I see that the clock has started. Our mics have gone live, so we have to stop saying silly things now. Yeah. Welcome back to Citi's Industrials Conference, our third and final day here down in Miami. We've had a really nice few days and some really nice weather, which has been great. We were just commenting on that before stepping up onto the stage. I now have the pleasure of hosting with us here today, Curtiss-Wright. We have both the Chief Executive Officer, Lynn Bamford, who's been with the company since 2004, I believe it is, through an acquisition, right? You've, I think, led most or all of the segments of the company. Most of them. Most of them. Yeah, not quite all, but most. Yeah. Okay, great. You've done nine acquisitions. Yes. Is what I read. Yes. That's gonna be something interesting to talk a little bit about. Chris Farkas, You got it. Got it right. Oh, no, 2009, I think I have. 2009. Yeah. You were previously the controller of the company as well. I was, yes. Okay, great. 17 years. The previous experience, including at United Technologies. Yes. Right. Parker Hannifin. Yeah. Okay, great. They were here, with, well- Yeah. What has become of United Technologies was with us here, yesterday. You just reported results. Yes, we did. I think Tuesday night, held the call on Wednesday. I don't know if there's anything incrementally you wanna get on the record, stepping away from that, but I certainly would, you know, be happy to provide you an opportunity to sum up, you know, what happened in the quarter. What you might wanna highlight is what you believe, the most kind of important indicators they might have highlighted on the call. You know, if you found that you're coming across any consistent set of questions from investors, post that. Do you wanna kind of enlighten everybody or kind of get clarify anything? I'd be happy to give you some time to do that. Sure. I'd say first, thank you to you, Jason, and for Citi to inviting us to this conference and having us be a part of it. Mm-hmm. It's a real pleasure, so thank you. Yeah. You know, we were pleased. You know, we were, you know, really felt strong and good about how we finished the year. I know one of the things that we did talk about after the call with several people was, you know, we had set ourselves, we felt unachievable, but a big goal for our bounce back in our defense electronics segment. Mm-hmm. Definitely got some kudos for, you know, pushing that well across the line and, you know, getting to the top end of that guidance that we had put out there. That was one of the things that got some dialogue. You know, we talked during the call, but also continue about where we are with supply chain in that organization, which, you know, I think we went over yesterday, so I don't know if there's a need to go back over that today. You know, the other thing that I think, you know, I'm very proud of, you know, our ability, you know, to yet again expand operating margins, you know, in an environment where we lost revenues from our anticipated level in defense electronics. You know, the inflation and labor costs are a very real dynamic in the world. I think it really is a great reflection on Curtiss-Wright that, you know, we stay ahead of this. You know, we started working on our pricing strategies back in 2021, really before inflation kicked in any seriousness. You know, in anticipation of it and really going through our contracts and looking at the terms and conditions, we had to flex our pricing, you know, as potential inflationary pressures came. That's really just put us in a very positive position. I think, you know, demonstrated by our operating margin, you know, growth that we were achieving and that we're looking to yet push it up, you know, slightly again this year as, you know, with our guide to 2023. We feel, you know, good about our guide for 2023 and feel like it's really gonna continue to deliver value to our shareholders. Okay, great. Chris, do you have anything to add? I would just add that we're in the second year under Lynn's leadership and our Pivot to Growth strategy and the commitments that we made three years ago, we're well on track to achieve, despite some of these things that Lynn's talking about with the inflation and supply chain electronics challenges that we faced this last year. I think the messaging's been well received. We're, you know, executing according to plan and looking to have a successful completion to those three-year targets later this year. Things are going well. A lot of good growth factors within the markets. A lot of things that are happening under Lynn's leadership that are helping to enable that growth to happen, and just happy to have the opportunity to talk to you today a little bit about that. Okay, awesome. Great. Yeah, maybe we'll dive right into kind of some of those topics. Mm-hmm. Give you an opportunity here to talk about some of the longer term strategic priorities that you've set out for the company from a big picture perspective, and really try to answer the question from the way I've been posing it this week is, okay, we're sitting here three years from