Curtiss-Wright (CW) 4 Aug 192019 Q2 Earnings call transcript

Company Profile

Participants

Jim Ryan	IR
Dave Adams	Chairman and CEO
Glenn Tynan	VP and CFO
Peter Arment	Baird
Michael Ciarmoli	SunTrust
Matt Mooney	Stifel
George Godfrey	CL King
Myles Walton	UBS
Kristine Liwag	Bank of America
Peter Arment	Baird

Call transcript

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Operator

Good day, ladies and gentlemen, and welcome to the Curtiss-Wright Second Quarter 2019 Financial Results Conference Call. [Operator instructions] As a reminder, this conference is being recorded.

I would now like to introduce your host for today's call, Jim Ryan, Senior Director of Investor Relations.

You may begin.

Jim Ryan

Thank you, Joanna, and good morning, everyone. Quarter Conference Second Curtiss-Wright's to XXXX Call. Earnings Welcome

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

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

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

guidance, year the excludes and with reminder, prior results first Company's purchase a acquisitions accounting year that As adjusted associated period. costs and non-GAAP view current for including

In onetime transition in security of the IT addition, they with the business segment. Power the exclude costs relocation DRG associated and

prior current presentation website. year and our are the earnings available and release of at on for Reconciliations this in the end periods

references currency unless to exclude In addition, and of otherwise foreign growth any effects translation, noted. the organic divestitures acquisitions

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

Dave Adams

turn to our Thank along detailed you, I'll quarter Jim. to provide quarter year over our results second a of of full Good full guidance. begin and XXXX with review highlights I'll second a morning, Then it everyone. Glenn few our year outlook. updates with more to

we wrap remarks to prepared return before I'll move to Finally, our Q&A. up

earnings we profitability generated second in solid exceeded results share. Building on and our quarter delivered expectations momentum first and the quarter, for per the

platforms. XX% led was military we growth as presence by on organic defense Our growth fueled on double-digit Curtiss-Wright's our key strong by capitalize sales markets, in performance strong

of Power the as Adjusted driven in well the operating and performances benefits by our improvement initiatives. XX.X% operational ongoing Commercial/Industrial segments margin was margin as solid

In organic in a results second in that significant support to future and addition, growth onetime quarter. expected quarter gain ramp-up our third originally included the the R&D investments was

X% Adjusted prior ongoing activity. and compared with diluted our reflects $X.XX share of benefits the results repurchase of EPS year increased the

XXXX including year all operating margin, our diluted income, full maintaining and outlook flow. our for guidance, key adjusted we're sales, Regarding EPS free cash metrics, operating

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

Glenn Tynan

increase Overall, everyone. our will Thank an experienced you, XX% to review to X% down Dave, our our defense while a markets we good with and in begin end-market quarter I markets morning, year-over-year. sales sales. of second were commercial sales

would items the There are slide. like few a highlight I on to

reflects First spares defense, XX% in Virginia-class center submarine the of naval increased service revenues. carrier, and solid aircraft CVN-XX growth

growth industrial over performance down general controls first autonomous primarily year aftermarket XX%, performance reduced completed timing last a did due which as revenues. of in for industrial of a CAPXXXX market, half finally, to XX% in domestic resulted the recur. contract surface result defense lower year sales on with that were And generation, strong our organic. automotive not mainly an sales vehicles year was of This program, of reflects year-to-year well treatment naval as as In and the power for

our onetime a million results. and part R&D. increase a improvement which basis. originally million industrial our initiatives. Next, as building improvement In for $X in was Mainly that benefit the The results on reminder, from segment, in benefited gain the is sale tariffs on million expected a the to building, a sale, margin $X our we third quarter, ongoing current-quarter the the close had commercial operating provided which, adjusted to offsetting $X of I'll discuss drivers of which key presented performance, of second-quarter was an

comp In adjustment in and defense segment, grew favorable both segment investments contract XXXX, adjusted strong and prior defense due our million margins year fairly segment, income adjustment a absorption the electronics over not recur, in higher results the favorable principally difficult defense for And that been R&D the the year did products, excluding and million year. sales, R&D in would year. investment by $X a were reflects defense contract $X mix in driven unfavorable power XXXX similar have to naval margin over which our on operating year to XX%

on XXXX to highlighted reallocate previously We've the we the a expect changes end-market ground defense markets. program of aerospace in to defense sales market market end based in few blue where on visibility. revenues on our to the continue sales made slide to our improved in Moving growth guidance all some

