Okay, great. We're gonna go ahead and get started. Thanks so much for joining us. Next up, we have Curtiss-Wright, and from the company, we've got Lynn Bamford, and we've got Chris Farkas. Thank you so much for joining us. We're gonna go through some fireside chat questions, but as usual, any questions from the audience are always welcome to make it more engaging as a participation. I would love to start off, Lynn, maybe with the defense side of the portfolio and the supply chain, which defense electronics in particular has been probably most impacted. Give us a status update of where that is, how it's recovering relative to your expectations, and also, when would this not be a topic I will have to ask? I have to say, very much appreciate that. Thank you for being here today. It's definitely our pleasure. Welcome to everybody who's here. I think before we start, I would just like to make comment that our safe harbor statement applies. Today's discussion may include some forward-looking statements which contain risks and uncertainties, which are covered in our SEC filing, which are on our website. Just to get that out of the way. Now, onto your question, which is on defense electronics. Yes, it is. You know, when this began in 2021, I didn't think we'd be sitting here in 2023 and still talking about it. I would say, you know, as we talked about on our Q1 earnings call and have been talking about for a year, you know, there's a lot of things we monitor in this area. We monitor the on-time delivery of our suppliers, their decommits, we track lead times and what direction they're going, and our ability to pull in and push out. From a quantitative standpoint, we've definitely saw the trends beginning to improve in Q1. That's improving into Q2, so we feel very positive about that. More on a qualitative position that as we just have continuous engagements with our supply base, their willingness in leaning forward on working with us in adjusting delivery dates to meet our needs has definitely taken a meaningful change in the right direction. we do feel positive about the direction and the continued improvement in the supply chain. Lead times are still definitely longer than they were. Mm-hmm. They're maybe halfway back from what would've been the norm in 2019 to kind of the worst case, and that's obviously a generality, but kind of broadly speaking, and so we'll see. I don't know when they'll be back to the 2019 levels or if we'll get all the way back there in the foreseeable future, but, you know, I'm really proud of how we've managed it as a team. New systems, we've put in place new tools that leverage some AI to help us really manage our supply chain, that have, you know, gotten us to a place where we feel pretty comfortable how we're managing the situation. Still some uncertainties. I'm not trying to paint. Yeah ... you know, an over rosy picture, but very different than six, nine months ago. Okay. You know, with that, just to, you know, comment on Q1 and, you know, some of those uncertainties. You know, our revenue was up in Q1, you know, 13% year-over-year, and yet our margins were down, and I know that's, you know, caused a few people to have some, you know, questions. I guess, you know, to comment on that, you know, it was coming off of Q4, where we were almost 30% operating margin. There's really nothing fundamental going on in this business that's, just truly mix and a couple under absorptions and a few teams that drove that. You know, when I look, you know, into the next quarter and into the full year, you know, we gave, you know, slightly wider than normal guidance at the beginning of the year to account for the uncertainty in the supply chain. Our order book has remained strong. Our staffing levels are good, that we, you know, we really feel like, you know, we can see line of sight to driving, you know, towards the top end of that full-year guidance. Mm ... at this juncture. You know, equally important, you know, really have a solid line of sight on the operating margins and getting to that 22.7%-22.9% guide that we put out in the year. You know, the business is healthy. There's nothing systemic. We have no program issues going on, just, you know, really a mix issue coming off of such a profitable Q4. Okay. It also sounded like, last year you had a much steeper ramp into Q4 margin, needing to get to that near 30%. Yes to pull off the year. Is that something that is also the frame of reference for this year, or are you gonna be able to sort of have a bit of a smoother cadence through the course of the year of improvement? A smoother cadence. You know, historically, this business has always been slightly more heavily weighted in the back half than the first half. I think we're going to get back to that more traditional cadence, and so less dramatic as was in 2022. We're doing a lot of work to really try and drive that. I think we're going to see really solid sequential improvements quarter-over-quarter going through the, you know, the back half of this year. Got it. maybe sticking with you, Lynn, on the 2023 targets, Investor Day, put them out there... Mm-hmm ... and sort of coming up on that. Maybe talk about the upsides, opportunity for any of those targets or risks for those targets, just conceptually beyond what you've laid out, when would your plan be to sort of set new-? New goals. ... new