now. Mm-hmm. What do you think we will have accomplished in that three-year timeframe? I think more importantly, what are we gonna be talking about in 2026, other than congratulating you for accomplishing all that you set out to do? Most importantly, you know, kind of what does the H2 of the decade look like? What are we gonna be talking about in 2026 about the next 3 years after that? Yeah. I was really, you know, of all the questions you could ask, that's like almost my favorite question to be asked, because Curtiss-Wright is sitting at, you know, Sorry about that. So proud of, you know, what we've been able to accomplish, the growth we're projecting this next year. Really some of the big, you know, whales of opportunities that are gonna come to Curtiss-Wright are coming in the middle of this decade, in the back half of this decade. You can just walk right through our end markets, you know, across the defense markets, you know, as AUKUS gets layered in and NATO countries starts its spending to 2% or greater of GDP, you know, and bipartisan support continues on for defense budgets as, you know, we definitely saw this year and anticipating next year. Those things are all, you know, going to ramp. Columbia-class will be getting to 1 sub a year on top of at least, you know, minimally 2 Virginia class a year. I mean, those are great drivers for our business. When I look across defense electronics, you know, which has such a wide range of programs that, you know, the resurgence and, you know, really starting to build out some ground vehicles, which, you know, really provides us good volume sales. The positioning we've got, you know, put ourselves in to really ride that tail is going to be really meaningful, and I think that's going to be an exciting thing to be talking about, you know, as those ramp, you know, early production years for those, but, you know, the ramp rates for them in the back half of the decade I think when we think of commercial nuclear, we have so many good things going on. You know, I look at, you know, the stabilization of the current operating fleet and our capabilities in the aftermarket as they go to extend to their 60 to 80-year licenses. Our position to service that market is, you know, really changed the trajectory of the growth in from that alone. You start layering in, you know, where we are with the small modular reactors and advanced reactors. The positioning we've publicly talked about our position with NuScale and X-energy, but we are very much working, you know, the main players in that field and feel confident we're gonna have meaningful content on every one of those platforms. You know, if you say for TerraPower and X-energy, who won the ARDP contracts, you know, they're targeting, you know, having those reactors online in 2028, which, you know, when you say it's 2023, they've got to, you know, work is going to be happening, meaningful work in, you know, that 2025, 2026 timeframe to build out the prototype system so they can be getting those reactors to go through all the NRC approvals and be online in the 2028. I think that will be real. You know, we'll be talking about the, you know, them receiving their various, you know, approval levels, and that will be exciting there. You know, we've talked that, you know, we're in a good position with Westinghouse to continue selling them reactor coolant pumps for the Gen III+ reactors. They, you know, there's a lot of press out there of, you know, plans to build out plants across a lot of the Eastern European countries, but, you know, even some of the more Western European countries are starting to have more dialogue in that area. You know, just earlier this week, you know, Poland, who has kind of laid out the most public timeline, we talked about that in our February earning call last year. They pulled that timeline a year to the left, which, you know, is great to see and just shows the commitment to really getting this. I feel like by the middle of this decade, 2025, 2026, we're gonna be working on building those reactor coolant pumps to build out this Gen III+ business, which is fantastic business, for Curtiss-Wright and really, you know, meaningful in volume. Mm-hmm. Then, you know, you continue on, you know, in commercial aerospace, I think, you know, we've done so many things in the company that you know are for the next one, two, three years, but so much of what we do and how we plan our R&D is really looking out, you know, for long-term growth. I think, you know, when I think of commercial aerospace, some of the exciting things we've done, and we talked about our win with Eviation on the Alice aircraft as all-electric aircraft. I don't think they're gonna be in production by 2026, but I think that market's gonna take form and some winners are going to have come to the surface, and there'll be line of sight on how that is gonna turn the business. I think we are doing all the right things to be positioned for that market. Sort of like our Gen III stuff is just over the horizon now, I think that will be another real growth vector that will be just over the horizon for us there. Another area