As In chart. end-market X%. sales a to X% to expect of between of now waterfall our the aerospace result, defense Curtiss-Wright grow defense unchanged, expect sales you X% presentation, The X% rates of to and our growth growth the and ground of remainder to end-market sales and will we XX% we continue overall sales appendix find X%. growth XXXX are

XXXX and we reaffirming EPS income, our diluted financial are operating outlook guidance. Continuing with our sales, where operating margin

of operating of X% to to XX.X to income growth X% XX of adjusted and basis to XX margin points growth expect XX.X%. a adjusted We operating range

specific $X share R&D. net $X industrial million a a $X from about increase In R&D. segment a includes segment increase addition, segment to impact million Commercial Defense million reminders and year-over-year our tariffs I in guidance a guidance would year-over-year includes like guidance. few in

guidance this XX margin Excluding would segment adjusted compared a operating point investment, have reflected basis increase R&D XXXX with defense results.

R&D. at diluted range up the EPS quarter. XX third quarter million by quarter to In adjusted the $X.XX, a $X year-over-year adjusted of share building we strong a second to aforementioned to sale XXXX in power over XX% And results. XXXX anticipate Full-year due remains for the includes fourth guidance earnings per $X segment, modeling lower the of your a timing be than purposes, to mostly followed increase

free free expected XXX%. is from guidance adjusted an to conversion flow cash with flow performance another XXXX and full-year cash remain where flow for our range $XXX track maintaining million XXX rate also approximately are cash of on We adjusted free to strong

over to like to the back with remarks. continue our prepared call I'd to turn Now Dave? Dave

Dave Adams

Thank beginning to our of At you, for address minutes announce to agreement that to our recently the extension factors mind with with investors, equipment. to We're recently have take our like some external we I'd point, a commercial this on signed Glenn. pleased an our actuation long-term been that business. Boeing few aerospace

receive quarter. in to As for a this expect result, the we business orders beginning third

tariffs. Next turning to

the reactor Just to about APXXXX perceived provide impact pumps. some tariffs coolant our China clarification on of

and effect on this received cost to not supply More will with any to as tariffs, We licenses our necessary businesses broadly issue ship address increases continue have council. tariffs chain export the to have across such, and on order. monitor our our China all speaking RCPs China, we

As through noted tariff conference price expected increases. the impact we February on were our to call, primarily of XX% able approximately mitigate

full-year guidance $X result, tariffs in our the a segment. As includes in commercial industrial million

in regarding Finally, two cause making reactor press the shutdown of good year, our with issued analysis of China. Sanmen progress this Consistent earlier coolant we're plant the release on pump. APXXXX our the root

and our closely key to work Chinese. the Westinghouse very We've with customers, continued

any for multiyear a similar we As on sizable maintain products. these warranty do contracts, we and/or

color we replace our any analysis reviewed until with contract, or APXXXX the the on unable damaged previous to additional the repair components. have communications all cost On remain our our is under to liability results. direction parties the Consistent root provide the to matter customers, China and limited of cause

deliver half timing, results on and expect in to remain As year. second Curtiss-Wright we a is strong reach in well, conclusion to In track we to the of summary, XXXX. this performing

aerospace We naval expect basis grow year. end X% and achieve in markets, to defense, all increases is and generate to X% growth. growth margin overall expected by to points sales strong Operating to XX this across XX led

tariffs. sales to million despite driven We adjusted growth double-digit an rate cash higher strong by a margin $XX of and will EPS flow a free additional our XXX%. ongoing in impact initiatives and strategic remain be on track net with and adjusted in $X remains R&D approximately conversion our achieve diluted This million investments improvement from

directors' a new our have we recent addition, $XXX and exemplified by authorization. share a of million as approval sheet In balance repurchase board healthy of strong

expect financial another we be strong execution performance. and of to Lastly, solid XXXX year

value financial up long-term conference At to like open today's produce continue I'd strategy will stockholders. to driving this We questions. time, our for solid deliver and call on our for results,

Operator

Our Instructions] the from comes question first of [Operator line Baird. Peter with Arment

Your line open. is

Peter Arment

nice and quarter. good Glenn, Dave morning, Thanks,

maybe a first clarification. So

the Boeing how On describe can at long least you for? LTA, that goes

Glenn Tynan

of XXX Yes. extends transmissions The the of XXXX. for end agreement the production through us

mostly expect ramp in in QX. QX, revenues We up guidance. in is HX, And that our reflected begin to orders in to

