Curtiss Wright : Quarterly Documents(CW AR2024 Summary Final for Web)

Published: 2025-03-27 09:59:11 ET CW

POWERED FROM WITHIN

2024 Annual Report

Cover image and above: Curtiss-Wright's highly-trained employees, shown here in one of our world-class manufacturing facilities, operate the latest in advanced automated production technology, such as robotic storage systems and surface mount technology (SMT) assembly lines, that speed the delivery of innovative and reliable Modular Open Systems Approach (MOSA)-based solutions to our Aerospace & Defense customers.

BUILDING ON OUR STRONG FOUNDATION TO ENABLE LONG-TERM SUSTAINABLE GROWTH.

RESEARCH & DEVELOPMENT

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TALENT

Headquartered in Davidson, N.C., Curtiss-Wright Corporation is a global integrated business that provides highly engineered products, solutions and services mainly to Aerospace & Defense markets, as well as critical technologies in demanding Commercial Power, Process and Industrial markets. We leverage a workforce of approximately 8,800 highly skilled employees who develop, design and build what we believe are the best engineered solutions to the markets we serve. Building on the heritage of Glenn Curtiss and the Wright brothers, Curtiss-Wright has a long tradition of providing innovative solutions through trusted customer relationships.

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SYSTEMS

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ACQUISITIONS

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DELIVERED RECORD 2024 FINANCIAL PERFORMANCE

Amounts shown reﬂect 2024 results and comparisons to the prior year period. Financials are presented on an Adjusted basis unless noted. Reconciliations of Reported to Adjusted amounts are furnished at the end of this document and within the Company's earnings press release dated February 12, 2025.

TO MY FELLOW SHAREHOLDERS AND EMPLOYEES,

2024 was truly an exciting year for Curtiss-Wright. We celebrated the Company's 95th year as a public company, a momentous achievement for our organization as one of the 50 longest-listed companies on the New York Stock Exchange. To mark our signiﬁcant progress on this historic journey, our ﬁnancial performance in 2024 was exceptional, and we continued to build momentum through the execution of our Pivot to Growth strategy. We achieved numerous ﬁnancial records, including sales, operating income, orders and backlog, while our strong cash ﬂow generation and stable balance sheet once again supported highly efﬁcient and disciplined capital allocation. I would like to thank our nearly 9,000 employees for their contributions and ongoing commitment in driving our record performance.

To ensure that Curtiss-Wright is well positioned for long-term proﬁtable growth, well into the future, it is imperative that we continue to elevate our organic growth enablers, and drive efﬁciency and execution within our operations, which in turn will support margin expansion and reinvestment back into the business. As you will see in the pages that follow, these growth enablers include retaining and developing our talented workforce, advancing systems and tools that promote higher levels of execution across the organization, and targeting incremental investments in Research and Development (R&D). Collectively, these priorities strengthen our businesses and ensure our alignment to the fastest growth vectors in the markets we serve. Curtiss-Wright's success is powered from within, and we will build upon our strong foundation in operational and commercial excellence, and leverage our position across our critical Aerospace & Defense (A&D) and Commercial portfolio, to drive continued value creation for our shareholders.

DELIVERED STRONG 2024 FINANCIAL PERFORMANCE

Sales increased 10% overall to a record $3.1 billion, driven by strong organic growth across our A&D and Commercial Nuclear markets. Adjusted operating income increased 11% to $546 million while adjusted operating margin increased

10 basis points to 17.5%. This performance reﬂected strong demand within our core portfolio that drove improved proﬁtability while we maintained our commitment to once again grow total R&D investments faster than sales.

Adjusted diluted earnings per share (EPS) increased 16% to $10.90, reﬂecting both our strong operational performance and the efﬁciency of our capital structure. We also generated $483 million in free cash ﬂow, with adjusted free cash ﬂow conversion of 116%, reﬂecting our strong growth in earnings and a 300-basis-point reduction in working capital. Additionally, our results included $16 million of incremental capital expenditures supporting growth investments across all three segments.

Growth in our order book was exceptionally strong, up 20% year over year to a record $3.7 billion, reﬂecting 1.2 times book-to-bill overall and solid demand across the majority of our markets. As a result, Curtiss-Wright's backlog increased 20% in 2024, reaching a record of more than $3.4 billion, providing additional conﬁdence in our long-term growth outlook.

