Woodward, Inc.

Thank you for standing by. Welcome to the Woodward Incorporated first quarter fiscal year 2024 earnings call. At this time, I would like to inform you that this call is being recorded for broadcast 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 Chip Blankenship, Chairman and Chief Executive Officer, Bill Lacey, Chief Financial Officer, and Dan Proviznik, Director of Investor Relations. I would now like to turn the call over to Dan Proviznik.

Thank you, Operator. We'd like to welcome all of you to Woodward's first quarter fiscal year 2024 earnings call. In today's call, Chip will comment on our strategies and related markets. Bill will then 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 our website through February 12th, 2024. 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. Those elements can and do frequently change. Our forward-looking statements are subject to a number of risks and uncertainties surrounding those elements, including the risks we identify in our filings. These statements are made as of today, and we do not intend to update them except as required by law. 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, I will turn the call over to Jevin.

Thank you, Dan, and good afternoon, everyone. We delivered significant sales growth and margin expansion in the first quarter. The strong start to our fiscal year reflects our focus on operational excellence over the past 18 months, which enabled us to capitalize on continued strong end market demand. We increased output due to improvements in our production planning, supplier performance, and internal execution. We also achieved our commercial objectives, securing key long-term agreements that were available in the quarter for both industrial and aerospace segments. We made good progress consolidating industrial catalogs, which allowed us to clarify pricing with global channel partners and certain end customers, resulting in better control and visibility for action. Notably, net sales grew sequentially. which reveals successful implementation of our production system principle of consistent performance. Achieving and maintaining flow of supplier materials, production of parts in-house, and feeding assembly tests at the rate of customer demand is essential to hit customer and business targets. Quarter-end heroics are not welcome as they destroy flow and introduce inconsistency to every aspect of the production system. While we have not yet achieved the labor productivity we believe we're capable of, we are laying the foundation to achieve significant results. I want to thank all of the analysts and shareholders who attended our Investor Day last month. For those who participated, you will remember that we laid out our three interconnected value drivers, profitable growth, operational excellence, and innovation. Our Q1 results show how the relentless pursuit of operational excellence can deliver both growth and margin expansion. Woodward's profitable growth is fueled by robust demand in both aerospace and industrial end markets. We have made progress aligning price to the value of our products. we are still experiencing material cost inflation from our supply base. We forecast this to continue through calendar year 2024. Our price actions, as well as our supplier simplification and insourcing efforts, represent a two-pronged approach to mitigate some of the impacts of inflation. We are gaining momentum from our value stream transformation efforts, and I'm very pleased with the progress we've made so far. We're increasing the number of value streams under transformation, engaging more of the team in the process. Notably, a significant percentage of the Kaizen events associated with the transformations are being led by hourly members, which results in powerful and lasting talent development. We are expanding our automation project funnel with goals to improve quality and reduce future labor demand. We are putting our plans into action, and you can see this in our guide for capital expenditures. We look forward to sharing more with you in the coming quarters. Our purpose is to design and deliver energy control solutions our partners count on to power a clean future. In both segments, we're working closely with our customers to develop new technologies that reduce fuel consumption and emissions and enable multiple paths for a cleaner future. I recently spent a day in Zeeland, Michigan, at one of our aerospace sites. And this visit was focused on both GTF fuel nozzle repair and overhaul rate readiness, as well as a deep dive into our ignition systems and combustion control product development process. Our ignition systems development is maturing in preparation for the next single aisle aircraft, but it is ready now for applications that need the efficiency and reliability improvements it has to offer. This team has a great track record with automation, and it is a key driver to GTF fuel nozzle overhaul capacity expansion, which may be needed sooner than expected. While we did share our refreshed purpose and values on Investor Day, we recently rolled it out to our nearly 9,000 members around the world. It has been gratifying to see their reactions and the pride they have in Woodward. After all, their aligned efforts enabled the performance improvements we delivered this quarter. The excitement is tangible. Our purpose video is on our website, and I encourage you to take a look. It is an honor to lead the next chapter of Woodward, building on the legacy set before us. Our entire leadership team is excited about our future and prepared for the challenge. Moving to our markets. In aerospace, commercial airline domestic and international passenger traffic now exceeds 2019 levels, resulting in high aircraft utilization rates. Further increases in aircraft utilization are expected as international passenger traffic in Asia Pacific still lags, yet offers opportunity as it recovers. Transatlantic traffic remains strong. In defense, geopolitical developments and government spending proposals indicate potential increased procurement and R&D spend, signaling potential opportunities for Woodward. In industrial, demand for power generation remains strong, driven by growth in Asia and the Middle East. Global aftermarket activity remains high, as does demand for backup power. In transportation, the global marine market remains healthy, with elevated ship build rates driving OEM engine demand and high utilization rates driving current and future aftermarket activity. Demand for alternative fuels across the marine industry continues to increase. We are encouraged by the additional OEM and aftermarket opportunities, as multi-fuel engines contain greater woodward contents. Demand for natural gas heavy duty trucks in China increased significantly compared to last year. This current demand is being driven by a number of factors, including a favorable LNG to diesel price spread, a steady supply of natural gas, and carbon reduction initiatives across China. This market remains volatile, and we continue to evaluate the durability of this demand. Last week, I would have said LNG infrastructure development continues to benefit from global investment, but some uncertainty has been injected into the investment equation with the recent US government pause of further LNG export approvals. In summary, market signals indicate continued strong demand. The operational improvements we've made position us to capitalize on this demand. We remain focused on pursuing profitable growth, operational excellence, and innovating for the future to deliver on our purpose and drive enhanced shareholder value. I'll now turn it over to Bill to share our financial results.