that, you know, it's early days is we've really been doing a lot of work in electric vehicles to have some really meaningful content on the drivetrains in electric vehicles. Mm-hmm. You're winning, you know, some, you know, very, you know, good contracts in that space. I think by, you know, the next couple years even, you know, some announcements maybe even later this year of, you know, content that you can really see is gonna be a growth driver for Curtiss-Wright. I think, you know, I could give even more examples, but I'll try. Yeah. Be concise. There's a lot to unpack there, and I wish I could find my pen. I was gonna write all this down. Oh. Cause I wanna unpack a few of them. Yeah. As we go along. I mean. To commit myself to memory here. Starting on Columbia-class. Yeah. It's obviously a very high priority program for the Navy. Yep. well, really for all of us taxpayers. Yep. I suspect, right? Pretty much the top priority within the DoD right now. Right. Yeah. Yeah, exactly. From the perspective of Curtiss-Wright, where are you on the kind of the ramp and the revenue that you may or may not see on Columbia class? You mentioned to getting to 1 ship a year or 1 submarine a year. Does that lead to some growth in that program for you? Yeah, it absolutely does. I think as you look at the Columbia-class submarine, we've got $100 million, $115 million of ship set content per sub. You know, the second submarine will start to be produced in 2024. We usually start working on that about 18-24 months ahead of the ship builders. Okay. About now. We've already started to receive some orders. That is expected to ramp up to one per year starting 2026. Right around the corner, you know, we would expect that we'll start to see a more significant, you know, ramp rate. Right now, as you look across our full naval portfolio, you know, ramping up on the CVN-81. I think between the Columbia-class and what's happening in the CVN-81 aircraft carrier this next year, you're gonna see a very healthy growth rate in our naval defense business. You know, the Virginia-class submarine is producing, you know, two per year at a very healthy pace. There's some additional opportunities that, you know, we're hoping to hear more about soon here in March in the AUKUS program where, you know, if that's something similar to what we have in the Virginia class, that would be $75 million of ship set content. There's some really cool and exciting things that are happening in the Navy side of our business, as well as nuclear and all these other growth factors that Lynn was talking about. Great. You mentioned, staying with the defense area for a minute, ground vehicles. Yes. I'm kind of intrigued by that because, you know, at least from an investor's perspective, the Army has been the bill payer- Right. You know, over the last 10 years or so. You know, as we, again, and probably rightly so, we were involved in active campaigns. You know, I think, what's happened here in Ukraine has proven out that, you know, ground war is not dead, unfortunately. Yeah. I'm kind of curious your constructive commentary on ground vehicles. Was that something that was kind of in the plan here for a number of years now, and this was something that was naturally going to occur? Is this something that's gotten a little bit incrementally better because of what's gone on in Ukraine? What, what exactly is going on there? I think it's really galvanized the government, not just the U.S. government, that they need to follow through on some of these commitments. I mean, there has been a lot of fits and starts and more stops in ground vehicle development over the past decade. Development work programs get too expensive, they get canceled, you go back to square 0. I think some of that had been fixed naturally. I mean, OMFV is moving through the system. There's some other wins that are moving through that I think would've happened anyways, but, you know, it never hurts to have, you know, the terrible reality of war to put, you know, before you to say, "Wow, we need to make sure we've got the right vehicles." That's, you know, I'd emphasize, that's not just here in the U.S. You know, we have a very much a European presence, and a lot of the capability we have in Europe, not all of it, but a lot of it, is geared at outfitting ground vehicles. We've built up, you know, in anticipation of this, built a very strong partnership with Rheinmetall over the past couple years to be able to be their, you know, provide some critical high power electronic stabilization equipment with them and outfit some of the, you know, electronics and displays on their vehicles. You know, they have a good strategy that, you know, we announced our win, Rheinmetall, BAE, to build out the Challenger 3 in the UK. That's kind of their model, is to work in a localized environment. So as governments wanna spend money on these programs, they drive jobs in their own country. Rheinmetall has got a very good model of doing that. I think, you know, unfortunately, the weakness of the vehicles that were available in Europe, you know, clearly came to light, you know, during this conflict. I'll