Huntington Ingalls Industries, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the first quarter 2023 HII Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star 1 on your telephone keypad. Please be advised that today's conference call is being recorded. If you need further assistance, please press star 1. I would now like to hand the call over to Christy Thomas, Vice President of Investor Relations. Mrs. Thomas, you may begin.

Thank you, Operator, and good morning, everyone. Welcome to the HII First Quarter 2023 Earnings Conference Call. Joining me today on the call are Chris Kastner, our President and CEO, and Tom Steele, Executive Vice President and CFO. As a reminder, any forward-looking statements made today that are not historical fact are considered our company's estimates or expectations and are forward-looking statements made pursuant to the safe harbor provisions of federal securities law. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. For additional information regarding factors that could cause actual results to differ materially from expected results, refer to our SEC filings. Also in their remarks today, Chris and Tom will refer to certain non-GAAP measures. For reconciliations of these metrics to the comparable GAAP measures, please see the slides that accompany this webcast, which are available on the Investor Relations website at ir.hii.com. With that, I would like to turn the call over to our President and CEO, Chris Kastner. Chris?

Thanks, Christy. Good morning, everyone, and thank you for joining us on today's call. First quarter results reflect a good start to the year as we stay on course executing our nearly $50 billion of backlog and growing our mission technologies business in markets that support our customers. And I want to thank our 43,000 employees for continuing to deliver excellent products and services in support of national security. Our priority continues to be a focus on the fundamentals in shipbuilding, driving our shipbuilding schedules and delivering critically needed assets to the fleet. With that, we believe our milestones for 2023 and 2024 remain on track and consistent with our prior expectations. As we discussed last quarter, 2023 milestones include three ship launches and five ship deliveries, and the cadence of these is expected to pick up through the year, specifically in the third and fourth quarters. I will note that we are working closely with the Navy on a change to optimize the CVN-79 schedule, which pulls baseline work from the post-shakedown availability into the construction period in order to provide more capability at ship delivery. Ultimately, this change would allow for a more capable Kennedy to join the Navy's operational fleet, and once this contract change is finalized, we will adjust the crew move aboard and ship delivery dates accordingly. Now let's turn to our results on page three of the presentation. Top line growth was 3.8% from the first quarter of 2022, resulting in record first quarter revenue of $2.7 billion. Diluted earnings per share was $3.23 for the quarter, down from $3.50 in the first quarter of 2022. New contract awards during the quarter were approximately $2.6 billion, which results in backlog of approximately $47 billion at the end of the quarter, of which $26 billion is currently funded. In the first quarter at Ingalls, we were awarded a $1.3 billion detailed design and construction contract for amphibious transport dock LPD-32, continuing the serial production of this critical product line for the U.S. Navy and Marines. At Newport News, we were recently awarded the Columbia Bill 2 advanced procurement contract for $567 million. allowing Newport News to purchase major components and commodity material and to begin advanced construction on the next five submarines in the Columbia class. Finally, at Mission Technologies, we saw strong revenue and margin this quarter, with revenue growing 5.8% over the first quarter of 2022. Notably, this quarter, we were awarded the PRESS program, a base plus six one-year options, $1.3 billion task order, to provide personnel recovery, enterprise services and solutions for the U.S. Africa Command. Shifting to activities in Washington, the President submitted his fiscal year 2024 budget request in March, which is now under consideration by Congress. The proposed budget reflects continued investment in our shipbuilding programs, funding the second Columbia-class submarine, two Virginia-class attack submarines, and two Flight 3 Arleigh Burke-class destroyers. The budget request continues funding Ford-class nuclear aircraft carriers and aircraft carrier refueling and overhaul programs, as well as investment in the submarine industrial base. On the ship maintenance side, the budget request includes $600 million for the engineering overhaul of USS Boise. Funding is included for the final increment of LHA-9, but funding was not included for the LPD program or a third DDG 51 destroyer, although Congress provided advanced procurement for these programs last fiscal year. We will continue to work with Congress and our customers to support their requirements as we move through the budget process. Beyond shipbuilding, the fiscal year 2024 request reflects continued investments in capability enablers such as AI, cyber, and electronic warfare, C5ISR, and autonomous systems, which align well with the advanced technology capabilities of our Mission Technologies Division. Turning to labor, we successfully hired over 1,500 craftsmen and women in the first quarter, which is at 30% of our full year plan of approximately 5,000. This solid pace for hiring reflects continued recovery and stability in rebuilding our labor workforce post-COVID. While hiring is on a positive trajectory, we continue to remain focused on hiring, the training of our workforce, and our workforce development and retention programs. For example, in March, we celebrated the graduation of 200 apprentices from our Newport News Shipbuilding Apprentice School, strengthening our skilled workforce and leadership pipeline. Moving to an update on the health of our supply chain, where we are seeing stabilized lead times, we have not seen a return to pre-COVID levels. It is important We not only manage the risk this creates for our current programs, but also reflect these increased lead times in our future contracting activity. In summary, we've had a solid start to 2023, with record first quarter sales and continued long-term visibility, given our significant backlog as well as future award opportunities based on the strong defense budget. Seeing progress in labor and supply chain lead time stabilization is certainly positive, But we need to continue to manage these risks moving forward. We're maintaining our emphasis on fundamentals, driving productivity to ensure we meet our customer commitments. And now I will turn the call over to Tom for some remarks on our financial results. Tom?