further goals? First, I'd like to say that we feel really solid on the Pivot to Growth strategy that we put forward in 2021 as really being the right thing for the company, for, you know, where Curtiss-Wright had evolved to over the years with driving, you know, really efficiencies in the organization and getting it to that top quartile financial performer, that it was time to put management attention units on growth. I think that is a solid position for us that will continue going forward. To speak more specifically about the 2021 targets, We have line of a sight to achieve all of the targets. I think four are much more squarely within our wheelhouse. I'll talk about the one that doesn't qualify as that last, you know, we're on track to hit our revenue targets. You know, achieving overall 5% growth, with 3% coming, approximately 3% coming from organic growth. You know, feel good about having, you know, driven that. Drove, you know, our operating margin expansion 8% compared to that 5%. You know, so continuing to deliver that strong operating margin performance and keeping us as a top quartile performing, operating margin company. We, you know, are, you know, on track to clearly deliver our 10% or greater EPS. Mm-hmm accretion year-over-year. Feel good about that. If I take the center of our free cash guide, that puts us at a three-year average of 108% for free cash flow conversion. We put out a target of 110. If we were able to reach the top of our guide, we could get to that 110 mark, but that's the one that's probably got the most challenge in it at this point. Clearly didn't see the supply chain, you know, level of disruption that's, you know, really driven some inventory levels that's making that. The team is focused on it. We're working towards it and doing everything we can to say we hit a full slate of achievement on those targets. Okay. For, to the other half of your question, towards another target, you know, I, as I opened, we will stay focused on growing this business. It's the right time. We're in the right end markets. We have the right technology, so it's the time to set that stage for future growth by, you know, investing in ourselves and doing those things to capture business. Not really having, you know, ready to speak to future targets yet, but we're looking towards a May of next year to have another investor day and talk about some of the really great things in the business and lay out new targets. Okay. Maybe to dig a little bit on that, without going to a target, but your underlying incremental margin structure, your underlying cash flow conversion structure, your cash flow conversion seems like it sits above your net income just because of the D&A versus CapEx. As long as working capital doesn't get too much in the way, any reason to not think you'll continue to be nicely above net income conversion of free cash flow? Conversely, on the incremental margin side, Yeah, we've got a strong track record of being above 100% conversion, and we intend to kind of keep it that way. I think we've got opportunity going forward to more closely align our cash flow and our cash flow growth cadence with our sales growth. I mean, it's not always that easy to control with where we sit in the market, but I think there's opportunities just from a growth perspective and then also a working capital management perspective. If you back up to 2020, I think we're at a low of 19, almost, you know, 99, you know, percentage of working capital, percentage of sales, and we're at 26.5%. We clearly see that there's opportunity. This year, we're targeting 200 basis points of reduction. Mm-hmm ... and we'll continue to drive those systemic improvements to get back to that point. You know, on the incremental, from an incremental margin standpoint, you know, we'll continue to drive our Commercial Excellence programs and our Operational Excellence programs to free up that money for reinvestment and provide operating margin expansion going forward. We don't have a commitment as to what that will be, but, you know, outside of whether it's mix issues or increased R&D investment, you know, 25%-30%, you know, incremental contribution margins- Okay probably the way to think about that. Okay. One of the reasons why your working capital percent, if I'm, if I'm following your logic, was lower, was because of advances coming off the nuclear side that had since burned off over the last several years. Not to leap ahead, presumption is that you will actually get new orders from a nuclear perspective. Will those come with sizable advances similar to what you've seen in the past, or will that be more of a neutral to a working capital dynamic? I think that that's our objective. I think, you know, we've been asked about pricing on the next AP1000 order. We're using the last order as a baseline. Mm-hmm ... to say this is what we would expect. I think it's reasonable to think that we'll be getting cash in advance of a lot of that work that we'll be performing. Okay. Okay. It, maybe the switch to once you get the cash, you're gonna deploy it, capital allocation preferences, where is the pipeline of M&A that you're looking at today, sort of end market preference, pricing, and things like that? Yeah, it's definitely an important topic to us, and one that, you know, we've talked about, you know, of the uses of capital. Acquisitions is our top