CW - Earnings call transcript Q3 2020 | Curtiss-Wright Corporation

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Operator

Ladies and gentlemen, thank you for standing-by. And welcome to the Curtiss-Wright Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now Mr. hand would to conference I speaker, your Instructions] like the to over [Operator Senior Investor Ryan, Jim Director, Relations. Please go ahead, sir.

Jim Ryan

Thank conference morning, quarter you, everyone. Welcome to good Sherrie, Curtiss-Wright’s XXXX call. earnings and third

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

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

earnings As in a greater to results reminder, Reconciliations performance. otherwise in excluding non-GAAP an and unless and year effects for transparency operating Curtiss-Wright financial divestitures, order the the of ongoing are of this provide currency the certain organic excludes current the growth, view acquisitions that adjusted prior company’s Any the at and available costs presentation include in website. periods end restructuring, release to and on references our noted. translation, foreign

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

Dave Adams

will of as full as third our I’ll highlights everyone. quarter financial more detailed to morning, review with Good our from Jim. a third updates guidance. Chris quarter results. provide today then year performance, well Thanks, begin

following gap CDC plans keenly decision to a proactively our I’ll to-date. expand footprint remaining well-positioned and more as in as period in why strategy, We’ve for aerospace to continue a safe to After reduce we prepared balanced aerospace, than The our within period address is acquisition keeping navigate the restructuring enable that profitable of including on up my employees we commercial move remain are operational remarks, executing to plans by our agility, in return confident with defense in budget filling sites September. upon team’s focus I demand in business, we that, on pleased sales growth. challenging and allocation and while guidelines our remain announced plans measures. remarks election acquisition this lastly, our commercial executing conditions all wrap will strategic discussion several we and steadfast of our and topics, team our our future our uncertainty. how of this with that on late Finally, capital implementing includes remain our we’ll the our benefits the future. by to and Paxar ensure is the commercial restructuring markets, This a Later maintained austerity Curtiss-Wright Q&A. manufacturing I through while focused enter

our to Turning prior the diluted compared operating but we results, XXXX expectations sequentially our EPS year, our where were the X% with Sales quarter adjusted higher exceeded third declined quarter quarter. margin for than results. and second

from was operating the X%, than commercial in to orders which steadily and income improved XX%. quoting the experience experience our XXXX. increased lowest second We quarter, provides reduced which as activity we in have Within commercial due defense strong to down the continue principally Adjusted our markets, look demand to our optimism growth markets. ahead markets

partially EPS as we restructuring the our restructuring containment benefits the the million our of in XX.X%, ongoing sales, timing despite our reflecting at Adjusted while savings defense also generated expectations, accelerated $XX actions. reduction diluted initiatives. sales, cost of flat was margin of to operating adjusted from due and $X.XX by benefited exceeded However, a

while free we challenging focus We adjusted in by for are a led cash quarter, working remain third our we on to XX% had on Turning strong quarter following a track up finish year-to-date. flow, sales our XXXX our trial, intense capital. second

Now, like the Chris? to over outlook call to thorough more I’d Chris turn review and for third quarter XXXX. provide of our to a performance

Chris Farkas

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

due fighter Looking XX%, had strong deeper markets and we on to at program. the into our demand UAV within jet aerospace growth defense, increased of defense

submarine Next due we growth South naval we production, business, of the timing and the on defense, up we programs. Virginia benefited class Within in Columbia OEM DRG revenue as new increased to from Carolina experienced our ramped production our facility. both solid

production activity, in aerospace, continue commercial on due Turning domestic customer-driven markets, reduced as anticipated, all market, be maintenance delays. slowdowns. delays, while by commercial generation by power in finally to aftermarket project social lower have to international And sales driven platforms, leading the the been to we impacted major OEM sales reduced to experienced sales distancing-related largely