Peter Arment

of this X%. And quarter, is growth for X% it's while defense, but you I only you're with nice X% now quarter just sales, Okay. X% helpful. this a That's to six know on of first the months ground for up that in terms of then had Abrams guidance year, only

So really changed here a of has negative think, in in second pretty, What terms you've ground got I defense? falloff half. the

Glenn Tynan

reclass Well, changed mentioned, really I on clarity But Nothing's some -- wasn't in And as I'm the that as we the that that million couple to or by probably way. Bradley, aerospace It's on think we aerospace maybe did programs but may changed clear. had we get we some we dollars defense. far a into get than with I only made it's other there change. again, stuff concerned program reclass, either -- change, really defense. visibility nothing's Abrams

Peter Arment

what -- maybe seeing any just on lastly, regarding you're spending DRG the just then and there profile. And the updates Okay. CapEx synergies on the

Glenn Tynan

I'll to the spent Well, the incremental million talk CapEx in on program. QX, we CapEx, $X so

half, about For it's the first $X million.

you talk a about... million each $X total for in and about QX million $X expect Do to $XX of want to of about We million. QX

Dave Adams

looking will going and the spend going, those We be fantastic integration surprises so a great. things could how building to The new build It's really products. is put equipment Peter, It's weekly no is place internal post fantastic. and well, in the is that employees to going expected, and there. going as on

think, everything is well. as going So our very I and expected from perspective,

Operator

question comes of line SunTrust. from with Michael next the Our Ciarmoli

Michael Ciarmoli

you've can held across the little Maybe and end-market you from give could backlog, was looks bit weaker. and And outlook bookings give General us you order Industrial. Glenn, visibility the obviously I bit a you're quarter. the sounds there. of confidence Nice seeing board good little know there? flow It your like a us like real-time changing you then some maybe pretty clarity got if the just there, what but patterns. order trends It customers even

Dave Adams

Yes.

Let to the orders, first. me talk

you year. when QX, overall was it's orders was The to over and time Power quarter. Defense XX%. that And look happen segment. comp mostly X.XX $XXX a to Defense, book-to-bill XXXX, will QX Curtiss-Wright We So from the in up but time. this orders in had difficult are the year-over-year, in X.XX. were obviously, down, million at orders the It's prior in

consistent is with you So year And -- are up up our QX, however, of backlog if at look year-to-date X.XX. our last end XXXX, the which our year-end. orders is book-to-bill of at from X%, as is XX% X.XX,

receive QX received, said book we QX, to up quarter the periodically that well similarly are and orders the in visibility In where bill high, XXXX, to large turning fills of our provides one. billings. orders orders north backlog multiyear prior As is orders and were to the shipments to we

That of order, was second last year one. ship subsequently year. the And quarter against and quarter the first the of we this and sometimes below as bill lower

important expect very thing the XXXX. Xx, similar year modestly is the So above end to we to

specifically for increase, guidance. to were half about The Now guidance. of general dollars and are terms specifically the the in their holding in our side. a the million hit asking we modest couple vehicles, vehicle industrial second the you Vehicles, of

a climb. it's big to not So mountain

confident and where that's to we're get holding our we're they're guidance. So there, going

Michael Ciarmoli

it. short-cycle customers. of you've lot your or a Is in treatment. in know changes close facilities the to seeing real other? one the business short-cycle I metal And you're seeing anything material any got Got that real proximity way

Dave Adams

bag. it's Well, a mixed

down So they this and the general for power little little to the both in commercial were aerospace. sales market aerospace bit turbines and were bit a industrial a down defense industrial were mostly quarter, up China, due in in generation they they but automotive in

a side market a like are eye we much keeping they pretty of are weather. balancing, least our bell at the general it's on because kind industrial So but

eye So to holding on just it see and year the keep goes. we're pretty our so far, well. up that But going they're where

Michael Ciarmoli

I'll jump the Got it. And way. and of then for last me, out one

sort business? going think and job You or done defense result as pretty of a some divesting sounds LX-Harris DRG guys the there that mean, incremental recently like they're have It with merger, a your assets. at might could with guys have good M&A I that some tuck nicely be of TCG. to looked in for opportunities be you to additions here portfolio

