Earnings call transcript Q1 2023

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Operator

Welcome to the Curtiss-Wright First Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open for your questions, following the presentation. [Operator Instructions]

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

Jim Ryan

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

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

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

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

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

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

Lynn Bamford

in-depth everyone. our begin outlook. performance provide covering the by financial review more will I over turn the our good full Thank brief a financials. Chris and XXXX call you, update first I'll of to of morning, quarter and on a Jim Then to year highlights our

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

XX% improved off we quarter first Sales great highlights, million XX% and Starting $XXX start. to with are to overall a organically. our XXXX increased

in higher in in see our Starting Arresting from year-over-year role A&D were overall a reflected aerospace first and markets, chain last results defense and contribution completed component our in markets. A&D the the to some strong acquisition supply Those conversion all played driving stability quarter. the with commercial and sales in Systems sales XX% the electronic results strong which June. growth we backlog Our reflected on encouraged also

As you achieved some to military, press integration our equipment mid-teens orders into and in continues for secure aircraft new this reflecting recent seen demand. releases, business in arresting growth its out our very Rounding going OEM strong Curtiss-Wright of we A&D, systems have commercial aerospace its well. is

although our markets, exceeded strong we end commercial sales Turning our which industrial across we nuclear growth our markets. to Growth year-over-year, operating sales in commercial general up XX XX% growth income, XX% delivered process delivered and and year-over-year strong increased our points management, in our in and quarter. chain operating favorable excellence continued absorption This and face we operating higher some unfavorable commercial improved overall did the expansion mix on supply on dedication margin sales driving reflected to margin. performance basis

report payment per to to reactor typical increased Of China. XX%, $X.XX reflected earnings primarily the final APXXXX coolant to XX% exceeded of that Adjusted strong of year-over-year of and first the tied expectations, share despite flow cash this our note, I'm higher and Diluted sales. a delivery increase pumps included to second the outflow. free quarter pleased cash year-over-year our due

remarks. key XXXX. drivers key wind down milestone call, Chris we this our as color achieve our final the As prepared on noted of during shipping quarter our cash first in flow additional expected we later some February will to the pumps, provide earnings this to in four on free prior contract

the and commercial commercial the also strong strong first products. quarter, increases of nuclear and defense up reflecting were in demand our industrial particularly A&D aerospace valve XX% in majority across for our within year-over-year, orders electronics markets, commercial markets New and

on builds X.X outlook. result, times book-to-bill billion sales in quarter, a our already XXXX at and our As provides now achieved than confidence visibility more of great achieving the backlog and we strong a which in $X.X first

touch upon XXXX like year would I our guidance. Next, full to

While overall guidance we in this driven by are the to at mid-single-digit all and time nearly end year, elected continue growth, project our our encouraged maintain the sales to we to markets. major by have strong increases of start

briefly two like some to I'd highlight those markets. in considerations of

First in sales. more Curtiss-Wright's than total represents defense, XXXX which of XX%

cautiously correlated tracking We steady throughout year. such improvement and are decommit recovery lead closely we times optimistic as electronics metrics our in ongoing supply the and the major with chain the remain customer defense for

of Next outlook to current cautious long-term for economic expect to Curtiss-Wright's bit feel confident commitments remain expansion quarter, be X% invest and year X% year a our the those our to first margin environment. following we in externally both XXXX. our favorable current strong in continue is General research continue balance in appear will important full and internally It in note conditions guide dynamics, growth full continued Despite profitable sales to the margins while in increasing we and a and development to to Industrial, operating as our more expand for the Curtiss-Wright growth. given while we funded I

in We strong cash generate on free EPS to also track flow. remain deliver diluted solid growth and

our Curtiss-Wright summary, XXXX to Growth of execution of combined strength well success for our In by portfolio remains in positioned strategy. the driven continued the and Pivot

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

Chris Farkas

quarter & I'll X% when grew basis results the impact first Lynn. an on of increased XXXX of overall drivers sales our key Industrial, begin and excluding the you, In organic Thank segment. X% FX. by with Aerospace

and on commercial experienced we wide-body Airbus the strong most platforms. Within aerospace segment's sales growth by double-digit driven market, OEM narrow-body demand notably

our market, well industrial on-highway as vehicle industrial general platforms. increased services the as treatment by surface products results sales driven of serving growth single-digit reflected high In

reduced gains sales in F-XX. to production programs offset due jet the including expected, by timing those fighter were aerospace market various As on segment's defense partially of the the

the to profitability. quarter first Turning segment's

persisting in reflected commercial early pressures favorable inflationary results excellence XXXX. and sales the initiatives of help Our higher to benefits continue on offset mainly which absorption our

by of book equipment which sales and order the first growth aerospace Next, partially programs Electronics drove principally defense. the segment conversion of quarter sales UAV helicopter strong in the revenues ground lower higher to That increase reflected communications embedded equipment on for computing offset in Defense overall various tactical our market. was XX% defense of