DISCIPLINED CAPITAL ALLOCATION STRATEGY

In addition to delivering strong organic growth, we welcomed two new businesses in 2024. We invested more than $200 million to expand our global commercial nuclear operations, including the acquisitions of WSC, Inc. and Ultra Energy, which we expect will provide new avenues for growth, both by expanding our product offering as well as our presence in European markets. At the same time,

CURTISS-WRIGHT'S SUCCESS IS POWERED FROM WITHIN, AND WE WILL BUILD UPON OUR STRONG FOUNDATION IN OPERATIONAL AND COMMERCIAL EXCELLENCE, AND LEVERAGE OUR POSITION ACROSS OUR CRITICAL AEROSPACE & DEFENSE AND COMMERCIAL PORTFOLIO, TO DRIVE CONTINUED VALUE CREATION FOR OUR SHAREHOLDERS.

we maintained steady distributions to our shareholders by completing $250 million in share repurchases and increasing our dividend for the eighth consecutive year. These actions reward our investors while strengthening our capital structure. We also made strong progress in reducing working capital and generated strong free cash ﬂow, ﬁnishing the year with approximately $2.5 billion of borrowing capacity, which provides ﬁnancial ﬂexibility to support our long-term growth strategies.

WELL-POSITIONED FOR LONG-TERM PROFITABLE GROWTH

Last May, we conducted an Investor Day where we shared three-year ﬁnancial targets for the period ending in 2026, including:

• Greater than 5% organic revenue CAGR

• Operating income growth exceeding revenue growth (i.e. continued operating margin expansion)

• Maintaining top quartile operating margin relative to our peers

• Greater than 10% adjusted diluted EPS CAGR

• Greater than 105% average free cash ﬂow conversion

This strong outlook reﬂects our expectation for organic growth in all our end markets, including our support of the U.S. Navy's most critical shipbuilding programs, advancing technology in the battleﬁeld, the global demand for reliable carbon-free energy and energy independence promoting commercial nuclear technologies, and the drive to electriﬁcation, which touches many of our businesses.

As we look to the future, we will continue to assess targeted investments in innovation, R&D, systems and talent to develop critical solutions for our customers and ensure our alignment to the medium- and long-term secular growth trends within our markets. Curtiss-Wright remains well positioned to capture these tremendous opportunities and I am conﬁdent that we are building strong momentum to compound sustained, proﬁtable growth in the years ahead and, in turn, deliver tremendous long-term value for all of our stakeholders.

LYNN M. BAMFORD

Chair & Chief Executive Ofﬁcer

AT CURTISS-WRIGHT, WHERE INNOVATION IS CORE TO OUR CULTURE, WE UNDERSTAND THE CRITICAL IMPORTANCE OF DEVELOPING NEW CAPABILITIES AND TECHNOLOGIES TO SUPPORT OUR CUSTOMERS WHILE ALIGNING TO THE FASTEST UNDERLYING GROWTH VECTORS IN OUR MARKETS.

Guiding our internal focus is Curtiss-Wright's Innovation System - a cloud-based, cross-enterprise platform that every employee can access, and under the spirit of One Curtiss-Wright, it spurs ideas and encourages collaboration across the organization. We maintain a rigorous stage gate review process to ensure that the strongest ideas move forward and to learn from our experiences and failures when they do occur. We continue to identify ways to improve our efﬁciency and connectivity, including the use of data analytics that enables us to turn innovative ideas into long-term solutions for our customers. This process is further supported by our Innovation Champions focused on promoting, encouraging and driving innovation in their organizations, as well as enhanced

corporate

oversight and

selective funding

to help advance certain projects. We typically have over 1,000 ideas in the Innovation System at any given time, many of which have the potential to become actively pursued projects. As these ideas evolve into R&D projects, our analysis of market and customer trends, and expectations for return on those investments, are critical to ensure each innovation is aligned with opportunities to enhance our future organic growth.

In 2024, Curtiss-Wright, once again, grew its total investments in R&D at a faster pace than sales - and we did so while achieving record ﬁnancial results. We are fueling our competitive advantage by accelerating our investments in innovation and R&D, and balancing opportunities that will drive short-, medium- and long-term growth across the entirety of Curtiss-Wright's portfolio of technologies. These investments are often coordinated in close alignment with our customers, as we develop innovative new products to help maintain or enhance our position as a critical supplier and inﬂuence our value proposition. In addition to enhancing our current solutions, we seek opportunities to expand our content and to apply the resources and intellectual property (IP) developed under one investment to other markets we serve. This has become a proven avenue of success for Curtiss-Wright. Overall, across our portfolio, we have successfully managed our global engineering resources by balancing internally-driven investments and by securing customer funding, and we're constantly evaluating opportunities today which may become meaningful drivers to Curtiss-Wright not only in this decade but well into the 2030s.

