasn't concluded imminent. on term

Operator

from Kristine Bank Lynch. from Liwag question of next Merrill Our is America

now is line Your open.

Kristine Liwag

mostly business. or to Are How does these Navy Navy your Dresser-Rand's the contract existing price structure plus? fixed for cost compare

Glenn Tynan

fixed existing it's It's fixed usually price, it's and to plus, if development Usually, but contracts. similar very contract, price, cost similar very to our production a are more contracts contacts their ours. are

Kristine Liwag

this and of These production. you through? they're a three Virginia also point, multiyear leverage doing if if discuss think time, mature discussion and And to going your the programs two buy of two your discussion there's does in right per there's then the a we at year. Can operating carriers margins are of aircraft should materializes? How this at this volume of come

Glenn Tynan

are margins our is are accordance again, U.S. which on those with customer, right, -- our Navy. contracts in Well, the

-- margins, we operating this and very those great So, They're tremendous contracts. leverage is they're a cash. I have healthy on don't think

But good we haven't haven't we you about about we cash it, know, but really Yes, seen talk a we about As that. They're it providers. anything it. lot. anything hear about seen

it So we happens. hope

Dave Adams

is There that's And class. where there. X of buzz partially because go, then -- transparency you're math. acquisitions with just value, can of -- the some new a at the to to you going And these we shipset more doing the lot provide on Virginia little these, and wanted with these with they're out do you we're all particularly why if a

one or model so one a got it, side. of to the it. you conservative down on We you and to five forecast north in little every or carrier and four the that on the numbers the if numbers earlier, the you've do that. the with two are stance But year a just And the bring of just another that's there. interesting, bump popped double revenue If years the the carrier, it five, on our got a break then Virginias certainly, pretty you Columbia bit instead in you

Kristine Liwag

to thinking you how then preparation are -- to Dresser-Rand's think about should you meet higher how your preparation already? volume, And similar this is about your And CapEx?

Glenn Tynan

we we in test $X $XX took and put been a And I because -- new might Yes, think I have a customer. we've about million, that that's thing to loop, our by a is biggest asked I don't at million mean, the -- maybe. capacity look

brick mortar. the and So we have

of We test similar they little going to that exactly And for They're I needs. another again, footprint. think But to don't I in now. would is Dresser-Rand have us be loop. us a in tuned We would similar the for right may be would need imagine, to I their terms know them. us.

Kristine Liwag

That's their great, looking then exposure. just and at

for that So U.S. it's there carrier? aircraft industrial turbine markets steam acquired? for all all you a business. are the this any the Is end at the business Navy exposures Or to

Dave Adams

little exposure. industrial Very

Glenn Tynan

little, Very Navy. predominately

Kristine Liwag

and with provide And China expecting is APXXXX APXXXX, that lastly you you the fuel this color is any year? realistic? realistically loading my the I to lot know that are all India me. could the Is of a year? from I that's this of question orders Or next then materialize something at occur guess, something

Dave Adams

on really we fueling, electricity last pretty allows mean, go it. government quickly. from chickens are We're Kristine. little getting know. I time a we're that's forward. going on going to believe be look And one, do along I a them A know where behind in eggs of maybe pretty It's like this August, we're me, to in counting China, Chinese to they're I at. To prove-out locally have can't -- but much they'd things good a those that I question. before there the the, million of little you is hatch. XX,XXX a Depending from And I moving question. lot providers not were say. the line, million do certainly, the energy said, that weekly updates but certainly nicely. And hoping -- I production don't $XX of -- before interest, $XXX the on

-- So China been about at terribly humming of about still with really big who right now direct Energy happen Rick good us. way could order could traction it. it, talking Secretary year. Secretary this year, either out some It's a given knows. And It and now. of guess happen it's positive We're end opportunity. looks for It right Perry. results the getting next along the He's excited on our just

So very seems all news positive. kinds that out of there

Kristine Liwag

does you can what's again building, what's a RCP an capacity your of And your today remind with come order if plant. that us order utilization And through? the total China then you're

Dave Adams

now, And We -- we're can a building handle four-year XX right we're over, pumps a period we're year. what, delivering...

Kristine Liwag

XX.