operating Commercial In the on by reduce XX% segment’s in income defense reflects growth XX sales. actions. in increased reduction system of maintained to a year-over-year solid XX.X% commercial and XX%. in lower to our and basis and segment, to sales. adjusted of strong principally benefits Next, in on the percentage I’ll In defense operating our cost the performance. adjusted drivers containment slight approximately the while key mix more sales, operating lower mix on points revenue. higher initiatives The higher increase due margin a of adjusted defense Curtiss-Wright from of operating significantly headwinds reflects a XXXX of revenues, third nuclear income XXXX operating unfavorable the lower is The XX% margin million segment, acquisition. discuss within actions unfavorable margin the XX XX% unfavorable the sales, $XX our These industrial decreased margin including restructuring to offset unfavorable the Markets lower points offset XXXD contribution power despite segment margin increased operating Overall, results restructuring absorption basis In flat decremental the revenues. our our of topline than benefits margin reflect absorption the quarter efforts partially aftermarket segment,

guidance on growth points XX% Moving nearly X%, markets, to to our to growth from and XXXX defense, actuation overall. CXISR increased to defense, expect our sales increase the narrowed a updated jets, basis million equipment aerospace In XXX continue prior embedded overall sales X% $XX with end-market our guidance our guidance. as fighter and increased range. end or we’ve reflects XX raising outlook, outlook This decline XX Naval decline. submarine our computing XX% sales strong to of to CVN our equipment by on In to our now program. guidance well of we expect revenue programs. revenues an higher on X% of due we’ve Class demand various expect X% bottom as carrier is the Virginia now prior for defense of compared We aircraft

be improvement accordingly. our although, commercial overall markets, a pace sales slower and commercial outlook will we than sequential our modest in expecting the reduced the quarter, expected we’ve in are aerospace, fourth to of Moving

generation, pandemic customer stretched related schedule. million out projecting CAPXXXX delays, a to power Next, the in due $XX of which program push principally is out we’re revenues,

XX% we As only overall which to essentially and of now Operating as is guidance to with quarter. contract, is positive similar we’re sales, on in our decline a our our points a But general previously income, guidance. a we decline the X%. continue industrial the XX for compared CAPXXXX expect for than more range sequential less XXXX XX of than will our operating bottom down will growth basis margin XXXX, now point to expected financial XX basis flat and increase prior next unchanged basis to X% to be be wind remains to end to Continuing points revenues reflects adjusted guidance XX.X% from with expected solid XXXX. result, the fourth XX.X% raising on down XXXX year’s our In be note, anticipated. to of

Although of reflects initiatives, guidance our XXXX. achieve remain in from savings to from annualized XXXX restructuring savings acceleration million updated now in track $X we $XX on approximately an million our

sales. of increase operating grow XX now impact to XX% guidance and from of with than operating an segment and continue from In the to guide expect year CAPXXXX mitigate XX-basis-point in XXXX remained to XX%. commercial as power naval basis XX.X% XX.X%, defense we to prior another now segment, commercial margin than and strong operating these an and we industrial increase with As our project year more push-out savings segment, of a million Defense savings segment XX.X% revenues. sales higher while is at year, income acceleration by to line aerospace sales to increase our compared and overall a the the increased in followed aerospace points demand restructuring commercial year. to and this segment, increased basis profitability XX more the $XX in also points next are million income which Continuing XXXX. the end XXXX, now nearly $XX expect guidance result, have our of we range In projected operating due represents to margins expectations defense Full we’ve continued margin offset margin reduced in outlook, offsets XX.X% performance. sales naval to of low reduced our growth XX% with strong Full XX%, to of reflecting the we increased the

and restructuring bottom $X.XX, project the end of EPS diluted $X.XX from guidance range full EPS to includes savings strong a which Next We our where year $X.XX. the the to of raised in diluted quarter. contribution fourth we’ve narrowed overall our outlook now by

Turning XXX%. very to to million we million with flow $XXX outlook, of free to our a cash strong flow conversion rate adjusted free continue level project an ranging cash $XXX approximately expected from full year