Dave Adams

in been touch Mike, Yes. at them definitely and thing with for We on that's of us. those, areas And look interest. we've several routine

for particular hope us. in, come out I might said, it that of like be We'd So interested something very we ones.

have generally and great right from opportunities. all looking just about really surprisingly think the funnel side, the targets our we I the and is that good M&A feel now

Now said that, these know during search it along strange really situations in culling you and the with some much that big start targeting, might and and book because nasty the the some just just you rate in order then and having you that pursuit out kind finding of inventory fallout them start of too things. process, companies, start

sub-XXX talking million. and wins flow. for looking that million. out are its now, XXX and us. some large, ebb And right So some that over large really But got will got good We've by there. the I'm peak in We've

we'll dirt and later. But hopefully process we find DRGs, recently, these they've of like luck, some for us. we our TCGs, to been trying hit, to hit continue So TTC be than with we'll are execute able pay doing well be in going them, have to TPCs very on and sooner any more of and

So think. outlook, yes, great I

Michael Ciarmoli

Got in queue. back the jump Good stuff, guys. I'll quarter. it. Got it. Nice

Dave Adams

Thanks, Mike.

Operator

Instructions]. [Operator

the question next Stifel. Nathan Our from with line of Jones comes

Matt Mooney

of morning, the X% segment a is organic in cadence of Nathan sort Mooney looks of It for X% this And guidance How target? the in on with Jones. during at the with the growth needs organic growth some confident you X% off Matt are what's see growth half. kind like the X% half? of was industrial growth this revenue guys segment, Good to first that second Starting range. the to reach to acceleration solid reaching commercial

Dave Adams

ramp and commercial actuation previously it's Boeing the that's mentioned have second the in But to up second to a particularly second that definitely the the we Yes. and and I'll half. talk for in the aerospace, the comes totally, the half. they quarter, And chunk of in biggest yes, half extension due ramps it fourth equipment.

naval one backlog. CVN-XX. in which Those is second are The of the balance next one. the biggest are defense, That's orders

confident. very So

good industrial, next are have vehicles fairly feel in gen, business, smaller In piece. power small, two that the do some but as we increased some expect valve to smallest pretty The about. getting were, increase go, they're those We we big it's small. the And sales general but it's ones. the have they happen in

sequence the but from That's on both bottom. It's off-highway, small. and it's fairly top to kind of the

Matt Mooney

peak power. Got XXXX? it. XXXX? build The as it to that Okay. then when CVN-XX area? does on that And progressing cycle Or And the jumping there? looking anticipated. in revenue start what's like Is to

Dave Adams

still peak for the in we us. think is I CVN-XX XXXX on think that the

Matt Mooney

Okay.

Dave Adams

Yes.

Matt Mooney

get back I'll you. Thank queue. in

Operator

with comes next line King. from CL of Our George Godfrey question the

line Your is open.

George Godfrey

and on Can you Good content XXX? the morning, Glenn, has Jim. remind what Dave me and Boeing the the Curtiss-Wright

Dave Adams

per XXX,XXX Approximately shipset.

George Godfrey

shipset? the had Per Are Boeing's planes, produced planes month. And now XX right at per still shipset, XX your content? shipping for you

Dave Adams

We are.

fuzzy. we little makes from We directly at a month a it to unless XX going know hear comments some Boeing. I otherwise the of are. We're continue recently produce made And to

George Godfrey

very you, in intuitive. on communication you how mid-manager is your to How on work? How up that between Boeing the communication the produce? that or do at production where changes going come what level decision down? yourselves does Well, level? those does does level, in you're executive work Glenn, Can And go that and

Dave Adams

much utilize, through pretty list, all, the these. a all through, need It's they'll and it's I'll into delivery that. portal use Boeing's we talk tell portal that a OK, required we to us, of and vendors first the

maybe out days. to I think it extends XX XXX

us gives visibility some of that so And expected. what's

any level would them. and people, advise our component directly of started could I through us. each we it's from they to supply the for of and produce with ramping out sensor products deal their actuator, would that. a divisions like then say, the process they with that chain And be It type an

have each the so divisions our And to of access portals.

lot we have certainly phone way And weekly a the a And than of marching orders. them, basis then forth. more with so we sometimes, let's and dialogue say, a by that's receive on our

their just have back So forth communications and all a of with supplies. they as lot

Operator

with follow-up a question from Michael have We Ciarmoli SunTrust.