say we really have not felt the money being spent yet in the European countries, you know, moving towards funding their NATO commitments. I think we'll see that in the back half of the year and into 2024. I think, again, in your, what we'll be talking about, 2026, I think both here in the U.S. and throughout Europe, we're gonna see ground vehicles, you know, be at a very different level than they have been. Mm-hmm. Okay, great. Maybe moving quickly onto the nuclear side of things. Again, maybe another lesson from Ukraine here from a, from a big picture perspective. Sure. The dependency on Russia for natural gas. I haven't tracked the most recent figures, but I think the last ones I saw would suggest that the Europeans were very quickly exiting their dependence. Yeah. on that gas. What do you think comes out the other side of this, particularly, in Europe? You know, I guess at this point, they can look for nuclear energy, renewables, gas. Is it gonna be kind of all of the above? Are they gonna put increased emphasis on one over the other? Kinda what's your expectation at this point? I think our expectation and our focus area is, I think, a really broad realization that nuclear needs to be a, not the only player, but a very dominant player. Yeah. You know, you can have these others, but you need your base energy, and really nuclear is the best clean energy to provide that. I just, I think, you know, month by month, the world realizes that. There's an interesting article we saw last week that Japan, who has been a very fervent anti-nuclear, has really taken a countrywide, you know, sweeping change to say that they now think nuclear is an absolute necessity for them to hit their carbon-free goals. I think when you start turning, you know, it moved through Eastern Europe who just were so driven by one, to have the energy independence- Yeah. from Russia, you know, into mainland, and then, you know, now to even a country like Japan. Mm-hmm. I do think that the future for nuclear energy is very bright. I think it's, you know, coupled with, you know, things that maybe the average person would have no way to know about. When we talk about these Gen IV reactors, they have an entirely different safety envelope than what, you know, we saw with earlier Gen II and even the Gen III reactors. You know, the fuel is isolated, there's really no chance of meltdown. They're designed, you know, with entirely passive safety systems, and the fuel cannot melt down. Things that I think as they become more understood by the general public, you know, the, there's a very natural, you know, acceptance of them. You know, I even think of those advanced reactors andYou know, a lot of them are in the 700 megawatt type range, which is, you know, a fairly common output for a coal factory. You know, more and more, you know, wanting to keep the jobs in where, you know, maybe coal factories were tearing down coal factories, replacing them with these advanced reactors. Mm-hmm. The electric grid is already there. You know, you have a workforce that is looking to, you know, move to that. You keep jobs in communities. It's such a good way to approach it that, you know, really works for communities, and it's pretty cost-effective. You know, these advanced reactors are designed to be, you know, largely manufactured in a factory, then taken to a site, and I'd say assembled. There is work at the site that really de-risks, you know, what we've seen on some of the larger nuclear power plants, where there's just huge cost overruns during construction. Right. Stuff, so they're taking that risk off the table. It's, you know, it's the future's bright for nuclear. Yeah. I'm gonna probably date myself by asking this question, but I feel like we haven't had a new start here in this country in decades. Is that still the case? Well, the two plants that were started a while ago are going online down in Georgia. There is the Vogtle 3 and 4, 1 and 2. Three and four. Give me a lifeline. Thank you. Thank you. Yeah. Are just in the process of going online, but we haven't started a new build. That's, you know, what would make the headlines in, you know, in a very, very long time. The ones that you mentioned Is it just kind of like a replacement of an existing facility? No, they were a continual build-out of new power generation in Georgia. So. I think what's important to note when you're thinking about the U.S. market and what we've seen change more recently is that as the U.S. has stated their desire to kinda regain their commercial nuclear dominance. Mm-hmm. There's been monies put aside, you know, through the infrastructure bill, through the Inflation Reduction Act, through the ARDP program to advance these technologies going forward, because it will be critical for the carbon-free footprint going forward. Yeah. Not just the development of the new technologies, but support for the existing operating reactor fleet. We've got a nuclear aftermarket business that's roughly $250 million that has been fighting headwinds from plant shutdowns. Yeah. events like Fukushima. Yeah. There has been, over the past 10 years, a relative