One of Curtiss-Wright's 2,000 engineers is shown here helping to develop our industry-leading Fabric100™ processor modules, which are aligned with the Sensor Open Systems Architecture™ (SOSA®) Technical Standard for use in demanding electronic warfare (EW) and signal processing applications. Curtiss-Wright rugged OpenVPX modules undergo rigorous state-of-the-art testing protocols to ensure that they meet or exceed the highest levels of quality and reliability.

Within our Aerospace & Industrial segment, we have maintained a steady focus on investments in power management electronics to support electriﬁcation in the industrial vehicles market particularly with on-highway and off-highway vehicles. Within Commercial Aerospace, we are identifying ways to support decarbonization with innovations in sensor technologies for extreme temperature environments that will be key contributors to current and next-generation engines, enabling higher efﬁciencies and lower emissions.

In Defense Electronics, Curtiss-Wright is an industry-leading supplier of Commercial Off-the-Shelf (COTS) embedded computing technology. Within this business, we continuously invest in internally-funded R&D to advance critical, trusted computing and secure communications solutions that maintain our technological leadership, stay ahead of our customers' needs, and speed the delivery of next-generation technology to the tactical edge. This includes rugged Modular Open Systems Approach (MOSA) based solutions to accelerate the deployment of leading-edge compute technologies into multi-platform solutions (as pictured on the left), which can be a key differentiator in our customers' bids and proposals to the U.S. Department of Defense (DoD). In addition, through our Fabric100™ product line, this ecosystem of very high-performance processors, network switches and processing units, such as GPU and FPGA modules, brings state-of-the-art expertise to enable faster data communications capabilities for sensor and mission processing applications.

Lastly, in our Naval & Power segment, Curtiss-Wright has been a crucial supplier of naval nuclear propulsion equipment since its inception to the industry more than 60 years ago, and today, we remain aligned with the DoD's top shipbuilding programs. We have also continued to

Curtiss-Wright is supporting numerous technology providers in the development of advanced Small Modular Reactor (SMR) designs, including TerraPower's Natrium® sodium fast reactor (top left) and X-energy's Xe-100 High-Temperature Gas-cooled reactor (top right), which are expected to help address the global movement for carbon free energy and energy independence, and support the tremendous energy demands needed to power AI and data centers.

beneﬁt from consistent customer-funded development in support of next-generation programs which will secure our future for decades to come. In commercial nuclear, we continue to beneﬁt from customer funding supporting the development of advanced and small modular reactors where we are actively engaged and pursuing business on all major designs, and thus far, have announced contracts awarded by X-energy and TerraPower as we continue to support their efforts to decarbonize the existing energy infrastructure and create clean and reliable energy. We are also leveraging our signiﬁcant experience in reactor coolant pump technology for Westinghouse on the AP1000 reactor in the development of critical subsea pumping technology solutions to support offshore drilling and production platforms.

Looking ahead, we will remain dedicated to making balanced, targeted, and disciplined investments in both core IP and customized solutions, while pursuing the highest returns on our investments, to drive long-term proﬁtable growth.

MAINTAINING A TALENTED, WORLD-CLASS TEAM IS PARAMOUNT TO CURTISS-WRIGHT'S SUCCESS.

It begins with our culture, which incorporates a dedication to total integrity, excellence and continuous improvement, with a commitment to delivering strong operational results. We pride ourselves on operational and commercial excellence, and customer satisfaction, and are constantly working to develop products for must-not-fail, safety-critical solutions that address our customers' most challenging engineering problems. As a result, we understand that the continued success of our Company requires attracting, retaining, and developing the best people and identifying our next generation of leaders to drive our performance for decades to come.

With those goals in mind, we continue to invest in our workforce in support of our Pivot to Growth strategy and to position Curtiss-Wright for long-term, proﬁtable growth. We are constantly evaluating and reﬁning our key talent programs to meet future challenges and improve overall employee engagement.

As part of our on-going investment, we provide an enterprise-wide suite of professional development and training tools focused on enhancing skills that are critical for our long-term success, such as supply-chain management as well as program and project management training, along with opportunities to improve employee ﬁnancial acumen, strategic thinking and executive presence. Our programs include targeted engineering leadership training and a cross-functional New Business Leader (NBL) program focused on the development of early-career, high-potential employees, which has produced nearly 350 graduates thus far.