Michael Ciarmoli

Just wanted on that actually to to I XXX topic. follow

sounds you're going rate. there's that put into that on contract to to with just guess I mean kind help put that frame probabilities hold probabilities guys does said what here, that's that that, confidence you that if of And your guidance? maybe to a slippage, any trying that going scenario. it -- XX I But level your decline trying a Boeing the around So like I we have if to figure you'd month. ramp. just see ability of hit know just you to stress the sustaining kind --

Dave Adams

I'll -- It and more and depends. Glenn then speak narrowly. to the probably talk overall can

XXX,XXX And on airplanes, -- down planning -- have XX, then it or with what's other. depends they would and number magical of We say, or producing. is is it substantial You shipped, that in this many they of terms sessions have about they all have how session think I happens running at. us we're queue the know. just if they XX, drop. that the And a other anything on then if. go which XX% really do and look many there they've are to that, is kind to suppliers. planning yes, probability, into I what okay, wand I that's don't any But don't how -- strategy And -- XX what a the dropped and the in

very and over watch say. you the all enterprise, have do Glenn, that anything but to the with we're so we hard And those else? entire map carefully, on

Glenn Tynan

I so it's the hard what's speculate. either, of they put don't the tell commentary, wouldn't to -- to have narrative variety there, wand going happen. wouldn't I I out on a Based

their wait to wouldn't going speculate. I to just up mind. until make we're they have So

Dave Adams

they I'll Boeing. as we this to to get that say thing time. I one fixed. And you saying, and do keep thing thing that's -- are is they'll feel things see The platform from fantastic. do we well. there. they'll that unfortunately, Backlog are that, And obviously desire and time their And is do for strongly it that these happen operational

So do. and platform to time be there a they we a long very to look as that for think on, it's I be wonderful

know So We outlook certainly Yes, probably, How is big a yet. Is speed a lot don't of bump? great. suppliers. there for one?

Michael Ciarmoli

they cut, XX cut it it. if I wiggle and impact, in would fourth it it's got But it's Got even If you that end? it like -- $X nothing seems month like room quarter, a catastrophic guess, on mean Yes. a cut guys I $XX down another only million manageable range. million to if be your your sounds guidance you've

Dave Adams

Agreed.

Michael Ciarmoli

Okay. had. Last question I

industry. you've trend about R&D think $X should the You next-gen seeing I that be the happening -- programs? think, that the modernization to more mean participate these new a expectations modernization do be I the there's stepping to of you're might R&D mean in kind talked start the got million year, mean we I R&D defense defense sector? Anything I across newer, calibrate our Defense. a in of spending to up some certainly lot for just your of norm in it's going you

Glenn Tynan

whatnot. cyber were an security it and doing And the million talk of the it's they're said $X It's we segment, Well, big the latest where on. we increase big But highest have. especially was That's where in for we the for like our $XX segment high. year, R&D -- business and pretty I'll anti-tamper, is this part. technologies that to increase encryption, million Defense that's just

be to R&D. R&D level incremental pretty begin if think believe this afraid to high continue warrant, circumstances with. the their to don't I increase was So what And is we'd I of to

Dave Adams

a little add I'll bit.

that. look that there at cybersecurity, the others ones that looking and think at million, necessarily it that right anti-tamper X buying big now, when not to are Glenn of addition I contracts. you particularly out mentioned encryption, are in And

working and in spend, you not with buy we're much looking at You customers, with R&D doing. get some at which as looking opportunity that an the as

put on million with are those into particular like, others And they what how of that three working that's X along is to customers others. There ascertain with interest by level areas what we go three. do the those platform to is, that bid service then which in with their got the on win. then the user our and to and architecture they end But their them it it addressing need and product that, and base, when that whatever into entices that platform we or of they their iterations benefit bid

we run units our of strong industrial way the measure certainly And same but folks the that ROI, across side, this lower, in very that's what we've So along business And this of power lines. stuff. take gaining the be what's commercial we the internally terms got it each with R&D. the the from board, are

payback. report We'll we even in specifically November So talk what meeting. we what's the about meeting what's board go in rate have look at and do and we big And through that this payback the where hit board target a November's our on and it. we

said, a eyes like And of So a in. Glenn focus. on lot it, put lot we'll then pays off more, more it if of

Michael Ciarmoli

it. housekeeping. don't if have you just this handy, then Got And encryption anti-tampering. but know mentioned you I

embedded at You've there your peers got some trade the computing high a very world that in of multiple. out

defense end-market annual computing exposure? right categories. us But rate revenues out I what's total give of know on market the you you break an sort run Can total now? by embedded basis your revenue your

Dave Adams

I don't that sorry. Mike, fingertips, have my at

Michael Ciarmoli

Okay.

maybe. Follow right. guys. it Okay. with up Thanks, All

Dave Adams

Thanks, Mike.