priority for where, you know, we want to deploy our capital, again, you know, in a very disciplined and balanced manner that, you know, really assures that we drive that strategic fit and the financial fit for the corporation overall. You know, we like niche IP, you know, high IP capability bolt-ons. ESCO is a great example of that, and they are doing really, you know, quite outstanding as an addition to our portfolio. We clearly will look and make, you know, initial indications of interest on definitely double-digit numbers of properties, usually before we find one that we want to take across the finish line. We're not going to change that rigor. I mean, we're very conscious of the cost of capital having increased. That makes, you know, the analysis and what you can see as a, as that good financial fit, you know, a bit more challenging, but it doesn't mean, you know, we're stepping away from our commitment to driving, acquisitions. You know, we've been asked, you know, "Are you limiting yourself to the bolt-on types of acquisitions?" You know, we will look at a pretty wide range of the size of the deals, and maybe I'll toss it to Chris to talk about our capacity at this point. Oh, yeah. I mean, we're pretty proud of our balance sheet. I think, you know, we've, you know, we consider ourselves investment, you know, grade, rated debt, we've been getting pricing in that, you know, BBB+ type range. We took some steps this last year to get ahead of what's happening here in the interest rate environment. We upsized our revolver. We got $300 million in notes, all at very attractive pricing. Today, we're probably around 2.1x debt to EBITDA. We've got about $1.7 billion of capacity. We certainly have the flexibility to support, you know, going after something, you know, on the acquisition side of things, that is our top priority. We also believe, as part of our capital allocation strategy, you know, that returning capital to shareholders is very important, and we believe that share buyback is the most effective way to do that. I think if you look at what we've done over the past three years, $600 million of share buyback over the last three years, and we bought back that stock at about $119 on average. It's been a pretty good program so far. We talk often about this. We have been assertive. We believe that as the opportunity presents itself going forward, we will continue to be assertive. Yeah, we haven't been as bullish, I would say, on the dividend, but we do believe that a modest approach to the dividend and dividend increases is the best way, for us to approach that, and we'll continue to grow our dividend in alignment with our sales growth in the upcoming years. Mm-hmm. you know, as we've done for the past three. Okay. I know at the investor day, you know, you targeted quantum $300 million-$400 million a year of deal size, transactions, and it certainly hasn't matured that way, just the deals haven't gone that way. Mm-hmm. Is the pipeline, as you'd qualify it today, better, worse, the same as the last couple of years? I would say it's definitely better today, and pretty recently than it has been, you know, really since, you know, bringing ESCO across the line. We obviously bought a small surface treatment business. Don't want to disregard it, but not, you know, very significant financially, immediately. We'll grow it over time. And we looked at a lot of deals that were pretty quickly dismissed from a financial standpoint. A lot of, you know, I would say, lower quality businesses that just operated at very different profitability and cash generation points, that the journey would have been too hard. Mm-hmm. to bring them into Curtiss-Wright. I'd say over the past couple of months, I don't know if people were holding off, thinking maybe interest rates would go back down, and now people are accepting this is gonna be here for a while, and so if you have a property you want to sell, it's just time to sell it. Mm-hmm. Some much higher quality targets have come available, and we've got a couple of things that, you know, we're in early stages with that could be really strong additions to Curtiss-Wright. I feel, you know, it's really nice to see that, you know, have some properties that, you know, if things progress, we would absolutely bring them in, and they would become a strong contributor within the company. In that size range or even larger than the size range? Mostly in that size range. Okay. I know of a couple of things that are going to be coming to market, you know, either later this year or early 2024, that would be larger. Okay. Got it. Maybe shifting to defense. Got the debt ceiling, which is sort of right in front of us. Mm-hmm. As it relates to your expectations for budgetary outcomes, but more importantly, what you have in the backlog, what you're seeing in the order pipeline from prior budgets, what is the growth rate that you're thinking about for the next couple of years within your defense portfolio? We feel very optimistic about our defense business and feel confident we will be able to grow it, even if there is some tumultuousness. You know, that, obviously, 2023, I'm sure everyone's aware, you know, was a really significant 10% increase in the defense budget. You know, 13% of that was in the investment accounts, which is RDT&E and procurement, which is really where we drive the business that