Regarding confident of of to well segment's timing Operating in performance. flat components full a higher the year-over-year and R&D the due investments. in the later profitability. mix review as electronic year as achieving availability we I'll segment's in income sales in detail and was and impact the impact Despite prepared mix timing and as principally despite and our remain operating sales the resulting increase remarks, strong more on

carrier ramp-up process and principally sales from CVN-XX results and the by growth the acquisition supporting well commercial as was submarine contribution reminder, business. Power organic the driven nuclear of resting reactors aircraft segment. growth a existing power naval growth defense defense are of that Systems and revenues XX% Class market, Elsewhere, Columbia In And low sales the reflected market, maintenance double-digit in our operation process. Next in the the and aftermarket in in market. Naval as on solid higher mainly a aerospace our and valve programs. Overall the reflected the strong reflected as mid-single-digit in sales MRO from

segment's Turning to profitability. the

basis operating reflected up a combined the operating generated first absorption. the and continued growth and principally points which To sales overall XX in we results, highlighting the margin resulting quarter income focus sales strong sum double-digit resulted Our portfolio on excellence. in expansion, results growth of in strength strong year-over-year and again and favorable both commercial our operational

we unchanged with outlook begin in turning Arresting where offset guidance our X. line Slide and full of from from a to continue to grow Systems projecting year acquisition, to contribution partially long-term X% sales our provided And I'll by initial XXXX small sales to X% end-market with total X% headwind the February. Next, our sales X% includes our which guidance overall, from expect organic the on guide FX. to in we're growth

XX% for This Electronics gradual in fastest-growing the upon growth. a aerospace sales I'll the X% where business that organic a defense as XXXX markets regarding we increase contribution X% the to Defense well note the year, reflects be from expected continue start end our will in Of few as with start recovery and our slow mid single-digit the sales resting chain. our to supply growth to aerospace market comments to to expect Systems despite X%. based expect we defense and with

tactical unchanged to In our our we Ground some year growth conservatism environment. performance these as Defense, in while portfolio. we to the we of full our commercial visibility project quarter communications we were defense chain remain and estimates pleased confident are for the equipment, and the proceed strong that with to X% provide first X%, with light continue markets in long-term aerospace, Enable supply of

growth reminder a wind a also growth flat while markets, the expecting process And we commercial this down at from A&D of as the million. and in headwind X%. our sales our program to outlook of overall the includes Outside are flat approximately on remains $XX market, up CAPXXXX unchanged power market revenue

Excluding nuclear those that XXXX, the will commercial in weighted to turnarounds. be of both mid-single-digit the markets, the anticipate first we due we the expect and and timing year process sales growth in and impact, to of half outages

excluding market Finally, to up at note X% would sales commercial combined million it's CAPXXXX total as to important the commercial growth the overall X%. that headwind, we look be $XX

growth, unchanged where by begin Continuing segment X, Industrial and with outlook guidance on X% line sales million year and our headwind including X% a X% or $XX from remains slide to I'll reflects Aerospace full in top our FX.

commercial at growth project our and operating ongoing absorption margin in on income excellence benefits continue profitability, and solid segment's Looking initiatives. sales the favorable to we of reflecting

as to sales back-end we Next to more confidence now the expect cadence X% solid following loaded look with expect to first historical line performance. in we quarter X%. Electronics, forward in we what Defense than to XXXX in and our continue increased And be experienced grow less with revenue we

and margin improvement backlog remain track by year supported basis year. to we XX expansion balance addition, the points full our expectations for for our as chain the of we supply of strong operating In on and healthy outlook through XX move to

in sales Despite our be both negative a and market. sales impacted on Power, Naval to CAPXXXX remains shift to Lastly absorption by X% segment growth contracts lower the revenues the process guidance will of lower-margin favorable & mix power higher on and in unchanged. X% development profitability this

in operating be excluding flat will items this segment However, those nearly margin year-over-year.