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

Dave Adams

Thanks structure portfolios discussed upon of our our to product Chris. initiatives we’ve of an Since pursuit drive quartile margin improvement. and continuous cost a focus We’ve of businesses, demonstrated intense support in rationalization performance. numerous top unit and relentless XXXX, our

to delayed proactive growth This facing needs. acceleration including program, in business aerospace the MAX impact recent within operating margin, actuation of To years. pandemic. a manufacturing have several our to operations and end the committed a Mexico. support XXXX. management in the this XXX recently, included the team the the decision build-to-print portion little restructuring achieving for light the with of nature expected balance commercial to We our press include Boeing has reduction in to in discussing profitable a between More over yesterday’s largely to Prior pursuits Boeing of margin customer current next our satisfying and the remain our most our sustaining seen had due volume highlighted slipped contracts the due This been put particularly In over the actions industry the color actuation these over of last by continued at discontinue position slightly of goal footprint of on commercial to round These we’ve Curtiss-Wright enterprise. negotiations subject, our been restructuring we dilutive albeit of aerospace, to the our the XX% that XXX release, the last contract, work. a overall erosion of actions was strategic margins the decade. declines

a we recall, signed we a to this the dialog, profit with on negotiations months in our higher experienced regard a contract. product After several as and at current you enter we some XXXX, line. contract future margin on contract expectations establish benchmark of delays substantially If

our build-to-print of have with strategy contract dilutive under business. when our aware, pricing absorption are aligns against and removal exit have with our production with a XX Curtiss-Wright’s During and to the profitability elected of per accumulating the next financial XX sets that they this to months ship resumes, at discussions in and production regard XX peer our time difficult we position months best-in-class continue helps for output as Boeing amongst based we portfolio and of strategic levels At future to except regard perform IP contract than on inventory strengthen ourselves significantly Further, to inventory to XXXX same and group. estimate the you Rather the to put this has between two month. years interests. been continued continued

our our restated will represent from sales and this XXXX diluted in this $XX business commercial segment financials We provide and XXXX, million guidance and product to For industrial adjust XXXX $X.XX EPS. February. remove results approximately in when to intend we line

acquisition. sales potential vocal defense via as pursuing very potentially cover Over been have continued our the the past plans in as to This has growth we growth gap. few driving about months, revenues, well included

our Our of tactical bases PacStar a PacStar In paid Network proprietary above in the of business. war and strategic approximately Management. times Battlefield XX communications but system what assured we management recently technologies. excited rugged leading of communication previous U.S. military the those to particularly solution fit modernization acquisitions, facilitates very opportunity PacStar data some. we PacStar We Their are theater. of is for announced IP as slightly about months million then efforts deployment covers rapid for historically it single-digit in both communications revenue similar secured is in to and communications acquisition supplier have in pace software next the expected This combination are pay to integration line slightly platform to EBITDA for and and is deliver or to Curtiss-Wright’s the best-in-class paid, supports this the unique data maintain secure link network $XXX fighting management businesses. Similar provides of timely XX XXXX, of processing, growth than tactical future. more the the software willingness network foreseeable stated its It warfighter. our more revenue high with generate battlefield. to high Cox-based

an be expansion growth free While fit, our supports we dilutive growth, operating within of criteria margin of this year ownership. business segment. topline overall profitable generation. objectives believe long-term deals the to exceptional our first providing expect and PacStar the is our margin flow topline and cash in financial strategic strong We and acquisition most financial Curtiss-Wright to

are this this expect guidance transaction future including at in PacStar not within close the therefore We and our near time.

Our transaction share drive our more time strong growth despite returned recent of since PacStar, to that remains Since cash billion Board company’s shareholders. acquisition and shareholders on is and history, confident accelerating than the through have fact the generation. acquisitions our allocation providing dividends. in consistent committed return display our through to repurchases management capital that in graphs we slide Also, focused team largest to topline the announced investments to ability and the just are on a The I free the and we XXXX. $X.X the flow

we in the result, our pleased As back the are increase authorization announce least share opportunistically in a fourth total to and quarter. million million our to intent buy repurchase at $XXX $XX

with strong pipeline. acquisition and low Our leverage support to healthy balance sheet remains capacity sufficient our

deliver investments, Finally, we will maintain capital and organic including our focus on improved increased growth. R&D prudent to investments operational

approach Next, strengths election. and I’d with of long-term key industry the spend critical minutes to visibility a few to remain defense like a some we Curtiss-Wright as reviewing why the businesses, Xrd November defense we of on platforms. our is confident the supplier defense

track the Curtiss-Wright a defense growing CAGAR, past proven XX the overlooked grown a or U.S. has a point have years, often growth. that X% budgets For is that at record gets above of at base-budget

