Curtiss-Wright Corporation

Thank you for standing by, and welcome to the Curtis Wright Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to introduce Senior Director, Investor Relations, Jim Wright.

Thank you, Andrew, and good morning, everyone. Welcome to Curtis Wright's second quarter 2021 earnings conference call. Joining me on the call today are President and Chief Executive Officer Lynn Bamford and Vice President and Chief Financial Officer Chris Parks. Our call today is being webcast, and the press release, as well as a copy of today's financial presentation, is available for download through the investor relations section of our company website at www.curtiswright.com. A replay of this webcast also can be found on the website. Please note, today's discussion will include certain projections and statements that are forward-looking, as defined in the Private Securities Litigation and Reform Act of 1995. These statements are based on management's current expectations and are not guarantees of future performance. We detail those risks and uncertainties associated with our forward-looking statements in our public filings at the SEC. As a reminder, the company's results include an adjusted, non-gap view that excludes certain costs in order to provide greater transparency into Curtis Wright's ongoing operating and financial performance. Also note that both our adjusted results and full-year guidance exclude our bill-to-print actuation product line that supported the 737 MAX program, as well as our German valves business, which was classified as held for sale in the fourth quarter. Gap to non-gap reconciliations for current and prior year periods are available in the earnings release at the end of this presentation and on our website. Any references to organic growth exclude the effects of restructuring, foreign currency translation, acquisitions, and divestitures unless otherwise noted. Now I would like to turn the call over to Lynn to get things started. Lynn?

Thank you, Jim, and good morning, everyone. I'll begin with the key highlights of our second quarter performance and an overview of our full year 2021 outlook. Then I'll turn the call over to Chris to provide a more detailed review of our financial results and updates to our full year guidance. Finally, I'll wrap up our prepared remarks before we move to Q&A. Starting with the second quarter highlights, overall we experienced a strong 14% increase in sales. Our aerospace and defense markets improved 11%, while sales to our commercial markets increased 21% year over year. Diving deeper within our markets, we experienced double-digit sequential improvements in sales within our commercial aerospace, power and process, and general industrial markets. These markets were among the hardest hit by the pandemic last year, and we are encouraged by their improving conditions. Looking at our profitability, adjusted operating income improved 24% while adjusted operating margins increased 120 basis points to 15.6%. This performance reflects strong margin improvement in both the aerospace and industrial and the naval and power segments based upon higher sales as well as the benefits of our operational excellence initiatives. It's important to note that this strong performance was achieved while we continued to invest strategically with a $5 million incremental investment in research and development as compared to the prior year. Based on our solid operational performance, adjusted diluted EPS was $1.56 in the second quarter, which was slightly above our expectations. This reflects a strong 22% year-over-year growth rate despite higher interest expense and a slightly higher tax rate which were generally offset by the benefits of our consistent share repurchase activity. Turning to our second quarter orders, we achieved 11% growth and generated a strong 1.1 times book to bill overall as orders exceeded one time sales within each of our three segments. Of note, our results reflect strong commercial market orders which surged 50% year over year and included a record quarter of order activity for our industrial vehicle products covering both on and off highway markets. Within our aerospace and defense markets, book to bill was 1.15. This included $130 million in naval awards for aircraft carrier and submarine platforms, which we announced in an earlier press release, and we are also expecting a strong second half in orders. next to our full year 2021 adjusted guidance where we raised our sales operating income margin and diluted earnings per share our updated guidance reflects an improved outlook in our industrial markets some additional planned r d investments to support our top line growth and an increase to the full year tax rate chris will take you through the detail in the upcoming slides but in summary We are well positioned to deliver strong results in 2021. Now I'd like to turn the call over to Chris to provide a more thorough review of our second quarter performance and our improved outlook for 2021. Chris?