excess margin income of X% expect from summarize growth in to So we XX.X% improve sales ranging and total to basis XX operating points X% operating our XX to to overall to to grow Curtiss-Wright outlook, XX.X%. expect

will EPS on our financial diluted our outlook Building to slide up X% X. to reflecting quarter our sequential adjusted to earnings first and our solid $X.XX our in year of full full year XXXX, and outlook first we expect principally improvement growth. the maintained quarterly strong with We've we throughout for fourth the operational adjusted per quarter guidance our ranging expect upon recognized XX%, performance, be XX% from approximately share project be strongest. Continuing or $X.XX half

Lastly, cash our full outlook. free year flow turning to

million Our cash $XXX flow guidance of cash improvement million XX%. the shared the free Lynn remains QX, in payment. despite solid for part to as $XXX unchanged of of the to the a And outflow adjusted collection of XX% earlier due final typical experienced to in year-over-year in we range CAPXXXX

Also, by during mitigated largely beyond due healthy we levels timing were the CAPXXXX while collection saw payments. quarter quarter, the and tax the higher to cash year-end the first payables outflows of payment, these

look we chain reduction. we in a greatest our inventory execute across the on very challenge of year remains forward book. and to begin conditions opportunity ease balance and As healthy supply The order the

remain on focus flow confident conversion continued free XXX%. free and working as capital yields of performance excess quarter in a a we reminder achieving which year management, cash rate our flow cash first in guidance our full Given

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

Lynn Bamford

Chris. you, Thank

Curtiss-Wright well in As we today positioned results is deliver have XXXX. discussed strong to

excess to times confidence and visibility guidance. to commercial Our A&D XXXX achieve providing in first book-to-bill generated of quarter our backlog a financial growing our markets the in while each adding X.X and

near- few Curtiss-Wright Looking I'd line growth year's review we top long-term serve areas, outlook. remain long-term beyond healthy. the and the like prospects a those expect of to this our X% strong X%, influence sales to very to which positively and of for markets we

growth driven markets the defense defense US First from budget. Curtiss-Wright bipartisan strong to is the the aligned in multiyear well benefit support by for

XX% reflected a Following of have book. which growth, to strong continued the generate DoD the healthy December, we order signing FY XXXX in budget very and year-over-year

and aligned budget over $XXX we XXXX President's to X% approximately FY this XXXX vehicles. billion well fighting an request well growth strong US platforms, More DoD the for increase enacted reflected from of Army Within in Corps the of the support amount. legislation as US FY recently, Marine aircraft Navy the and of benefit modernization are as the

grow global likely will while budget addressing appropriated final in minimally cover a the to threats. that higher suggest indications Initial continued to inflation, the level rise

the could continuing be that budget understand resolution the the another is potentially linked XXXX likelihood we enacted. before faced with However, we FY

order combined Curtiss-Wright well-positioned deliver and some the stabilization insulation that further Should book with defense any provide backlog, is in occur, from delays. chain, expectations a supply our growing electronic healthy to on for it and when temporary funding should

joint lower funding growth in AUKUS submarine decision decade. submarines than increase the initial resulting production, while into combined to with Columbia next submarine five the Australia was emerging to supply the defense drive expected to Regarding in up the well naval ramp to program, Virginia-class is revenue sustained for Curtiss-Wright expectations,

our defense supports long-term that spending the end defense Beyond an outlook overall for NATO allies from markets. increase expectation in our across global our growth

over the expected steady several Airbus the rate in for growth Aerospace, Next to should drive from we and aligned Curtiss-Wright. remain next and continue customers years Boeing production increases our Commercial with

growth well drive safety existing are carbon-free which to nuclear of includes Nuclear energy within businesses, for funding. the the and strong receive positioned We our also infrastructure energy for independence. supporting advanced continue reactors, innovation in the development and Commercial build-out next-generation nuclear This long-term and

list the Westinghouse remained about built be plant new APXXXX Europe. we power In growing in Eastern of to expected enthusiastic addition, potential

the on Regarding of lines, vehicle recently commercial highway, a provide the OEM customized growth electronics and including support This great efficient safe alignment Along commercial industrial for for hybrid electrification. we markets, contract that to those to truck to represents our off our performance. another maintained commitment strong EV provide electrical power we long-term with favorable secular push leading management will a large solutions vehicles. trends, and and example and vehicle secured

to Turning our profitability.

