Curtiss-Wright Corporation

Welcome to the Curtis Wright Fourth Quarter and Full Year 2024 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode, and the floor will be open to 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 queue by pressing star 2. In the interest of time, we ask that you please limit yourself to one primary question and one follow-up. Lastly, if you should require operator assistance, please press star zero. I would like to turn the call over to Mr. Jim Ryan, Vice President of Investor Relations.

Thank you, Shana, and good morning, everyone. Welcome to Curtis Wright's fourth quarter and full year 2024 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 Barker. Recall today's 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 curtiswright.com. Also, a replay of this webcast will be available 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 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 our forward-looking statements in our public filings with 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 into Curtis-Rick's ongoing operating and financial performance. Any references to organic growth are on an adjusted basis and exclude foreign currency translation, acquisitions, divestitures, and restructuring unless otherwise noted. GAAP and non-GAAP reconciliations for current and prior year periods are available in the earnings release and on our website. And I'd like to turn the call over to Lynn to get things started.

Thank you, Jim, and good morning, everyone. 2024 was an exciting year for Curtis Wright, and I want to begin by thanking our nearly 9,000 employees for their contributions to our success. We executed on our growth strategy and continued to invest in some of our most critical areas, including talent, systems, and research and development, while we achieved record financial results for our shareholders. We are clearly building momentum, and I'm pleased with the team's execution and the steady progress we made this past year in pursuit of our three-year Investor Day objectives unveiled this past May. With that, I'll turn to today's presentation. I'll begin by covering the highlights of our fourth quarter and full year 2024 performance. Then I'll provide a brief update on our capital allocation and a preview of our 2025 financial outlook, before turning the call over to Chris to provide a more in-depth review of our financials. Finally, I'll wrap up with some closing remarks about our long-term prospects before we move to Q&A. Starting with our fourth quarter 2024 highlights, sales increased 5% year-over-year due to a better-than-expected performance in both our defense electronics and naval and power segments. Operating income was essentially flat, while operating margin was strong at 19.8%. As a reminder, our various restructuring actions, some of which were undertaken to reshape our global footprint, generated a few million dollars of initial savings in 2024 and provided a modest benefit to our results. Diluted earnings per share increased 3% year over year, which also exceeded our expectations and was primarily driven by higher A&D sales. Free cash flow was strong at $278 million, reflecting a 223% conversion rate due to improved operational performance and lower working capital. Growth in our order book was exceptionally strong in the fourth quarter of 37% year-over-year, reflecting a 1.1 times book-to-bill. These results were driven by growth in all of our A&D markets and continued solid demand within commercial nuclear. Next, I'll highlight our full-year 2024 results, which included a number of financial records. We generated double-digit growth in sales and operating income in 2024, reflecting the underlying demand within our core portfolio and another record year of orders. We delivered modest margin expansion while maintaining our firm commitment to grow R&D faster than sales. Diluted earnings per share of $10.90 increased 16% year over year. Adjusted pre-cash flow reached a record $483 million and reflected strong conversion of 116%. Of note, our results included $16 million of incremental capital expenditures supporting growth investments across all three segments. Turning to our order book, demand was exceptional, reflecting a 20% year-over-year increase, reaching a new record of $3.7 billion and a 1.2 times book-to-bill overall. Leading the way was our naval and power segment, which benefited from strong demand for naval nuclear propulsion equipment supporting the U.S. Navy's most critical platforms. At the same time, higher demand for embedded computing and tactical communications equipment in the ground and aerospace defense markets drove great results in our defense electronic segments, where orders crossed $1 billion for the first time. Total Curtiss-Wrights backlog was up 20% in 2024, reaching a record of more than $3.4 billion, providing additional confidence in our long-term growth outlook. Turning to slide four, we begin with some comments about our acquisitions and share repurchase activity. we added two new businesses in 2024 to further expand our commercial nuclear portfolio in june we added wsc a leading supplier of power plant control room simulation technology and in on december 31st we closed on the acquisition of ultra energy which is a leading provider of reactor protection systems radiation and flux monitoring systems and specialized temperature and pressure sensors As a reminder, Altra provides safety-critical products and services to commercial nuclear and power generation plants globally, and also supports defense markets, including the UK nuclear submarine fleet, as well as various aerospace applications. This acquisition not only enables us to leverage our UK-based nuclear manufacturing footprint, but it also expands our presence with leading global SMR designers. I'm pleased to welcome all of our new colleagues to Curtiss-Wright. As we integrate these new acquisitions, our teams are already collaborating with customers to increase our opportunities for growth as we further expand the scope of Curtiss-Wright's capabilities. In 2024, we also utilized our strong balance sheet and financial position to accelerate our share repurchase activity. In the month of December alone, we bought back $100 million in stock through an accelerated repurchase plan, boosting our full-year repurchase activity to $250 million. This past year, we also increased our dividend for the eighth consecutive year. Now I would like to introduce our full-year 2025 guidance. Overall, we are projecting mid-single-digit organic sales growth driven by increases in nearly all of our end markets and total growth of 7% to 8%, including acquisitions. Operating income growth is once again anticipated to exceed our sales growth, reflecting 40 to 60 basis points in operating margin expansion this year to 18% at the midpoint of the range. At the heart of our drive for operational excellence is the operational growth platform, which fuels our pivot to growth strategy by driving continued opportunities for margin expansion and savings across the portfolio. In addition, we'll continue to deploy new tools and systems to optimize our manufacturing operations and drive connectivity throughout the organization. This, in turn, will allow us to maintain incremental investments in research and development to drive organic growth, which we've successfully delivered over the past few years and anticipate ramping up yet again in 2025. It also provides an opportunity to overcome dilution from acquisitions, such as Ultra Energy, as we integrate this business into our broader operations and seek opportunities to drive future margin accretion. These efforts, backed by our strong top-line growth, provide us with confidence to once again generate double-digit growth in diluted EPS along with strong free cash flow. In summary, Curtis Wright remains well-positioned to deliver an outstanding performance in 2025. Now I would like to turn the call over to Chris to continue with our prepared remarks.