DoD’s a and growth T&E of in to the also three In our sequestration. have of terms priorities on past through presidential budget growth proactively been DoD consistently demonstrated budget not top at declining. outpaced Further, fact combination ability organic the investment top priorities and have strategic is over of investment period we R&D or the office remain we regardless is The align expected who’s the reduced flat acquisitions. or a these whether through focused growth overall to with

will As continue Curtiss-Wright benefit. a believe result, to we

why. explain me Let

of defense, and side such a for our for the left-hand reactor, slide, strong As particularly equipment, the outlook of nuclear valves. outlined coolant work, in stable and propulsion naval on pumps maintained as majority we the

revenue We free which and Virginia-class to beyond premier platforms supplier submarine, this Columbia-class the of largest flow strong we submarine on positions decade. expect enjoy and the source provide cash well aircraft Ford-class content. are sole We consistent carrier, three the

support strong its the platforms, grow Beyond capabilities have non-nuclear and desire numerous platforms. applications three big we to Navy’s the to

is a receive fairly result, strategy. DoD’s anticipate support, strong for and we As that funding the particularly naval our should Indo-Pacific secure bipartisan

as to north defense XX% generating defense the Turning supplier business. approximately well the our represent electronics computing defense margin. a to of Overall, of operating of reminder, also industry-leading our equipment profitability revenues, embedded electronics segment slide, XX% of the we generates are leading which a of in primes, while right-hand

is key and position defense of electronics strengths technology. knowledge embedded One extensive computing our our within cards and secure

research the aligned encryption, such cyber help Together, security as development our industry in and that the investments Our and priorities, investments win battlefield. anti-tamper technologies DoD high on with highest focused and we are secure that position programs. strategic positions ensure priority numerous

to solid growth managers, from despite program election increase uncertainty. tends periods budgetary benefit positioned primes also the consistent deliver defense from to challenging outsourcing during of which markets, and is in Overall, DoD industry budget We Curtiss-Wright our environment. well and

I As to we Curtiss-Wright strong aggressive remarks, is I whether agile cash will emphasize would remain and prepared an wrap that and drive profitability business, up environment our challenging business our this diversified flow improve led flexible to mix, like to our by well-positioned free generation.

are positions markets. from stable benefiting our are challenges commercial our our markets, We defense helping offset some the in in of to which

driving execution and ongoing We’re our of the benefits initiatives. environment light margin the leveraging of in current our solid improvement

As maintain today’s allocation for value delivering capital questions. to conference summary, time, on up our support our balanced focused open we’ve I’d shareholders. like bottomline and call also demonstrated growth. to for remain top At we a this we and long-term keenly healthy today, strategy In

Operator

question [Operator comes with first from Arment Instructions] Our Baird. Peter go Please ahead.

Peter Arment

Clarification… Chris. Hey.

Dave Adams

Peter. morning, Good

Peter Arment

recapture the in I mentioned guess, that on when Chris, Clarification, XXXX? of APXXXX power gen revenues. the you the Do you push-out all of

Chris Farkas

Yeah.

it’s push pencil a more on really the to haven’t Right We sharpening that. bit do now of $XX little out. -- we and need million

$XX and February guidance approximately beyond. and next revenues million in $XX guidance. expecting QX year’s XXXX remaining as in provide of ramp QX. ‘XX XXXX provide we’ll year-over-year million XXXX you more on get into we essentially have be we But expect sequential revenues will and steep a to are and levels, We But still with between flat we

Peter Arment

sales kind get And expect trend, -- impact nature. then from to the seeing I power, maybe are we’ve should little just a there? had of just facility on the things that color more we you of What within closures, aftermarket that how that