Curtiss-Wright delivers on. You know, in good growth across, you know, all three branches of the military. You know, very solid baseline for us to have and, you know, very well aligned with our technologies. You know, the C5ISR capabilities, you know, continue to be spattered throughout the Air Force, you know, really all three branches. You know, very strong support for Naval ship buildings, 11 ships with, you know, continued support for Columbia and an additional DDG-51. A very good, strong base. Obviously, the President's put forward his FY 24 budget. A lower increase, but coming off of that big increase, I think general wisdom is it'll probably increase a bit as it goes through markups. You know, even within the budget he put forward, and again, in those investments accounts, there's roughly 5% increase in both Naval and aerospace. Again, really strong business there. Within the Army, you know, the areas that are important to Curtiss-Wright still have very strong support and are in early days. You mentioned our backlog. You know, we do feel that, you know, the really strong order book we had last year, we're out to a great start this year. You know, that backlog will give us some protection, you know, for sure. You know, that doesn't carry on forever, but, you know, if we fall into a CR, and it's at 2023 levels, that's a pretty healthy level of spending and spending in places where we want. Because, you know, it's not just spending's capped, but you can't move money around and reprogram it. You know, with good line of sight of where the 2023 money is spent. Not to say, you know, it won't impact us. You know, we talked in 2022 that, you know, when the CR went on for 180 days, you know, we did feel the effect, you know, with the RD, R&D target portion of that, you know, where we do derive a reasonable amount of business got frozen. Not no impact, but I think we're pretty well-weathered to grow the storm. You know, we're not all U.S.-based. You know, we have a pretty good international footprint. You know, the NATO has been, you know, slowly moving towards spending the incremental amounts they've been talking about. That, where they will spend that money, will either come to the U.S. to buy existing systems where we have, you know, pretty broad coverage, or to do build-out capabilities in Europe. you know, largely, you know, thinking is, you know, much of that will be ground vehicles, where we have a very strong presence in Europe on ground vehicles and international shipbuilding. you know, there's other pockets that we can really emphasize for growth that, you know, are not just tied to the U.S. DOD. Yeah, just to put some numbers around that, I mean, 8% of our business today is what we would call foreign direct military spending. We're selling directly to the foreign prime or directly to the foreign customer. That doesn't include the strong content that we have on many other programs, like the F-35 or Blackhawks or Seahawks or C-130Js that, you know, are sold to the primes and then go international. As we're looking at that and we see the spending increase in going forward, we see that as an opportunity. We don't think it's really started to take a strong hold yet, but maybe more towards the end of the year and into 2024, you'll start to see some of that uplift. You know, for the announcements that have taken place to date, whether it's F-35, F-15, F-16, C-130Js, you know, all of these, the, you know, Pumas, the various platforms, we're on all of these. We're really positioned well, I think, to benefit from that increase in international spending as well. Okay. Any questions, feel free to raise your hand, I'll try and call on you. There was a question that sort of came to me and someone asked me about, was your pricing within the portfolio, and obviously, you're working on highly engineered parts across the portfolio, commercial defense. What has been your success rate in terms of passing on price net of inflation? Is there a strategy? You know, is this a good environment or a bad environment for sort of pricing in your products? Maybe I'll kick this one off and then let you, Chris. Sure ... talk to some of the numbers- Yeah specifically. When I became CEO, one of the early initiatives I put into place, really before we saw, you know, how dramatic the inflationary pressures was gonna be, was a Commercial Excellence program to really consider how we took contracts within Curtiss-Wright, build in escalation clauses, the length of long-term agreements we would sign up from that whole process. It was fortuitous, lucky, call it what you will, but we got the ball rolling early on with really training ourselves as an organization to take the best practices that existed, you know, in industry, but, and within pockets of Curtiss-Wright, and implement those, you know, across the teams. This has been an ongoing journey that continues to the day. You know, we rolled up our sleeves, we've tackled, you know, long-term agreements that were you know, had many, many years left in them that were not in favorable positions for Curtiss-Wright, and worked with our customer base to convince them that they needed to work with us as a supplier. We are committed to being a quality supplier that services our customers, but that means sometimes they have to work with us. I'm really proud of the work the team has done across the