Glenn Tynan

Thanks.

Operator

Our next UBS. question comes from with Walton of the Myles line

line is open. Your

Myles Walton

follow there question to embedded Mike's on up I going was computers the actually on market. right

area? million. around red it hundred think that the that in have that in right you box-wise I size was the about Is past a few

Dave Adams

guess. my... would would north It's more XXX million, that. That's I a it's than hundred couple million, know of I guess I

Glenn Tynan

the out there... We're one biggest

Dave Adams

the one my that have a don't fingertips. I'm are because out speculating I I don't bit little just there. in biggest have, just We

Myles Walton

that the this pieces much in the it And business? the quarter, seeing issue? of lower is that just higher-margin think trend? then also, fair that is to is Or relates in is of how volumes And to a your you're one as it that of a comps

Glenn Tynan

dollars. mean added the It second half of sales the down part is. They million couple a in . backlog. strong then have bit. off the in of sales it's second were and But And is. a It XX% it little But know a of got was I quarter. to flat only half embedded I it, their they very TCG

see and a it's around, change in you'd quite defense. mostly aerospace So

I'd So call a timing that blip.

Myles Walton

Loss the that there has it historically I loaded. bit guess mean I second was last in more business for a reason back-end quarter? seasonally more year, some flow was been little

Glenn Tynan

last instance, on just was as had a this didn't for adjustment year, Well, example, That another $X recur difficult comp. contract that contract OI. million. sales naval year, that $X They million a and

that made comp. So difficult alone was, it a

But would the a that. TCG didn't little right bit we state if up with now. anomaly I have can We have only been that's

Myles Walton

investigative talked you the Okay. full update factors of along what have on with conclusions the you Sanmen the like laid Dave, a level And X. you expect to Or know various presentation APXXXX kind next advice? about, then, over think I visibility is, and quarter? starts what's do there expect? in gain you them kind Do out report external of What you'll of you the the

Dave Adams

the We paper, if have very cause root cause analysis. you will, action, thoroughly will, corrective and on ourselves, and Chinese internally, and failure customer documented a we'll between Westinghouse,

that as so discussed, And and that we ongoing be of are speak. parts will

we remarks, prepared the in said I progress a of lot there. made As

And direction, which comfortable I far. think everybody a with so we're in headed is so

and Street And prepared what's will this we'll by the filled likely second be going half you all some that But year. paper until seen it's, done on it. the is tell and internal, that remarks like last have remains be come out. said, to out it then will I it of with be to will The And

pretty because, I sooner we're like terms doing there. well think in of later than I said, it's getting

And of put of but so customers. our lot agreed that, in our And have anything to clarity for within exposure, course, be haven't have external a to with together internal yet we'll ranks. own we

progressing. the different? that's way anything So, see I it Glenn,

Glenn Tynan

No. No.

Dave Adams

it it. attention, a like headed these garnered we this where lot said, I've as we're never good through obviously been level. this feel one of but like should. pretty That's And, of about on I at

Myles Walton

to operating there's change other just And design, their me, installs of to the similar no been remind procedures?

Dave Adams

built have let's No. we a goes, on I prototype that the, testing understand any don't the the APXXXX. far as as Chinese updates version of mean they've on And it. I the say,

I far hasn't as know, been it qualified. As

did they're that, we But running tests. too. And

So think, are And the because program, comfortable XXX,XXX I it viability that. and everybody hours design, to some gives operation. we that's for certainly on the we right I cumulative well, news about that have have, plants mean good in feels over the three now,

And super, plant one that feeling the And great well. all only as about down. so that's is

once a this that, country my side again, the great mind back in more externals as can so is to to think I to operational. a know get And be okay, in have product. interest these, out, supply everybody it's in anyway, more, national we China figured one then would we being get able give best Chinese direct But and interest that the because the of that a give this would to

anything, program stead. I like the a split If it didn't the this pretty is in is going. the future the do We'll feel speed slowed it there. Certainly, stuff. I think two good can the from moving we're mean We kind standpoint, little of with along And good still way about last us orders China they the help. of the orders we're And down did on production bit. us. still I bump But and between

Operator

of with comes line Liwag question of Bank Kristine from next the Our America.