year, growth strategy. operating our in line growth is this guidance, We the reflecting expect of Growth in to income execution with once Pivot sales our to exceed again continued which long-term

and will our at XX of our to drive organizations XX commercial throughout least points. basis expectations contribute points expansion XXXX that support We with efforts in overall to margin increase programs basis continue the excellence these in XX

mentioned investments approximately investments, XXXX growth. these and research deliver as to and funded in year-over-year of including margin R&D our making previously, Curtiss-Wright continues total strategic Also, while overall organic includes fuel programs. expansion to outlook increase operating a million $XX both contract internally development future

Turning to healthy sheet. balance our

Our XXX% adjusted remains in free cash of we cash as expect to generate conversion flow XXXX. free strong north flow

and of focused more and highest the rate team high-quality the has made interest organic use remains environment funds the high capital the While allocation and our best to and allocating operational acquisitions including pursuit on challenging disciplined growth investments.

sight XXXX. margin total on In three-year in closing, we expansion, continue growth. Investor issued to in the have line operating total commitments remain implying solidly growth over solid excess the X% period revenue of achieve track three-year to CAGR excess of double-digit in We of to EPS Day revenue growth

to conversion our cash flow are We tracking close average also target. free

that pressures At cash assure flow supply in guide, chain to the just current can an our Growth the average profitable ongoing diligently our one on XXXX three-year established. growth is remain rate, Overall, targets to midpoint stakeholders. of mitigate effort achieve strategy I each our XXX%. long-term in to our conversion demonstrate of you confident yields value to I well team Pivot positioned for is working strong Curtiss-Wright we every the to the deliver the and shy and on drive free of

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

Operator

Stanley. Instructions] [Operator now Our go open coming with first The from for questions. floor Please is Kristine Liwag is Morgan question ahead.

Kristine Liwag

everyone. Good Hey. morning,

Lynn Bamford

Kristine. morning, Good

Chris Farkas

Good morning.

Kristine Liwag

Hey.

some outlook embrace power reactors Just for for up to Poland APXXXX be of last How does small nuclear There nuclear small power gearing complementary? Poland Is $X month this the Poland? to reactors. lend sales Is billion that following XX affect reactors. this this suggest competing? that US nuclear on up the and were reports may

its billion. for also, then $XX view deal financing how see Do Poland And you you any Westinghouse previously update can And us give indicated project? opportunity? with could you an around cost on this this risk

Lynn Bamford

is or. SMR of that very of about different. either it's to the build-out fairly are out outputs is strongly The And build-out the power not the completely APXXXX. So, talking really I'd perspective complementary start the an

a a APXXXX an better it's than multiple is And needed economical so fit SMR. much where the and more

them that any referring very announcement complementary -- SMR the the don't as not in of understand you're as We see was we're of So see way. and what from competing to build-out. we I them

as complement it Poland, in was six reactors to always a framed large over In stated year they plan the ago. for that

that's good. So

available I are working think across the funding make funding initial seeing of sure these they Europe. Eastern indications the the IMF from that we're to

so And reach there we accomplish see with with U.S. still government But pieces ready out think out in ways independence. of Poland. these progress continue countries think our be and very their to for be the worked out I legislation regulatory things help things energy to that of I goals to the to are with agencies worked to be for

Kristine Liwag

I we for could question Thanks how the color. see Can pressures provide supply more need we to has what And are on if problem the metrics evolved? regarding you And where inventory for or ask alleviate? details second a to chain.

Lynn Bamford

So, yes.

area that's teams defense platform. obviously available the components largely components on use available we those just through the across the Electronics Defense the continue really in that with more from electronics chain the the in XXXX have which redesigns and most supply problematic elsewhere is pressures complex organization. has that are not segment But mitigated going the complex electronic So, components there and and that's an remained the option into

I'm efforts way as other their pressures managing things. say And the proud very materials analyze raw things some and So we cases through supply the aren't teams chain. -- we're that with those. in But other remains of very to the there focus are our not much -- of it's

heard us middle in cetera et vendor on things allocation, we to lead-times, parts you've things. seeing of the the commitments, push just -- of supplier a year out number on-time last about monitor ability in we're essentially talk electronics variety delivery, our the component and pull or of Some of and a

that across right commitment but direction the across to weeks the the say QX I want had saw those measurements. is when And to we being gone in say was board, of absolutely And it in the down don't going more dramatic out key trending about up specific suppliers they're in those stronger various to much excess have weeks. way XX these that start XX bringing lead-times really have