stagnation or even headwind that we've been climbing up against to grow that business at a low single-digit rate over that timeframe. With the money that's being put back into the existing nuclear reactor fleet through these funding mechanisms, through these tax breaks, you know, we believe that these plants, you know, stopping the shutdown is a good thing for us. We can let our true growth rate and the volume and quality of work that we're taking over be reflected within our growth rate. Beyond, you know, just supporting the fleet, it's now how do we extend the plant lives of these plants from 60 to 80? We have a lot of good work that goes in from that perspective as well. Mm-hmm. I think it's about the advancement of these new technologies, whether that's Gen III+, Gen IV, but also the stabilization or even opportunity that now exists within the aftermarket base. Right. Right. Okay. Well, I'll know it's real when it comes to my home state of California. Well, California is even the Diablo Canyon. Yeah, they've extended it. Yeah. They have said they're not gonna shut it down. Yeah. that was, you know, it's funny you say that 'cause. Yeah. Wow, when you get California to shift gears, then. California is the barometer. Yeah. Yeah. Yeah. No, that's why I raised that topic is because. Yeah. Yeah, we did extend out. I don't remember how many years. Probably the 60 to 80-year life extension, which is what everybody. How many? 60 to 80. Most of the plants were licensed through 60 years. Yeah. They're coming up on that window. Yeah. Hence when they're closing, and now those are being extended an additional 20 years. 20. Okay. Got it. All right. Yeah, I live on the, in the northern part of the state where, well, Diablo Canyon is a little further south. Yeah. was definitely in the headlines, up in Northern California as well. Yeah. Let's see. Sticking with these opportunities, on the commercial aerospace side, is this a question at this point for you all about production rate increases and kind of tracking what's going on at Boeing and Airbus? Is that the simplest way to think about it? Is there much in the way of aftermarket exposure that you have at this point that we should be minding as well? Let's say, you know, a clear driver is the production rate increases. Yeah. which, you know, we've said that, you know, from the way we framed anticipating our business when we did our 2021 Investor Day, it's really the only market segment that's recovered a bit slower. Mm-hmm. -than we had anticipated. Both the narrow body and wide body get pushed out about a year from what we you know, had anticipated at that time. They are recovering and that's very much good business for us. You know, there's other, you know, on top of those businesses, you know, we announced earlier this year that we had a nice win with Airbus. Mm-hmm. -for some electromechanical actuation, which is not something, you know, we've not had that type of content with Airbus in the past, and they're very much looking to attract new suppliers. So that's really, you know, new frontier for us to be able- Mm-hmm. to provide that type of equipment into Airbus, and we're determined to execute well on that program and use it as a launch to win more significant systems across Airbus. You know, there's those things. Another thing that we do that doesn't get, you know, quite the headlines that is a ramping portion of our aerospace business is some of the surface treatments we do into some of the newer engines that allow them to run at higher temperatures. Mm-hmm. They can have a more efficient fuel footprint while we're still not having all electric aircraft. A couple different growth sectors. Chris, I'm gonna turn it over to you to talk about the aftermarket. Sure. As Lynn had mentioned, you know, we are seeing those healthy growth rates existing within the OEM side of the business. I think our expectations are that it's not gonna recover quite as quickly as we had thought, and a lot of that has to do with just the, you know, the A350 and the 787 production rates pre-pandemic were- Yeah. were fantastic. Right. But it's still a very healthy and growing market for us. I think as you look at the aftermarket business, what we have isn't really aligned well to, you know, revenue passenger miles and typical aircraft maintenance that you see from increased flights. Our aftermarket business is a little bit more focused on the Service Bulletin side of things. When there's an opportunity to kind of bring in- Yep. -planes for modifications that they need to make that are mandated. That's a little bit slower for us this year, and we are facing some FX headwinds because we do a lot of our commercial aerospace business and work out of our Christchurch facility in the UK, which is kind of a manufacturing center of excellence. Facing a little bit of a headwind, but it's still a healthy 5%-7% growth rate in that market this year. As Lyndon mentioned, we're continuing to invest in the future. It's not just about thinking about, okay, what happens when, you know, everybody recovers back in 2025, 2026, what's next and where are we gonna be after that? I