Kristine Liwag

questions. computing area. like line excitement in a on it of seems I mean the embedded that of lot there's up following So

is and double-digit large You've got that the year. a -- company public with from player seeing organic defense who is through acceleration primes, seeing growth outsourcing

be understand to be, the would industry? is from wanted on as And I trend not, business And embedded your I what you follow-up So can benefiting a help the also are in same first that different? is, if trend then business? in how you other a should different how thought higher were be market? industry-wide, trend Because from would you understand players much the your in computing see me have would to growth if that that that

Dave Adams

Generally high side. -- I'll answer level a from

of different size out peers it's look of than You our there. scale business, of again, in are all. the scale, And that and our at and those other certainly growth growth first some

And some I play think in it. has that so

tremendous embedded CVN the are We into visibility see I seeing of the it benefit that that, the of on the businesses provides. of all with nuances from this up we now the cycle in in mean and but big Pittsburgh like naval amount only great a our we platform equipment. opportunities have even -- market in better with budgets going not computing, and

So that, I in overall, same playing of think the somewhat we're probably sandbox.

they little some -- let's integrated our of a say, and vertically Now approach, them. have more bit peers,

so at growth. seen And might and above might necessarily so have few some there. layers that we they a be maybe the component a we of And that [indiscernible] of not disparities might level participate some

that would of say designs. I design win-wise, say But reasonable to winning we're a lot

designs. are they're on still peers and -- the sandbox, same participating new as Our winning indicated,

is Our acquisition different. obviously slightly strategy

anything not Glenn, bump enough So far might separated where we we're vice some mean is it's are it's and to and versa. window see it's not there. if others opening think are would I And that don't focus than know up -- I different you others I have out but a not add. little fairly divergent. some doors close, that opportunities our of

Glenn Tynan

the for add, aerospace segment. our our and -- And other would participate is is the the guide in navy it XX%. to And computing, X% the in Defense piece it the next aerospace that they is there is probably I defense is major the and guidance is X% markets our embedded to -- XX%. defense, defense, of majority

my difference percentage. I our business biggest than what think -- we're percentage their viewpoint between to that to If a from is that you that So double-digit me. is difference big two in is range tell the EBIT the to is with with. higher were I begin That's EBITDA

Kristine Liwag

come That's next helpful. And the to your expect start what that can you China look new for some it see switching I for happens you timing discuss a the drop gears few When recognition do you when off, years. APXXXX. seeing revenue Can also to through? contract, that out offset you China of how playing year would of and revenue when you and order you is then to at a volume, think today

Dave Adams

did a right rejiggering for of revenue years. our those that in at over move costs make looked some recognition. number the to of that We've Yes. We by

So filled in from certainly that bathtub, quite the perspective and we view nicely. helped the the that of of

now got business. us. and CVNs helping that's Block all to And subs with that run the our buys, some in coming and for those we way we've the void then of stuff And the online, the that's fill

So orders said here. years, and said still get some I've years. next last we'd over few that we're I've And the over hoping two the

that in the we'll slowed down boat. certainly, probably the bit. Sanmen when still a And know So issue order. things get that Don't next we're little has perspective from

it the But forgotten. I I It's level not on interest It's still high indicated is discussion as so it's had a when. last coming gone of around. and was the matter there.And extremely on just

forth. within So and budgets I all of the that some work bathtub think you just time, with we defense looking the so And this fill have. that's better in

it. on take my that's So

Glenn Tynan

Yes.

last intended we in we think think we million back it gap when said graphs fill that I XXXX, with only and navy revised a to gave February And we it's in if our reiterate, work. I over guidance said $XX you million had to this orders in year. back, of orders second of $XXX over and first go quarter defense the million the we defense back in of quarter again, year $XXX

backlog. in works that so And

So we overcome gap. confident we're that can that pretty

Kristine Liwag

years? you talking ultimately, China's two can And order a then for of for multiyear already when and years, indeed say in you it's a run presumably, three another When naval a submarines slowdown for you terms volume, and outlook year, than what's an if higher there down Because, be give quantify maybe wouldn't that slow in business? be rate you'll a economy least that. or about APXXXX range, are does two, an in in for order at but the order, and you for get really another significantly don't volume