board to really, you know, systematically go across our businesses and, you know, and address those things. Maybe, Chris, I'll have you talk through some of the numbers. Sure. Yeah. I think, you know, as we look at the margin expansion this year that we have for Curtiss-Wright, it's 10 to 30 basis points. That includes, you know, roughly $7 million of incremental IR&D investments. Beyond that, we've got a lot of development contracts that are taking place. We recently had that press release regarding the subsea pump contract that we won, that's gonna, you know, be a temporary margin drain. Overall, our margins are up on the full year. I would say this, with the successes that we're having, the greatest successes we're seeing within the Aerospace & Industrial segment. As you look maybe across the full portfolio, I would say 10 basis points of the 30 this year is gonna come back through pricing and just being able to stay ahead of inflation. Okay. This is a good transition into the industrial business. Your sales growth in Q1 is actually above your full year outlook as the guidance run rate. Any reason, and you mentioned it sort of on the call, that you're watchful of. Yeah you know, any softening conditions, but is it you're seeing any, or you're just mindful of the backdrop? Before I get into that, I just want to say that, you know, our total Curtiss-Wright sales guide for the year is 4%-6%, of which 3%-5% is organic. We have record backlog. We're having historical highs in orders. You know, we had another great Q1 from an order perspective. We have a lot of confidence right now as we go through the full year and, you know, our sales guidance and all of our guidance. I think as you look specifically at the industrial business, they had a great Q1. To your point, they were up, I think, 9% or so in revenues. That was evenly split between industrial vehicles and then also kind of the automation and services that we provide. When you peel back the onion a little bit on the order book, the orders were actually down in Q1, 20% year-over-year, but still above pre-pandemic, healthy 2019 levels. That business itself has a very strong backlog. The order book doubled in 2021. I think there's still some of that going on. I think what we're seeing right now is, you know, as the supply chain is improving in commercial industrial, lead times are shortening and customers are starting to adjust their order book. We're expecting to see a little bit of that normalize here in the first half of the year and then pick up as we get into the second half of the year. Overall, our sales guidance within general industrial is 2%-4%. That includes a 1% FX headwind. Mm-hmm so it's 3%-5% on the full year. We're certainly approaching this situation cautiously. I think, you know, we have been, I know we have been in contact with our customers. You know, many of them are experiencing similar strong starts to the year. They're, they're optimistic as to where we're going. I think, between the communication that we're receiving, and then also some other things that we're doing to launch new products in the power electronics management space to take advantage of secular trends in vehicle electrification, we're optimistic that that order book is gonna pick up as we get deeper into the year and into 2024. Which part of the portfolio are you seeing the most, normalization of the order trends? I'd say it's mostly within the industrial vehicles. I think, you know, as you, as you take a look at some more of our shorter cycle businesses, the Surface Technologies business, which, you know, people call the canary in the coal mine, it's really more of an indication of what's happening now in, you know, production activity across general industrial, or it can be a very good indicator as to whether there's a problem coming because it shuts down very, very fast. You know, that business itself has been running in the high single digits to low double digits for orders, and we're not seeing any signs of weakness there. I think, again, it's just really just being more cautious as we approach this and letting some of that slack work its way out. Okay, good. Nuclear, just to shift gears. Yeah ... commercial nuclear side of the house, maybe the aftermarket to start us off. I know that during COVID, you had certain restrictions, service maintenance, upgrades weren't able to be fulfilled as maybe as fast as they would otherwise have been, and I think you're working through some of that backlog. What's the outlook for this year and maybe going forward within the commercial aftermarket for nuclear? We've seen really nice order patterns in our commercial aftermarket business, I think some of it initially was, you know, a catch back up, but I think way more across the board, we're seeing this as just increased, you know, activity due to commitments to keep the current nuclear fleet here in the U.S., specifically online, and go for that 60 - 80 year license transitions. 