Woodward, Inc.

Thank you for standing by. Welcome to the Woodward, Inc. First Quarter Fiscal Year 2022 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 are 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. Mark Hartman, Chief Financial Officer, and Mr. Dan Provaznik, Director of Investor Relations. I would now like to turn the call over to Mr. Provaznik.

Thank you, Operator. We'd like to welcome all of you to Woodward's first quarter fiscal year 2022 earnings call. In today's call, Tom will comment on our markets and related strategies, and Mark will discuss our financial results as outlined in our earnings release. At the end of the 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 14th, 2022. 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 cautionary 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 expected and potential effects of the ongoing COVID-19 pandemic. Those elements can and frequently change, 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-U.S. GAAP financial measures. We direct your attention to the reconciliations of the non-U.S. financial GAAP 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. Turning to our results for the first quarter. Net sales for the first quarter of fiscal 2022 were $542 million, compared to $538 million for the prior year quarter, an increase of 1%. Net earnings were $30 million, or 47 cents per share, compared to $42 million, or $0.64 per share. Adjusted net earnings for the first quarter of fiscal 2022 were $36 million, or $0.56 per share. Adjustments to earnings for the quarter included costs related to business development activities and a charge related to a non-recurring matter unrelated to the ongoing operations of the business. There were no adjustments to earnings in the prior fiscal year first quarter. Net cash provided by operating activities for the first quarter of fiscal 2022 was $39 million compared to $147 million for the prior year. Free cash flow for the first quarter of fiscal 2022 was $26 million compared to $139 million for the prior year. Adjusted free cash flow was $27 million. Now I'll turn the call over to Tom to comment further on our results, strategies, and markets.

Thank you, Dan. Good afternoon, everyone. We continue to see positive signs of recovery across the business despite market volatility. Ongoing COVID-19-related disruptions, including global supply chain challenges, labor shortages, and customer-initiated shipment delays permeated the industry and impacted our revenue in the quarter. Although we expect and uneven market recovery throughout 2022, Woodward's proven resiliency underscores our confidence in our continuing recovery and ability to deliver a solid year. Moving to our markets, the commercial aerospace market continues to improve. We're pleased to see the 737 MAX recertification in China and expect overall build rates continue to ramp slowly throughout the year. Commercial aftermarket recovery is being fueled by rising passenger traffic and utilization of commercial aircraft fleets that include significantly higher Woodward content. U.S. domestic passenger traffic is nearly at pre-COVID levels, while international travel continues to improve primarily as a result of the easing of travel restrictions between the U.S. and Europe in November. Overall, defense markets remain stable. But as expected, demand for guided weapons is down and is anticipated to remain at lower levels for the foreseeable future. Turning to our industrial market, in power generation, demand for gas turbines remains strong, driven primarily by growth in Asia and the replacement of coal-powered plants. Aftermarket activity has been increasing, and we continue to see strong demand for backup power for data centers. In transportation, The global marine market continues to see increasing orders for new ships and hydro utilization driven primarily by a robust freight market, which will drive future aftermarket activity. Demand for China natural gas trucks remains challenging, even though global natural gas prices have trended downward after peaking late last calendar year. The oil and gas market has improved, with pricing above pre-2020 levels driving increased levels of capital spending. In summary, while we see a significant amount of uncertainty in our markets, we anticipate improvements as we progress through the fiscal year and we remain confident in our ability to deliver on our previously stated 2022 outlook. As a reminder, for the full fiscal year 22, we expect further recovery and improved profitability in our aerospace business as OEM build rates increase and passenger traffic recovers despite the headwinds from softened guided weapon sales. In our industrial business, we anticipate increased demand for industrial gas turbines and related services, continued improvement in marine markets, and stabilization of oil and gas prices, all of which should drive customer investment in this segment. We will continue to navigate the challenges of this market recovery with a focus on operational excellence, delivering value to our shareholders and customers, and positioning Woodward to capitalize on future market opportunities. Now I'll turn the call over to Mark to discuss the financials in detail.