Dave Adams

XX pumps.

capacity. of we've So plenty got

Operator

from next is And George from King. Godfrey Instructions] our CL question [Operator

Your line is open. now

George Godfrey

your one about they you how and the acquisition and ask TTC picked of about acquisition in Dresser-Rand. wanted favorable lot that and your of Dave, the And want you fall and a listening I to terms. to was targets comments you get there's on funnel, I it out

bidding So would finally when attracted target identify somebody is my presumably, question it's be think is competitive how the a to it else. I to you you, if because, attractive

So seem getting terms very favorable would on counterintuitive. therefore, it

the just bidder? third that -- and could how process bring negotiation target there goes a And through the you back a third and maybe how if in does So much is forth? company highlight try to

Dave Adams

deals, time play an worked with of one to believe to. at them. them. all to contact interesting close to we felt befriended didn't -- we're Dresser. I'll either the deal reason We entertained to that it decided the years Curtiss-Wright. that the were those all reasons long remain both with then in and making little And have We we on I We the companies folks great nuances of was then you wanted is an And these tell company so dynamic, sell and for And about ago. And proud really we strategic was acquisition, talking of it it's management George. company and TTC, met happen that certainly at Yes, And them to them. and TTC art about a we about ago. point, a that quickly their get continued them. -- follow all that ownership

of way about do board in them. just and of fact, felt their we As us, that a they that it's weeks, both did and about a And matter our hosting we're ways. meeting facility. company two well With kind fits us, so the at same

So out super. that worked

that cases? have their of like steam that bit into the plant. You if walked Dresser-Rand, and example, the different customer and is machinery are turbine like big the that might you somewhat makes couple at It type look much look you it's other they in your had in are the scenario people auction you The companies of -- take into very make, And the an a in there, domestic but we absolutely do product. defense Dresser-Rand steam little into get rotating for a the that a marketplace it there and turbines, to plant that is machinery, nameplates, same. squint think few Curtiss-Wright working others. and domestic and you Curtiss-Wright go do were market eyes Now not in

of So this so that has forth. that, I want from in and possession a it, and again, sellers, their to market something in in it it strategic that where think and wants grow lot -- a case, do of to go Siemens company to fit, once terms of they complement the to that's a going take advantage value with

tie-in them. fit So with that would we I United one have let's or and bet that say, the you that out States in two companies the maybe the, go other find

kind to really mean, else. all I spend a can the other of get was was and tossed into well, alluded they takes much, money on of out phone, to if I in we've too we it too proud maybe were that that you minute outrageous. everybody recent on just money these spoke one Now it's of potential things, several to one out going about for really reason now recently tell kind the about of reasons of some we're have past, that you out beat it then the and makes not business. of and tossed a prime the lot that the I we're one property the ones, not And XX ago, talking it through, I

going great have we're table point, be have to going it'll kind they're don't We a we, on here. now, than really these some appetite. going two. see have going to But at had not value. we're might more be, opportunities here to we're We don't the little bit that that not on of shareholder we And but deliver are to at it I that uncharted for reasons, And into territory XXx tops might trust some right some be, where spend and they me.

that think doing well, recent we're very two ones. And as so demonstrated most by we that especially, these

George Godfrey

one and And the for next million Orders call naval defense mean year-over-year, quarter, orders. out that question I XXX does be would basis you then could Glenn. on related quarter, timing, that this back timing order issue timing next to down would organic And it short-term X% if back? When be it just is you year or would it resume expect next a quarter? hear

Glenn Tynan

large Power pump The issue that QX order CVN-XX us million QX contained with multiyear segment. the $XX in a last orders for is contracts, order, was two year should One one the I say.

million for the in helicopter system The Italy $XX a other Defense segment. was landing

our orders two up take the X% you out, those first were If quarter.

So that's skewing Q-over-Q comparison. the what's year-over-year,

Operator

time, Thank and closing the turn like CEO, Adams, I remarks. showing to questions. I'm David you. to this back for Chairman call would no over further At

Dave Adams

Have forward great We us everybody, the again Gigi. call. Thanks, joining Appreciate Thank speaking a it. in second you, earnings today. XXXX quarter you for with day. look to

Glenn Tynan

Bye-bye.

Operator

gentlemen, program. your the This thank for participation and concludes conference. you Ladies today's

You may now disconnect.

Curtiss-Wright (CW) 4 May 182018 Q1 Earnings call transcript