So, still we to been XX seen see would to longest begin manageable the of the or lead-times. to levels to the rate XX much where and have not but and would XX like have to XXXX a just more quoting acknowledgments those with kind beginning

to we're something talking that's work that to We was with. able work we -- part XXXX up starting missing the components the some that build from accomplish teams several and and have accommodate could from But tons we a board to when and just get measurable needs. asking less to is last to a much specific we're more engaged to them us week calling weeks can't nothing have pulled the but look suppliers in conversations being this with one then

can with change we supply So, to engagement base. our feel the it beginning really in

$XXX So our comes in every part normal on some still time. in wider bit optimistic. segment Defense not little like than variability million of cautiously Electronics that is the out to guide the a We feel Accounts there. It's for million. $XXX

the good strong year. be really we that we'll and guide feel achieve it a So, to that's in able

I or-- know I Chris have you don't chain really the that's supply on anything you'd guess add if So,

Chris Farkas

by I a reduction $XX Kristine we're mean million just targeting in on year-end. inventory specifically

inventory burn monthly specific impacted of plans for those really a and supply most requires plans closely forecasting our monitoring focus planning shift. really chain the we're the enhanced on by that make type down and headwinds are processes basis. purchasing businesses that to It We have on

orders tools analytical focus align new and And we've that levels. material don't invested with more to improving visibility provide with real-time our deliveries and more And tools have in inventory recommendations we're supply our for where managing closely. shipment us new chain we demand and adjusting

your think of provide opportunities a really us at So, entire with order that mean I lot faster a going to pace. inventory across down our book I a to business strong is higher at level just burn

feel flow. we its in do what to So, cash good about contribution there we can

Kristine Liwag

color Great. guys. the Thanks for

Lynn Bamford

Thank you.

Operator

ahead. comes Peter Baird. next Arment The from question Please with go

Peter Arment

had kind defense of year. you Yes. Good Chris, print, operating Chris, performance the first the of the after that up the rest but quarter for of mid-XXs kind before. of, morning, the a of margin margin on obviously Jim. The the electronics big kind Lynn, have kind step implies guidance guys

maybe confidence of -- little talk through the give guide? that just of Thanks. in bit some that could factors maybe walk So you you a us

Chris Farkas

that's first on as And sales quarterly sure. effect full margins Yes, in important the overall to incremental we've or it's margins. disproportionate really volumes XX% are XX% mix have on what R&D really changes basis the can year full a about it's here increases year I happened other typically calls margins past to QX. mean know talked items. versus the on absent in quarterly a the Across and the investment in

some defense. a pretty that it mix fairly basically decent saw small And in in were quarter first of the fraction that components of I a components. you hold revenue. on see about faced electronic and the these ground last calls business up chunk we upon only year of some as can based takes availability the improvements talking areas But significant changes we we think of In impact some in

year-over-year. -- say of lower revenues then the increased. in output And which pockets were created margin revenues beyond in while under-absorption. would mean in component-related up So systems that I our general, total QX, some I $X R&D cost businesses a that we we revenues few there faced lower-margin higher million were had increased also decreased and

mean, cadence be XXXX, our typical defense for quarter we and lowest expect electronics. QX will for revenue our I So

the we will within revenue the margins full be to into expect And improves year absorption improve. incremental deeper that the As get our typical as year we range.

right that the the And to vendor and and we stability we understanding So supply pretty we promises is of diving a and good about that that commitments. feel commitments have and chain that have the related now. material lot understanding deep

Peter Arment

That’s nicely. growth? really very business Can maybe the of then how then and helpful Thanks. the you're and nuclear color. is this -- trends that's aftermarket seeing you kind kind of just switching up how some about And plant over sustainable your you Lynn impacting life extensions talk in of see

Lynn Bamford

Yes.

mean with commented exactly something they're the dialogue what sight is. that because sort it So that plant teams the And maintenance that starting blends our of years extend before work it's extension. with is or have to of the life line to just don't It work is these reactors our I traditional associated whether always driving together, it's is customers from but having additional work exact XX we're definitely commitments the XX growth. maintenance that

their I only next And well, end about of of the days. decade. and well even end the honestly keep back back in it's XX decade decade period. early this that into It's in plants through well, and think US they next plants we'll of one-third achieved into the reach the the licensing extensions there's more the have going middle their license And of really as sustainable already the

early really days. So

sustainable. is trend that think I very

Peter Arment

Okay. Thanks, Lynn.