mean, I've been working in commercial aerospace for many, many years, and there's a... Since I've started, been talk about EM actuation taking hold and replacing hydro, you know, electrical mechanical-. Mm-hmm. hydro mechanical actuation, and it's starting to take hold. I think, you know, with the vision for decarbonization going forward, whether it's aircraft, vehicles, power generation, I think we've got a good footprint, and we're aligned to those growth vectors. Yeah. I'm intrigued by the comment that you made about some of the content on, at Airbus. Mm-hmm. Has that been driven largely by the difficulties that all of, you know, everybody has seen in the supply chain and then wanting to look for a second source? How did you come about getting that? We've been knocking on their door for a long time, you know, asking for an opportunity. Yeah. do it. you know, truthfully, I don't wanna talk about another supplier's performance, but, you know. Yeah. clearly, you know, we did a lot of work to prove our capability, a lot of audits with Airbus to get to the right and, you know, using this Spearhead opportunity to definitely prove what we're capable of, and we're definitely talking to them about other opportunities already to, you know, be able to provide content to them. It's gonna be good. Yeah. As we think of, you know, the big debate in the investment community at this point is kind of when does Boeing introduce a new aircraft? Right. That probably, you know, spurs a competitive response by Airbus. You know, at this point, everybody's kind of looking into the mid part of next decade. Right. An introduction of an aircraft, but we'll probably back up some number of years to, you know, they start to do the design and start selecting suppliers. Sure. That kind of thing. Sticking maybe a little bit with the competitive environment. You're thinking about, you know, new narrow body aircraft potentially in the next, I don't know, it's gonna be inside this decade when this gets announced, so they probably start selecting suppliers, I think. Yeah. Is this gonna be a big opportunity for you all from a content perspective? You feeling like you've got more to gain than you have to lose in this next aircraft relative to what you have today? We're definitely focused on some new product introductions. Yeah. in that area, which honestly, we have been fairly slow in, if you turn the clock back two years. Very selective areas where we can really bring our intellectual property to bear in the market and command, price points that are gonna be good for Curtiss-Wright. We'll definitely pursue business, and I think it can be a growth vector, but. Mm-hmm. you know, there's also a lot of price pressures in those end markets, and so we'll be selective on where we look for business that we can really bring something unique to the market and command the margins that we want to drive. Got you on record, you're not gonna buy business. No. Okay, good. That was a more direct way of saying what I said. Yeah. Yeah. Understood. I wanna go back to the comment that you made, Chris, earlier about AUKUS. Mm-hmm. We had the other shipbuilders here. We had shipbuilders here this week. You're talking about the submarine, I'm guessing. Yes. Yes, okay. The AUKUS, yeah. Yeah, yeah. Perfect. Okay. We had both shipbuilders here this week. You know, they're just taking a complete wait and see approach on how this all plays out from an industrial base perspective. They're not really kind of committing to anything at this point. It sounds like it's an opportunity for you all, no matter how this all plays out from an industrial base perspective. Is that kind of the way I'm hearing this? I would say, you know, they have left it open-ended, whether they're gonna make it a variant of an Astute or a variant of a Virginia. Yeah. It's a win-win for us in either case. Okay. Obviously, a much bigger win if it's a Virginia-... Yeah. -class sub, you know, significantly bigger. Yeah. I think, you know, there's a lot of... The conventional thinking is that will be the case. You know, there is questions, and I will say that there's not a lot of chatter, you know, around the community on how this is gonna play out. They are committed to making an announcement in March of this year, which we've heard they're gonna stick to roll out their plans for how they're gonna go about this. You know, the one thing that I can talk about is, you know, we've had engagements directly with the Australian Navy, and they've been in some of our facilities, seen the capability of what we do for the Virginia and strongly indicated that's not something they would look to replicate or-. Mm-hmm. bring back to Australia, 'cause obviously, they wanna do things in Australia and drive jobs in Australia Yeah. -on all these programs. I mean, we feel that's a good indicator of, you know, the growth it's gonna provide to Curtiss-Wright. Again, we could be surprised by the announcement, so we'll wait... Yeah. Until they roll out the plans, we're optimistic. Yeah. What's the competitive landscape look like for that? Would you be competing against anybody? Not