2023 will be the first year that we're not facing a shutdown of a reactor during the year, stable at the current 92 reactors. Of those 92, just over half, 47, to be specific, just over half, have committed and are either applied already or are processing their applications for that 60 - 80 year license extension. Most of the other ones are expected to. They're just not old enough yet that they're at the juncture to do that. You know, that's really. You know, we've been asked many times, you know, how much work we think, you know, those that license extension will drive, and it's very hard 'cause it does very much vary plant by plant. Even when we're doing the maintenance work that, you know, the orders that we're seeing, it's not necessarily like, oh, this is aftermarket. Mm ... and this is subsequent license renewal. You know, clearly, we're hearing from our customers, they're, you know, beginning to implement the things, you know, maintenance work that they wouldn't have done if they weren't doing that, those extensions. I think it's very early days, but we're beginning to feel, you know, the influence of the government dollars that have been made available through, you know, first, the infrastructure bill with some tax credits, and then in the Inflation Reduction Act, you know, some additional, you know, credits available out of the government. Those monies are really driving confidence in the utilities to spend the money and maintain these plants. That is, you know, the predominance of our business is here in the U.S., but we're doing that in Canada and over in Europe. You know, we've never had much of a presence with a footprint in the aftermarket in France, and that has been a big focus for us starting last year, and we're making inroads in France that could be a significant growth factor. You know, where that business had historically been, you know, low single-digit growth, even in a difficult market, we're definitely seeing it go, you know, move into a mid-single digit growth market for the foreseeable future. You have a sense as to penetration rates of what is addressable within the commercial aftermarket nuclear side of the house, what Curtiss-Wright currently does, what they could do in the future? Is that a something that you-? I think... ...think about? You know, one of our programs is, you know, one of our business units, I should say, continually looks to bring in new products that, you know, a lot of people want out of their nuclear business. It's small enough and, you know, it's not easy to be a nuclear supplier. You have to maintain a lot of quality standards, go through NUPIC audits, a whole variety of things. We actively engage the broader market that if they would like, you know, we'll take over, sometimes pay them a royalty, sometimes pay just to buy a product line and do it. I mean, we're always looking to expand the footprint of what we have. I mean, we are, you know, a very significant supplier into this market. You know, I had the luxury of being invited to an NEI dinner last week, and, you know, a variety of the manufacturers of the new next-generation advanced reactors were at the table, along with a variety of government officials. Curtiss-Wright was there as one of the few, you know, or only tier two supplier, you know, in that network, and I think it really demonstrates, you know, where we sit in importance in that market. Well, that's a good transition. What is the outlook for small modular reactors and advanced nuclear reactors over the next five years? 'Cause obviously, that's a greenfield opportunity for Curtiss-Wright. Absolutely. Greatly positioned for it. If it happens, it's awesome. Yeah. If it doesn't, it's not in the numbers. What is the... Right what was the outcome of the dinner? Well, the outcome of the dinner was a very strong sense of commitment that the government needs to play a role today to help drive the commitment to an order base that will drive the supply chain and the manufacturers to get moving with being ready to scale for this. You know, obviously, the ARDP money was put in place back in 2020. Mm-hmm. You know, X-energy, you know, who we're very proud of our content with them, you know, is, you know, moving forward rapidly. TerraPower was the, you know, other receiver of the ARDP money. You know, we're very much engaged with them. There's nothing to talk about publicly with content there yet, but we're engaged across all the SMR reactors. You know, I mean, the potential for this, if they build out reactors at the rates they're talking, you know, they very much are focused on bringing 13 gigawatts of power a year on board, is, you know, what the DOE is trying to lay the groundwork with industry to deliver on. I mean, that's just massive for Curtiss-Wright. You know, in the next five years, what you specifically asked about, you know, for all these small modular reactors, and we are working hard to be engaged with GE, Hitachi, and Holtec, and Rolls-Royce, you know, NuScale, right down the board. You know, they've got to, you know, build test facilities, put equipment in the test facilities, build out their prototype reactors. That's significant business for Curtiss-Wright in getting through the next five years. You know, we're recognizing revenue as we do design and development work, you know, across some of these reactor developers today. It's not significant to the organization, but, you know, we're gonna be moving into prototyping and test facility development here, you know, in the next year or two years, and that's really gonna be quite a catalyst for us, and probably something we'll be talking about at our next Investor Day. All right. Good teaser. All right. Well, with that, appreciate your time. Okay. Thank you for coming. Thank you.