Lynn Bamford

Peter. you, Thank

Operator

The Please Walton comes ahead. question Wolfe Myles from next Research. go with

Myles Walton

Thanks. Good hoping morning. was to.. I

Chris Farkas

morning. Good

Myles Walton

the second quarter. FX benefit in margins is was to was to clarification. that a for electronics for defense just I right to it Is back to go hoping read one -- actually

that it's some Is from So see embedded markets. the your points. a a little closer bit volatile computers can volume-based understand decline benefit? also basis XXX year-on-year think not of mix where therefore business here, And in I the I of didn't we and be to the came growth is but super

Chris Farkas

mean we on $X impact sales slight in a big the very No, the income And million. was I some on was as see impact than well. impact less FX mean, really basically insignificant wasn't the did quarter. I very, QX. operating -- fairly we within it

absorption it of nothing different down other year. will on and a into decreased how increased that revenues cost deeper get revenues make components that systems as to didn't note I to we that's lower-margin businesses the improve timing that margin affected our of were I boils So mean there output way. businesses. just going that kind just few our the get their they and of of availability higher mean really the needed all that and really and

Myles Walton

it impact it sort income, exhibit more, order any to on sort flow order under sounds Can and pipeline the any press And maybe Okay. I like that the shows board. of an you And -- you or behavior across release circle but then your showed covers in the what with operating had Industrial Jim. business that hesitation? us just around was an sign FX can looks some the signs of good slowdown like give of, customer at industrial look any Lynn

Lynn Bamford

for since above Broadly much very XX last very trying vehicle they're end this still have orders item and order a our feel bit is seeing still were strong, us slowed confident year about still industrial what with our in in something levels. very watch we're which we pipeline and though markets, we're customers. I to will a stay our the that say but close

good. So

that down we've times adjusting and as their of inventory sluggishness customers nothing then understanding our that bit lead to to patterns QX lower in some to some back but think maybe concerning are and are a been we're is we're bit burn of those being do and a I QX. able QX what -- seeing the little levels in people order order trends

I if our in surface continuing major our very technologies take order then another strongly. is patterns area around And business, they're industrial

forecast thinking maintaining our with there for year our come definitely today item. of out to for really area. And It's the is have what the we the is guidance that cautionary in part solid year. a it's watch we so But full in still feel

Myles Walton

right. you. Thank Okay, all

Lynn Bamford

you. Thank

Operator

with next the Securities. question And Please Truist Michael Instructions] ahead. [Operator comes from go Ciarmoli

Michael Ciarmoli

guys. taking parse Chris, can for you Thanks maybe Lynn supply out. chain, morning to Good just questions. back the or Hey. maybe

got optimistic the dynamic pulling the But totally around or line better this caution on were that I a was maybe the defense you've reconcile defense in growth you different aero on Can that, chain. ground you supply of there? products through is said what's based think you sight, or you're chain. portion and of just also supply

Chris Farkas

markets. Mike Yeah. They products that different slightly are support those different

not So ground a defense semiconductor. it's like is

You're switches that dealing with along and lines. -- routers more those and things

So in were -- good to business. we here inventory that backlog for in volume and convert the that regard, ready that coming strong on

mean, seeing the business, really mean margin you the of too detailed a your I there. alignment don't think higher also -- side greater into system get cost There's I have mix. some aerospace where within want revenues. to I I you're that's the

of have for chain as And coming here in up going year. based margin feel were that But also availability deeper there mix. confidence the help we But issues. the supply upon getting the into we're seeing to that what pick door, we year, will out we're the that that planned confident get that the some ramp think we then I increased with component that's the

Michael Ciarmoli

the subs. some yet? Okay. funding there with the is any you was back estimates per and That’s get And trying progression maybe Australia to some then mentioned haven't cost fair. seen I throwing contingency I under but any seen to big know impression Lynn, you funding, AUKUS that out five Have total two guys I year. there.

convert think seeing you're and little some maybe bit what on AUKUS, guys? revenues us of more you would So into when for as give a you that to and you if could

Lynn Bamford

a made out. And be to as going -- bit has lot been no not optionality when made, yet. how left any though subs. to head of to engagements. even March, from has flow Virginia-class it the we this the were a flowing of thing frank office interesting announcements on And was beginning scratching the play to have mean, I It three announcement with seen was for information slow. have was two just We're that funding they the in

we're mean, pretty a two producing subs I year. the steadily Virginia-class at

So of amount also reasonable strengthening But for they forth in that's us. bill the a good for put base. steady and supply money that