APXXXX So to years or order business you two get don't what something? an happens the next that if in

Dave Adams

what is when, the the question, Yes. really of of when. wish On definition of definition I knew I your part the first

when saying here coming. and kept know this that order So well at next talking And I when We I long the was ago came time I job, soon. mistake made the were after, a about you went. in how

years. be to out turned Soon several

also the that this order going they is order like see. that I really make next not very the to others at it from the some come, still looking So not we Indian Saudi out sure will. mistake that again. will anticipate have But I'm Arabia we anxiously then and there, Anxious I'm and well. when, of are as they what standpoint

very for looks that term. So longer positive us

an get a give deal. wish large. have it. longer it's of marketed Westinghouse, you somewhat, all being can't, narrowing in really term. I in the planning That's don't I to And program answer I business don't the it been kind little know just APXXXX effectively at of had look terms down different But many And bit to timing if we on what a India I mean it the then at here? you but anything happens I has by scenario ways. But

with I'll You say, fill other. Boeing bathtub I'm some we to fill of aerospace fill going industrial, at It If us kind looks with okay, commercial hurt that get work. helps some in that didn't work, it it general, good. extension, all. defense In

filling And at then and TTC maintain kind and the We little and cost, good acquisitions you that DRG reduction others, larger then bit doing. companies cost at of like to getting to and some TCG initiatives up extremely we've your you margins. then that, start look of add acquiring been

for when is of that and under a under got has way been that. while. insurmountable, you albeit that then something planning you what-if-scenario do way we've plan a all kind get for of at that so Because lot And concentration, not has

kind the have we the Pittsburgh have up pump, subsea going but they the do of with the that with some only work have the there. We've folks defense That got of in site business great. Not that they plan, offshoot is the pumping.

good We two have on customers online that.

a the couple work. of that with And in was ago. bathtub started of fill would a lot years That

small in. got start that things, filling reactor. that come modular lot things some there A up of You've other

great. to future whether we the looks think for Curtiss-Wright We're going go ride. but long too for like the is it's continue through, XX us. to And is APXXXX hopefully, And List thrive. going five feel years, fairly the do is to to along decent to I about what

then great. them, absent we're still If think going do I not, to

Glenn Tynan

targets do a not add APXXXX include would the as program. I just on orders that any reminder new new our three-year

Kristine Liwag

Thank the clarification. you for

Operator

question We line from Peter of the have a follow-up Arment with Baird.

Your line open. is

Peter Arment

I pursuing about Yes, that. about, year. guess I things about $XX when to date, lot in. you thanks Dave, bit to on, it's you little to buyback, below up your question thinking a following last M&A. pace you But was a kind of of But of just just a year are filling answered it going ask think the million

the But fourth a obviously, quite tactical very were year in bought you bit. last and back quarter,

on So buyback weighing you're opportunities are of the maybe just the thoughts that some M&A in of your update how versus front you?

Dave Adams

question to and been great and that otherwise. board a very with at because we've board in mind, about go we've it's timely length We talking we made or that about progress So, the our talk September our that. meeting with

we're discussion and targets but last and, like so super really want after. did we've And like said going that we before, some I we before make got year And year that more, the just will to discussion. have I

opportunity cadence, price, the rather do going we buy exactly there, think don't million what I to the five years repurchase. And diluted grow that XX the over year, year. doing at XX just big caveat we'll do dilution every were this right and at to to and would relative we share But still strategic repurchase. from the next the we're on I to for Company away cover said a least shy we do And share than rather to

that then, do achieve relook capital path allocation the our or then if strategy, repo. will purchase, we consider we don't not share have still approach we what then to is something formidable And a have we to a balanced

think good a hesitation good feel I without any it's And buy price about certainly then it. and we can still back

you gave that still $XXX us, and that. So the million we're heard sitting authorization about the Board on

I but to and think for timing have do opportunistically, question that. we chances great it, many So perfect

Operator

Adams, At will this showing Executive to for closing and the call questions. Chairman over Dave turn I time, to Chief now like further I'm back remarks. no Officer,

Dave Adams

with Thanks our Thanks, day. to very forward you look third us speaking much. We quarter Have during today. for a again great everybody, earnings XXXX joining call.

long. So

Operator

Ladies and today's that participating. concludes you Thank gentlemen, for call.

You may now have wonderful disconnect. Everyone, day. a

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