Curtiss-Wright Corporation

Welcome to the Curtis Wright Second Quarter 2023 Earnings Conference Call. At this time, all participants have been placed on the listen-only mode, and the floor will be open for your questions following the presentation. If you would like to ask a question at that time, please press star 1 on your telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. So others can hear your questions clearly, we ask that you pick up your handset for best sound quality. Lastly, if you should require operator assistance, please press star zero. I would now like to turn the call over to Jim Ryan, Vice President of Investor Relations. Please go ahead, sir.

Thank you, Carrie, and good morning, everyone. Welcome to Curtis Strike's second quarter 2023 earnings conference call. Joining me on the call today are Chair and Chief Executive Officer Lynn Bamford and Vice President and Chief Financial Officer Chris Park. Our call today's theme 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.perksright.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 guaranteed to future performance. We detail those risks and uncertainties associated with those forward-looking statements in our public violence of the SEC. As a reminder, the company's results include an adjusted non-GAAP view that excludes certain costs in order to provide greater transparency in the Curtis Wright's ongoing operating and financial performance. Any references to organic growth are on an adjusted basis and exclude foreign currency translation, acquisitions, and divestitures unless otherwise noted. GAAP and non-GAAP reconciliations for current and prior year periods are available in the earnings release and on our website. I would like to turn the call over to Lynn to get things started.

Thank you, Jim, and good morning, everyone. I will begin by covering the highlights of our second quarter 2023 performance and a brief update on our full-year financial outlook. Then I'll turn the call over to Chris to provide a more in-depth review of our financial results and updates to our 2023 guidance. Finally, I'll wrap up our prepared remarks before we move to Q&A. Starting with our second quarter 2023 highlights, sales increased 16% overall to $704 million and improved 12% organically. Our results reflected the strength of our combined portfolio as we delivered higher year-over-year sales growth in all our end markets. Underscored within this performance in aerospace and defense, we demonstrated strong 23% growth. This was principally driven by the easing of defense electronic supply chain conditions, including improvements in lead time and component availability and strong conversion on our backlog. We also achieved 20% growth in commercial aerospace as we continued to benefit from strong OEM demand. Growth in operating income increased 18% year-over-year and exceeded our strong sales growth. This performance reflected favorable absorption on higher revenues in all three segments, and we were able to generate 30 basis points in overall operating margin expansion in the quarter, despite some unfavorable myths. Diluted earnings per share of $2.15 increased 18% year-over-year and exceeded our expectations, primarily due to higher A&D sales. Adjusted free cash flow was also strong at $99 million in the quarter, generating nearly 120% in free cash flow conversion. We continue to experience very strong demand across our A&D end markets and for commercial nuclear products that support maintenance, modernization, and plant life extensions. As a result, our order book continues to grow at a rapid pace, with new orders up 8% year over year. This provides great visibility and bodes well for our expectations in the second half of 2023 and our long-term outlook. Overall, Book to Build was 1.2 times in the second quarter, building upon our already strong backlog, which is now up 9% year-to-date and in excess of $2.8 billion. Next, some highlights of our full-year 2023 guidance. Our strong first half results combined with solid trends across our markets and expectations for continued easing of the defense electronic supply chain gives us confidence to raise our outlook for sales, operating income, and diluted earnings per share. As we'll discuss this morning, our updated guidance reflects increased sales and operating income in all three segments, mainly driven by increased profitability in the defense electronic segment. Overall, we increased our full-year sales growth to a new range of 7% to 9%, along with 8% to 11% growth in operating income. And we continue to maintain strong profitability with 10 to 30 basis points of year-over-year margin improvement. This puts us on track to deliver double-digit growth in diluted EPS this year. In addition, we increased the bottom end of our already strong free cash flow guidance to reflect higher confidence in the full year outlook. In summary, we are well positioned to deliver strong results in 2023. Now, I would like to turn the call over to Chris to continue with our prepared remarks.