CURTISS WRIGHT CORP Q4 FY2024 earnings call

• Acquisitions in 2024: Added WSC in June and Ultra Energy on December 31st. - Share repurchase activity: $250 million in 2024, including $100 million in December. - Dividend increase: Eighth consecutive year. - 2024 results: Record sales, operating income, diluted EPS of $10.90 (up 16% year-over-year), adjusted free cash flow $483 million. - Order book: Up 20% in 2024 to $3.7 billion, book-to-bill 1.2 times.

Aerospace & Industrial: Sales increased 5%, with a record quarterly operating margin of 21.3%. Defense Electronics: Recognized year-over-year and sequential revenue declines, but had a 24.3% operating margin though impacted by under absorption, timing, and unfavorable mix. Naval & Power: Sales growth of 12% was ahead of expectations, driven by Naval Defense, but profitability was impacted by unfavorable mix across defense and process markets.

• 2025 sales growth projected at 7%-8% including acquisitions. - Operating margin expected to be 18% at midpoint, with operating income growth exceeding revenue growth. - EPS guidance: $12.10-$12.40, up 11%-14%. - Free cash flow projected at $485M-$505M.

• Tariffs and political/macroeconomic environment as potential risks. - Supply chain and labor disruptions in shipyards could impact operations.

Q: Could you comment on the Ultra Energy acquisition and its strategic value?

A: Lynn Bamford discussed leveraging Ultra Energy's European footprint, partnership with Rolls-Royce, and broader market applicability of their products.

Q: What's the outlook for foreign military sales?

A: Chris Farkas mentioned FMS growth has been strong, expecting low double-digit plus pace in 2025 driven by C5ISR, Naval aircraft handling, and ground-based arresting systems.

Q: How are tariffs impacting the business?

A: Lynn Bamford stated the company is managing the situation with cross-functional teams, reviewing options to mitigate impact.

Q: What's the timeline for reactor coolant pump orders?

A: Lynn Bamford said an initial order is expected by the end of 2026, with potential tailwinds from Poland, V.C. Summer plant, and India's nuclear policy changes.

Q: Comment on the Naval Defense business outlook and order book?

A: Chris Farkas mentioned strong order book in Naval Defense, with Aerospace & Industrial book-to-bill 1.05, Defense Electronics 1.16, and Naval & Power 1.3.