Chris Farkas

Yeah.

domestic slightly So, in down was aftermarket the related QX, the pandemic we -- had to delays. due

a versus ramp in We are the QX on domestic side strong QX. expecting sequential

year, For prior down projects flat recover. a year is domestic to which would mainly large composed longer business, slightly and will take bit aftermarket be the to the little international full versus

in QX change moving So later QX. not a that of lot of but most out is into

Peter Arment

been just Okay. for And on positioned, can I not ground one Thanks squeeze has how the you color defense and last, Dave, contributor, more mentioned. just is you’re it defense a while huge that and negative really business. Is how terms when defense for of we a position are growth year. about still you be that to in this How the to going forward? overall going thinking drag, compare

Dave Adams

Yeah.

the think pick play modernization next a defense army services an it’s see is there side. will strong will with more, and really is you outlook that I up coming ground that. year a in for PacStar and Also, still need

with would side. it ground the So be right there defense

will So start will our I PacStar of and anticipated acquisition little drive think of up the then we that picking a synergies some that the from monetization that with bit.

it As you it fairly year lasts in -- or and big a business a bit, are comes for it ground and drops aware, international two, then it again. the back is little our comes for lumpy,

that a and will of of So when we the But usually come there, over we can somewhat. that up I horizon. back, but think it’s position like, on activity huge the does nothing I and defense the start sort lot have pretty said, good remains picking do ground see that it same that

Peter Arment

Thanks. detail. the Appreciate

Operator

you. Thank

UBS. Please Myles next Our Walton go with come will from ahead. question

Myles Walton

Thanks. Good morning.

Dave Adams

Myles. morning, Good

Chris Farkas

Hi, Myles.

Myles Walton

and the a can maybe segment, by You offer orders backlog.

you particular within well? year different the Difficulty] you as [Technical sort get them of shorter so How and Just your do end to in expect the businesses markets maybe sense cycle finish of a

Dave Adams

Yeah.

So I’ll level, the Myles. start with top

QX had for defense backlog it’s is in think times X X.X backlog year-over-year strength and X.X that For showed we up The X% is important Curtiss-Wright some about we were commercial. year-to-date. a times XX% I at defense book-to-bill. We note to in up and times

If next segment, X.X we this we we we’re times defense very out at times. for about to closing we’re within had at headed it C&I, times were within for X.X and as book-to-bill about by we year in we where year, about down and power, were So a within look the X.X break a strong the quarter, position.

So…

Myles Walton

Okay.

Dave Adams

the overall. think I came and strength out our roughly Yeah, X markets. of defense

Myles Walton

deeper, that in of recovery for of kind been obviously bit that’s the industrial, a you trend if seeing your one some where on about basically general might commercial orders stabilized little markets? know and you’re the on a what have a I there slicing terms in And but curious industrial finger to more tougher put of

Chris Farkas

continuing a overall QX, modest orders QX. and positivity in here a level, improvement But you sequential Yeah. CW watch rough of we commercial signs quarter the vehicle We’ve in orders. us. a as continuing QX valves in in faster our had know, steeper into kind at about October, and within some pretty QX some of to in improvements is but we’re aerospace XX% increased in we’re recovery and for by closely, expecting that

We’re good here Class Research. [inaudible] on-highway X seeing with signs and ACT in improvements some

So think some seeing signs but are too picking on early things optimism point, of to this XXXX up. really at here, I we’re comment

Myles Walton

in you hit this point a you Is re-up And fair you can accretive out at and not that It given seems, to and it’s the say new that XX%, I at if acquiring see customers Okay. as it in decision and the year? to little least to Dave activation the you’ve margins, given this contract what the maybe made bit. know said not acquisition. to good, split XXXX,