And so that engagement waiting money color that. of have will to and probably of understand be that first that's money the some we're the some meaningful spent to still on

and figuring may it's whole mean day, funding near-term yet -- frank. moving current XXXX be some I maybe more they're the XXXX. the pretty slowly one up it still thing But So I is it scenes us. for But and no than this think be flowing out underneath but things show to seems, talking

Michael Ciarmoli

Strong the just like we're think aero for I but you supply that we've aero? platforms it year the even there in Anything then growth there's And some still in increased demand, there? got of Anything any quarter, called commercial okay. out -- pull-forward or based conservatism even up growth one obviously going color this see the outlook, Boeing to Airbus satisfy the Was there in on commercial some guess any deceleration but last though Okay, on looks me. you're I Airbus. there, chain seeing? just risk full ramping

Chris Farkas

year. good mean, is the long orders we I really quarter. for start and mean, businesses. cycle commercial the both in a the XX% up again Strong order book our had aero cycle in first I short in

current growth lot a got mainly I of we've and Industrial strong were Aerospace a in So outlook. QX confidence the Sales XX%. extent. up across mean, lesser was in to it

Airbus year with going ramp and flat look do not about that X% to But to excluding customer chains And right chain FTE. full and in the We're high-single-digits, us conservatism growth indeed supply to good managing us. at supply traditional their we contributions it's continue relatively avionics we to the is some -- to a just X% low-double-digits we for aftermarket is really point a for understanding and of have rate really with how X% to OEM excluding year-over-year. trying growth that your have X% could forecasting what And when like then think and aftermarket FX. do be the some to affects as Boeing. and FX, the business what across We and really

Michael Ciarmoli

Okay.

guys. turn Perfect. queue. back Okay, in helpful. I’ll Thanks, the that’s

Lynn Bamford

Thanks Mike.

Operator

go from comes Gabelli with Funds. Please Bancroft Tony ahead. question next The

Tony Bancroft

lot a a seemed pipeline, sellers' and there over very And it's made Are for acquisitions and review a outside my sort like there? acquisition. thanks rest maybe question. Everyone guys had wide sense. I give it about a Anything of performance sort good maybe core into pretty the Thank seems sort the your just of you. it of out your other just that. you question what taking of us that but the else like it for -- had of core maybe you done do expectations go maybe like well

Lynn Bamford

wins. These the year-over-year the their guys are business. There mid-single-digits in of anticipating $XX seeing of of honestly, question. out pretty and around XX that globe Yes, really announcements really, with is business we're really that minimally are for what growth. growth Systems you are steady making really our healthy securing Thank double-digit of drumbeat a been across pleased we're driving were we for multiyear them revenues million for resting millions and definitely we've

really And so, really, pleased.

part initiatives Curtiss-Wright are they it chain, our supply is type advantages acquisition our the also of Curtiss-Wright development sweet for really that business our really lean spot and take being sales can channel of of reach. our that through through a And but really

them they bring stronger of can things and We grow Curtiss-Wright. bring so, they to us. part as things And to

-- technology much it so of to Keronite, type a smaller the we business added obviously but was us. that is a that And brought key acquisition which

through. it's not filter narrow that very like So will this acquisitions take

we the year. five pipeline on this of acquisitions strategic we they We can issue to accretive demand of that them types financial our our them the performance has acquisitions and filters. meet spot. that financial year Curtiss-Wright. see review our just been probably this because to already definitely seeing we eight Mostly We've businesses the out be But wouldn't started to don't pick get of in as up passed we to a

that -- them. won't find doesn't mean so we And but

past we're that have the heard -- community. the banking in We're in about always talk something us active may very you

to to we seen that a to family a might that our process try target as acquirer companies and with steady extent consideration. books are and So the for ownership a work go held along and with us, equally as come even be our to greater relevant into the books those But we're private desk with PE really more exclusive Curtiss-Wright. convince teams reach

So that that properties we're good on. of there's working there number a out like

drumbeat I able be some of And our of going maintain we'll feel to acquisitions so, forward. steady confident

Tony Bancroft

Great Chris it. and Very Jim. helpful. Thank Appreciate Lynn, quarter, you.

Lynn Bamford

you. Thank

Chris Farkas

thanks. Yes,

Operator

Jones Stifel. Please from with question ahead. go comes next Nathan The

Adam Farley

morning. Good This is Adam Farley on for Nathan.