really. I mean, it's, you know, we never treat our business as sole source, but we have a pretty unique capability that we've been doing for 60 years and are, you know, a world-class supplier in that space. Mm-hmm. you know, we feel good about our position. Right. Right. Good. The word price has come up a few times in the conversation, at the beginning when you were talking about some of the things that you've been able to do to offset, inflation. Mm-hmm. Not wanting to chase price down. I certainly don't want you to rehash anything that you know, went through yesterday on your earnings call, but I am kind of intrigued on how you are handling inflation 'cause as I've been here this week, listening to other aerospace and defense companies, particularly on the defense side, I think they're all. Nobody's projecting margin expansion this year. They're all dealing with, you know, particularly on firm fixed price programs that have been signed, you know, prior to inflation really ramping. They're all kind of struggling with their margins 'cause they don't have the opportunity to reprice their firm fixed price contracts and get relief. I'm just kind of curious, you know, the approach that you have, what enables you to begin passing on price. Is there a limit to how much you can do that? I'm just gonna just, to talk philosophically about how you're approaching all of this. I'll maybe tag team this with Chris. Let's start out. We are projecting margin expansion next year. That's why I brought it up. Okay. You are. Okay. The others that have been here, this week. Yeah. particularly on the defense side, they're all forecasting margin compression this year because these inflationary. Back early in 2021, we really, you know, we did a complete training across the company with anyone who had any hands-on with negotiating contracts to really put forth best practices about being prepared to negotiate through an inflationary environment with those contracts. That was just very fortuitous, you know, given what has come bear, you know, to be the reality of the world we live in. There's a combination of really getting ahead of our contracts. There's a combination of working with our supply chain. There's, you know, we've had very, very purposeful programs where we track, you know, which portions of our business we have been able to adjust the sales price to absorb the cost increases in the supply base and labor cost increases, right? It's not just inflation on the materials. You know, we're work aggressively to assure we're paying our staffing and keep a secure workforce. There's also some dynamics about how we, in some of our long lead and firm fixed price contracts that have put material under order, and that's something Chris can speak to. Sure. Yeah, I'll try to expand upon that. Curtiss-Wright has a long, rich history in operating excellence, I think if you back up, you know, probably back to the 2009, 2010 timeframe, a long time ago, we were a 9.5% organization. Lynn and I have been through the transformation and the deployment of that commercial excellence to the organization to get us all the way up to 16%, you know, 16.5%. Today, you know, we're targeting, you know, 17.4%-17.6%. Building upon that foundation of operational excellence, when Lynn came in as CEO, a critical component of our Pivot to Growth strategy is the operational growth platform, which takes that operational excellence also blends in commercial excellence. Lynn had talked about the training that had taken place within the organization, and it's really about helping people who are out there in the field understand the economic value proposition and what they're offering to the customers, and then having the confidence to be able to go and grab that value. Beyond that, we started establishing early warning systems throughout the organization so that the supply chain was talking faster to the contracts people in the organization, so that whether it's freight increases or whether it's material costs, that information is flowing more quickly to the hands of the people who are ultimately in charge of the negotiations. True in the government contracting environment, I think, you know, there's a benefit in that you lock into your material prices at the beginning of the contract, so you're really not subject to the same inflationary pressures. Hopefully, if you've done a good job like I think we have, you have escalation provisions, so you've got built-in pricing that takes place there. On the commercial side of the business, when, you know, you talked about commercial aerospace, there might be long-term agreements. There might be opportunities to rebid more frequently 'cause it's a shorter cycle business. Those are really the places where we seized the greatest opportunities, stepped in, had some very difficult discussions to get this done. I think the team has done an excellent job, and I think as we look back at what happened this last year in 2022, probably about 1% of our sales growth was associated with, you know, some of those activities, mainly on the commercial side of the business, which we're really saying is