Dave Adams

we ‘XX do then quarters. feel that. the towards how QX march the years way of Myles, our hit in and in We’ve several and trajectory wherewithal and over were possibly were next I hit it’s to I see I with this it what going obviously we before that performing and sorely that couple then hope got we that can been we’ve think, disappointed it ‘XX. how ‘XX, year that optimistic it ago I wise could we and from to would Yeah. did a we would would said we

on know we timeline over-deliver. We a we But well, haven’t always, and mean, I put like, as under-promise it. you

of continue to that my that going narrative pursuit margin. We’re like relentless I in said

so remains forefront. in And that story the

You’re talked are absolutely actuation derive us start with we as about business that aside to we products. the synergies to a and is especially putting acquisition right, and we those that be fantastic PacStar going for as we replace

so And we it’s important. given it, IP-related absolutely think the swap most the phenomenal probably, of aspect

And so said, things all all about things, being answer question. optimistic to very I’m your the

Myles Walton

Fair it Okay. I there. Thanks. All right. will leave enough.

Operator

next come Our from will Nathan question Jones with ahead. Stifel. Please go

Matt Mooney

Matt is Nathan on This Hi. for Jones.

Dave Adams

morning. Good Hi.

Matt Mooney

I noted give you a little quarter, led to defense lower offset Can think, on quarter, demand the morning. timing products embedded reduced naval side, kind commercial you in Good valve cited, A think, quick regarding press on were you color But the and defense offset more orders question, of commercial demand defense -- markets. guys the orders orders in I the reduced in last that computing release it markets. across than what more was related? by

Dave Adams

our -- little are a defense We Yeah. lumpy. orders bit

as in that to new example, was press in QX. $XXX signed into back back our think multiyear it in to so QX. million This biggest just that million We that go I be if about July QX. that we naval release you and fell defense in happens XXXX, an of orders year was issued $XXX a quarter

we where at look up, X%. think, we as mean, year-over-year, year-to-date, I I defense are are X% orders So to

So on we’re strong trajectory. a

anything is and more really XX% backlog defense year-to-date than up said timing it’s earlier, I else. our about As

Matt Mooney

and how willing rates then provide if any kind orders think we to And of order going about into you’re there? color should it. Go XXXX

Dave Adams

Yeah.

kind mean, mean, of slow Those were So, specific, improve recovery just of I recovery. modest will rebounding, it see I some in steady. we is highway The to orders. construction faster expect watching into aero with and it Board, strong Research because pick and grow indicating early while recovery industrial ACT improvement as to, there a a GEP industrial to kind in of conditions more controls, Myles, and seeing aerospace we we see tech are up U.S. think do X% rates recovery, is expecting ag long tell. mentioned have carefully, we’re I going a commercial driving X, slowly down a optimism had about across and Class is to to as Industrial global orders surface but road year. on being now vehicle and be the off-highway Without general some next manufacturing we too and as in to

think, GI standpoint, think, backlog looking is position defense So, think, positive into this with I our in things I pretty from year we’re next and where a of here heading and well-positioned. are point I year, our the in time at

Matt Mooney

appreciate to you questions. I Good hear. I taking return my will queue. back in

Dave Adams

Okay.

Operator

Thank you. Truist. with our Michael will Ciarmoli come next from ahead. And question Please go

Dave Adams

morning. Good Mike. Hey,

Michael Ciarmoli

so. the probably shaping commercial Do morning. potentially maybe profile maybe have? about think more of different million you’ve looking kind exiting of you $XXX a Good aerospace? the portfolio the you’re you is, Are remaining bigger and of with the obviously just content or Maybe, product just you comfortable Dave, picture question, exited MAX build-to-print, given at profit aero the lines where

Dave Adams

about Mike. Yeah. We feel pretty it, good

and I operations associated to just talk are our the we facilities -- that aerospace. all way, our exit commercial all that we do once this there And the rightsizing. with the right-size and and I’ll were think relative by

We are back on side that able migrate to on defense the commercial were some on defense. -- to folks now

off side, the work have. of particular backfill win So, that areas as some it side we commercial we that those the defense -- of with can we

of absorption that’s something lot positive, us us a So opportunities. gives gives

is it’s we you position $XXX with about that do was our side products aerospace are and we -- remnant just intellectual for in of that -- I at right-size, million and good is so us. forth exiting not like overall consolidations, remnant the It’s just mean is contribute build-to-print restructure filled think be of it’s we’ve will and will where couple property the we’re type been that the as that of that this a the we which it’s product that And really and every margin year us. set to work and for no targets business are not year through good. exception, a we you’ve they past they of that business talked a I great good, our then

going think so in we’re forward, I to pretty And be going good shape.