Chris Farkas

Adam. Hey,

Adam Farley

follow-up good in on hey, I -- orders. wanted the wanted to morning. I strength follow-up to new

that pretty that continued deceleration at as showing good provided you rate markets growth of as could through end a already acceleration relative the out? order kind And here call You've color are or any but April there are Thanks. previous some quarter? similar

Chris Farkas

one. that take I'll Yes.

So book-to-bill a above was X.X and in reminder, XX%. as It just pretty our just QX QX the solid. times was sales, sales up were

So that the order conversion. sales exceeded book

were particular, trends in commercial aerospace aerospace up both and and in The higher and and orders order process defense well up is positive as And we markets backlog Our X% see year-to-date. million continue in ground in to $XX nuclear. total.

you aerospace think think I as rates orders, growth the seen, what sustainment and we've about commercial consistently high. are

nuclear within As seeing the been mean markets, process the growing teens. at you those order in and we've look what are books I

things I think that are happening some good there. there's

last order lot the outlays, Defense continuing between record the of a slow and was talked -- We and start the Electronics to business we QX in had year off year the last the resolution slightly about QX that book just that. and

into order those sustain Defense enter that year-over-year up levels year to and XX% Electronics, continues near highs. is book those we the As QX, record were business QX order here our for that

were a had you a economic take what's I industrial our double tech single high look look QX. the markets, growth for happening I the when digits, business at to a bill all continues at think good digits vehicle and rates positivity. mean, So markets, the lot markets step that that you low surface weather across mentioned order back mean, GI and you I signals. at take send it served within that Lynn of

that's big booster. confidence So a

then feel then good thing out important XXXX back And other that And we that little as that for business even with excess to out we XXXX going the are product business, you XXXX next power strong I'm $XXX backlog bit the -- note things trends order think LTVs this for look in at not provide so product to in five degradation introductions XXXX and space when a from doing even is further, some new we here that some pre-pandemic that's like year. look a that's like the is of space in levels, guide of time. and order million the in book vehicle a But management those years. only in electrification, the supporting launches over QX product just and of and in to the down we're in I have

to funding we slight demand. largely year. of similar on are the see on industrial beyond optimistic some we're there's They who've perspective. even a companies, exciting continue stuff listen to that beginning our So many from bill just a some to that of And remain starts the signs development and then boost working infrastructure the to have customers had cautiously strong

So, the we book it. feel order around and pretty good about looking all

Adam Farley

for questions. taking you Thank my

Lynn Bamford

you. Thank

Operator

question next Please from Wolfe comes Research. the with go And ahead. Walton Myles

Myles Walton

for the the if alluded mid follow-up. Thanks digits composition was quarter mid-teens. the quarter taking the your last you'd XX% this, single think you you I did up to in I obviously, be apologize just first And on the of say to in also And guided first but half EPS call.

point particular versus sort of you're quarter So quarter year? of plan? purely the can forward first in of that if also within you upside And from to in pull Thanks. the your second it the the areas is a seeing course the

Chris Farkas

Yes.

results come So at quarter of first I Myles. little here look think in take I a the given expected availability to than approach you better the more and should happening we've the take a trying to did cautious been electronic mean a what's bit the been components.

mean, year-over-year overall was Electronics Defense we it I what strong the surprised there. a pleasantly for So very had results with the and performance group. we're

can the in right? But availability where radically from feeling based upon electronics I position. defense perspective and are the think that we're certainly with conservative we're and business taking what on confident more order within year how we an seeing a change things right just given now book we're

and that's XX-XX perspective of it's But point at things approach that the when like kind Right half-to-half how you end go from think -- We to this more cautiously back look we're day. and how seeing were at you about we're perspective the mean, and EPS that's from this XX-XX, we and in have I at of of pretty shook last certainly think saying now EPS the we things of I why range I year, a and the take feel an you're that at some XX-XX. you look just the numbers. out an have in good split, confidence.

Myles Walton

right. All you. Thank

Operator

Please time. now this at I Chief for turn Executive the Chair to floor ahead. closing questions further additional over Officer no remarks. are will Lynn go Bamford There and

Lynn Bamford

forward of day. Thank today. quarter our all earnings look you again you a for great to conference XXXX us We second Have during joining us speaking call. with

Operator

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

Curtiss-Wright (CW) 4 May 232023 Q1 Earnings call transcript