new, and about 10 basis points of margin expansion. As we head into this year, again, we're targeting something similar. I think the program has been very successful. You know, the timing was absolutely perfect here 'cause the inflation really didn't start to hit us until, you know. Yeah. A quarter or two after this, new program was deployed. Been pleased with the results to date. Yeah. Yeah. Either very prescient or better lucky than good, I guess, right? Yeah. Yeah. I'll tell you, there's truth in that too. You know, you've talked about, you know, quite a few growth vectors that you have here in front of you. I suspect that, you know, research and development, new product introductions, have gotta come along with that. Maybe you can highlight a couple, three, you know, R&D projects, new products, that you think you're gonna be highlighting to the investment community here over the next two years, and then Chris, the question to you will be is, you know, she's got the idea of how you're gonna pay for it all. There is that. Always a question. You know, the area. You know, we have really shifted our thinking to think of our total engineering spend. Both what we're investing ourselves to build products to bring to market, but also how we deploy our engineers as a customer-funded engineering project. We have continued to increase that. It was fairly flat 2021 to 2022, but, you know, up very much from all the prior years, and we're continuing to drive that up probably another $20 million in 2023, you know, included in our margin expansion. It shows, you know, really the operational excellence with inside the company. When I think of some of the IRAD projects, things that we're proactively building, you know, we spend the most of our IRAD money in our defense electronics segment. Okay. We started back, you know, really about three years ago, the government put out new mandates about new open standard equipment that would be very favorably weighed into awarding contracts, the MOSA and the SOSA standards that maybe would be. Mm-hmm. ring a bell to some people. We very heavily have been investing in building out our product offering in that area to ensure we've got the right slate of products to take into that market. We put a couple of press releases out over the past 18 months where we could of wins we've had Mm-hmm. with that content. That's been a big focus area for us and very exciting. An area we're ramping up on this year, again, something that doesn't make the headlines quite as much is, we've been working on some very large subsea pumping products for the oil and gas industry for deployment across the drilling fields. Those, you know, those projects are gonna probably, you know, come, you know, to conclusion in the 2023, 2024 timeframe. You know, we've talked about our partnership with Shell and Sapura publicly. Mm-hmm. You know, each of those two opportunities stand the chance to drive $100 million plus of business each, to Curtiss-Wright in the back half of this decade. Those, that's another big exciting kind of a new market for us. We're really excited taking that technology that was developed for one end market and reading it across to another market is, you know, something we're very excited. Just to put one example across, you know, each of the three segments, we've announced our partnership with Dynetics to bring our electromechanical actuation products into the defense area. A capability very much generated largely for aerospace- Mm-hmm. which we're using our footprint with customers into the defense markets to take that technology. You know, Dynetics is, you know, one that we can talk about publicly for their Enduring Shield product. Okay. you know, just, you know, three different examples, but there's. You can keep me up here for an hour... Yeah. talking about that stuff. I see the clock ticking, so Kris can talk about how we're gonna pay for it. In 40 seconds or less. Yeah. I think Lynn said it, well. I mean, number one, profitable growth is a CFO's best friend. Yeah. We are investing strategically to support all these growth vectors that Lynn had talked about. We're very thoughtful and calculated when we look at our R&D investments. We've got process internally to ensure that monies are being put to the highest and best use. I think you're starting to see that translate into our financial results. You know, our organic growth is starting to take off. Our margins are continuing to expand as we're putting all of this increased investment back into the business. We're not just managing the business for today, we're managing the business for the long term, and really excited about where we're heading. Yeah. Okay, great. We've gone seven seconds over now, so. Can we cancel that? It's going up. It's going up. Yeah, exactly. Oh, jeez, I didn't. Yeah. I'd like to graciously thank both of you for investing the time to come down to Miami. I know it's not that far for you, but... Our pleasure. Yeah, it's been a pleasure having both of you here tonight. Thank you for the opportunity. Yeah, absolutely. Okay, with that, thank you, everybody. Yep. Thanks, everybody. Mm-hmm.