we high In is issues, terms head that’s seven CEO sort the But see, our aware now in that have aerospace, I that of the opinion, has been of been or I’ve the at put focused very areas. with portfolio small to the and let’s other product adding space its business orientation associated least within pricing raises on MAX that side a a areas. own damper our this years other in like, defense ugly then in had on strength -- lies the had in always balance say, really commercial COVID of things and pretty you’re as any don’t of the we’ll and the properties space, niche piece and well our

I put can think, opportunities that out when one. So, I acquisition actively and search for go

Michael Ciarmoli

trying into potential and that you or Did delayed of China with thinking visibility of I trying mean Got paid your a you defense, comfort PacStar, play just these at confident you the you are in doesn’t XX it. exposure the on if tactically bit get conflicts They PacStar? -- you really a bit go there? mentioned kind some get exposed. which And a multiple, on future programs I couple I curtailed. are Russia. table How ground get you you’re have of as to how like said seat more was the times on and It then But talked do times times, just know maybe level seems calibrate to that There higher. XX double forward a PacStar. a the you the there. there, there. Army to the risk with paid little more is mean comfortable modernization. sort of of

Dave Adams

Yeah.

and discussion, what priority while our of the positioned stand And -- is they As priorities Army the up did as particular How six about traditionally we doesn’t the technologies see the We areas the we we and -- going really war back theater, you’re the the how table, network priorities alluded really forth in seat in anything this those. the in at high typically fighting -- top is tanks which to future. amount think for in at right, the wall. best this But had I we in top time the built among so for externally if and well look get earlier for against really character with other six and Army’s it looked investment reviewing -- in PacStar how also among future. through products And it would talked characterization And in our withstand. narrative Army time, same consultancies, in the and this participate internally side. a the specifically they’re the Army of to on. spend it’s PacStar modernization, considerable

the top creation the of middle expeditionary more I if the the structure, driving independent it’s strategy a in of and can six mobile the force force. really the So is of is modernization DoD size which of

side has to tied the and Army terms network the has field. It’s while personnel PacStar really growth just think area get potential PacStar not battlefield more on areas, it hold the that. IP-related in and account This in and the soldier By other been connectivity people to, and talked on inter-platform light tank operations of So a are of what shining cutbacks. fantastic commanding tactical every that’s actual a Army we’ve networks. with -- to the out is the hit a usually the infrastructure is in tied

we is And to products so one, than and it one that really TCG. to we We on it two. a side now added look other embedded be plus the we going add some of provide more think to to that at the computing we be

I what you’re that. we that over different even hear so and can’t I ways, saying many explain vetted in So

spot. areas heavy on environments priority We in is are, research equipment for test denied policy GPS to tremendously be this we defense areas, good we we make in at government the and the a acquisition to compliant that classified we in going products, and side we that, looked systems the industrial certain that we’re that the operating transactional for where authority. very security are commercial heavily open-systems So active, regarding the hypersonics, flight that lastly, are other where situated are the

secure. reasons feel all those are So we pretty

Michael Ciarmoli

in jump Got the I back queue. guys. helpful. it. Very Thanks, will

Dave Adams

Mike. Thanks,

Chris Farkas

Thanks, Mike.

Operator

to today’s and I now that Chairman Dave would call gentlemen, over and session. Adams, CEO, concludes to back turn Ladies like the further question-and-answer any remarks. Mr. for

Dave Adams

forward our you a joining Have XXXX We speaking for us look great to safe. again stay earnings during everybody quarter today. fourth and Thanks call. day

Operator

call. Ladies concludes conference today’s and this gentlemen, your Thank you participation. for

You disconnect. may now

Curtiss-Wright (CW) 1 Nov 202020 Q3 Earnings call transcript