Woodward, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Woodward Incorporated First Quarter Fiscal Year 2021 Earnings Call. At this time, I would like to inform you that this call is being recorded for rebroadcast and that all participants are in a listen-only mode. Following the presentation, you will be invited to participate in a question and answer session. Joining us today from the company are Mr. Tom Gendron, Chairman and Chief Executive Officer, Mr. Bob Weber, Vice Chairman and Chief Financial Officer, and Mr. Don Gazzardo, Vice President of Investor Relations and Treasurer. I would now like to turn the call over to Mr. Gazzardo.

Thank you, operator. We would like to welcome all of you to Woodward's first quarter fiscal year 2021 earnings call. In today's call, Tom will comment on our markets and related strategies, and Bob will discuss our financial results as outlined in our earnings release. At the end of our presentation, we will take questions. For those who have not seen today's earnings release, you can find it on our website at woodward.com. We have again included some presentation materials to go along with today's call that are also accessible on our website. An audio replay of this call will be available by phone or on our website through February 15th, 2021. The phone number for the audio replay is on the press release announcing this call as well as on our website and will be repeated by the operator at the end of the call I would like to refer to and highlight our questionary statement as shown on slide three. As always, elements of this presentation are forward-looking or based on our current outlook and assumptions for the global economy and our businesses more specifically, including the ongoing COVID-19 pandemic. Those elements can and do frequently change. Please consider our comments in light of the risks and uncertainties surrounding those elements, including the risks we identify in our filings. In addition, Woodward is providing certain non-US GAAP financial measures. We direct your attention to the reconciliations of non-US GAAP financial measures, which are included in today's slide presentation and our earnings release and related schedules. We believe this additional financial information will help in understanding our results. Now turning to our results for the first quarter. Net sales for the first quarter of fiscal 2021 were $538 million compared to $720 million for the prior year quarter, a decrease of 25%. Net earnings and adjusted net earnings for the first quarter of 2021 were both $42 million or 64 cents per share. For the first quarter of fiscal 2020, net earnings were $53 million or 83 cents per share, and adjusted net earnings were $71 million or $1.10 per share. Net cash provided for operating activities for the first quarter of 2021 was $147 million compared to $27 million for the prior year quarter. For the first quarter of 2021, free cash flow and adjusted free cash flow were both $139 million. For the first quarter of 2020, Free cash flow was $10 million, and adjusted free cash flow was $29 million. Now I will turn the call over to Tom to comment further on our results, strategies, and markets.

Thank you, Don, and good afternoon, everyone. The negative impact of COVID-19 continues to weigh heavily on the world's economy, with resurgences and new viral variants contributing to significant uncertainty. While the first quarter of fiscal 21 showed signs of stabilization in many of our markets across the globe, we still anticipate quarterly volatility related to the pandemic. Importantly, we took swift action at the beginning of the pandemic to prioritize cash management in a lean operational structure. As a result of these actions, our balance sheet and cash flow have remained strong, and as we announced today, we have restored the first quarter dividend to the same level as the first quarter last year. We continue to closely monitor the situation and strategically adjust our business to align with customer expectations while maintaining our strong financial position and continuing to invest for the future. Moving to our markets, aerospace continue to be challenged with commercial OEM and aftermarket seeing the most substantial declines year over year. We're anticipating future improvements in passenger traffic with the rollout of vaccines across the globe. Additionally, the Boeing 737 MAX is returning to service in many key markets, with production rates expected to improve in 21. Defense OEM spending remains solid across fixed-wing and rotorcraft applications. However, we continue to anticipate a softening of guided weapons production volumes. Defense aftermarket activity remains strong due to improved improved U.S. fleet readiness initiatives, as well as global upgrade programs. Turning to our industrial market segments, in power generation, given the already depressed gas turbine market, low inventory levels, and pent-up demand for repair and overhaul, we do not expect this market to be as negatively impacted by the pandemic. Increased emissions regulations continue to drive the shift to natural gas-powered and cleaner-burning diesel engines. We also foresee continued growth in global energy demand moving forward, with the bulk of this expansion coming from Asia's developing economies. In transportation, China natural gas truck demand was strong, though we anticipate seasonal pressure due to high demand for natural gas during the winter months. The global marine market continues to be severely impacted by the pandemic. The oil and gas market remains weak globally due to low oil prices and lack of investment. although rig counts are showing some signs of improvement in recent weeks. In summary, our markets are stabilizing. We are beginning to see the payoff of our aggressive actions to address the challenges of COVID-19. We're consistently engaging with our business partners to assess near-term market demand and capitalize upon emerging opportunities. While we'll still see a significant amount of uncertainty and volatility in our markets, we do anticipate improvement as we progress through the fiscal year. We remain focused on operational excellence, delivering value to our shareholders, and positioning Woodward to capitalize upon future market opportunities as they emerge. Now I'd like to turn the call over to Bob to discuss our financials in detail.