For our most distinguished technical experts - many of whom are recognized across their respective industries - our Technical Fellow program represents our commitment to advancing technical excellence by recognizing the top 1-2% of our engineering colleagues who exhibit the peak of expertise and authority in their ﬁeld. In 2024, this distinguished program consists of more than 50 honorary members.

In 2024, we signiﬁcantly invested in a new digital suite of talent management solutions that are tailored to the different stages of an employee's career, from the initial hiring and onboarding process, all the way to retirement. This is supported by on-demand videos and workshops to help develop each employee's knowledge and skill set, along with coaching and consistent feedback to help them succeed and advance in their careers. We also launched a new suite of self-directed employee development tools which provides a signiﬁcant step forward in our commitment to fostering continuous learning and professional growth within our organization.

At the same time, new IT systems provide our management team with a common interface for employee development which facilitates check-in processes and performance reviews against objectives, and also help in workforce planning, resulting in improved connectivity across our global organization.

In all, our culture and development programs are truly foundational to our success and our ability to continue to deliver strong ﬁnancial results.

Opposite page and top left: Employees nominated to participate in the New Business Leader (NBL) program conclude their nearly 2-year development journey with action learning project presentations to Curtiss-Wright's senior leadership team. Chief Operating Ofﬁcer Kevin Rayment commences the awards presentation (bottom) congratulating the teams on their successful achievements and completion of the program.

Top right: Curtiss-Wright employees, including Sr.

VP and General Manager Brian Perry, brief CEO Lynn Bamford on our comprehensive suite of ruggedized, reliable, and secure COTS solutions that are aligned with key defense industry standards.

Left: The implementation of an enterprise-wide training and development tool creates a roadmap for managing the Employment Development Life Cycle.

It utilizes AI to produce innovative development material, including role-speciﬁc curriculums to increase capabilities and retention, matching the individual's needs and the important roles and practices that the Corporation believes are critical for success.

OUR INVESTMENTS IN ENTERPRISE-WIDE BUSINESS SYSTEMS AND TOOLS ELEVATE OUR OPERATIONAL EXCELLENCE AND DECISION-MAKING ACROSS THE ORGANIZATION.

Since 2021, Curtiss-Wright has made great progress accelerating its Pivot to Growth strategy through our Operational Growth Platform (OGP). We are continuously investing in and implementing new processes, systems and tools to optimize our manufacturing operations, which in turn, is driving margin expansion and savings across the portfolio.

Our leadership teams are focused on our digital transformation, ensuring the right systems are being deployed to help Curtiss-Wright grow, further enabling our businesses to improve quality, drive productivity, increase the ﬂow of information, and enhance our connectivity throughout the organization. We have taken numerous actions that promote higher levels of execution and provide tremendous, almost real-time visibility into our operations, increasing efﬁciency and agility in how we manage the overall business.

We are modernizing our systems and tools to accelerate commercial and operational excellence. We are upgrading Enterprise Resource Planning (ERP) software applications to enhance the depth and efﬁciency of our operational execution, along with Enterprise Performance Management (EPM) systems that create common value streams for key management process, feeding enterprise-wide KPI dashboards to enhance management control. We deployed a uniﬁed Customer Relationship Management (CRM) tool to introduce more standardization into our selling processes, creating a common language to better track business opportunities, improve collaboration, and provide enhanced metrics and analytics. Our focus on Human Resource Management led to the consolidation of 21 separate systems down to a single, common interface to create a modernized and comprehensive approach to global workforce management and talent development. Finally, we are investing in robotics and automation, as well as shop ﬂoor digitalization, including AI-based software in support of real-time inventory and supply chain management.

To ensure that our operations are driving operational excellence and growth, we have implemented continuous assessments at our facilities to measure our performance in each element of the OGP and capture best practices taking place across the organization. The evaluation includes various criteria such as business strategy, innovation, commercial excellence and top quartile ﬁnancial performance, as well as critical assessments of safety and risk, which provides a standard roadmap for improvement across our businesses. Executive oversight of the program has led to the approval of awards that recognize excellence via Gold, Silver and Bronze certiﬁcations.

As we look to the future, we will fuel the next leg of our operational growth journey through continued investments and maturing processes that promote growth and efﬁciency across our manufacturing, sales, and ﬁnance operations.

Curtiss-Wright frequently evaluates the investment in and deployment of low-cost robotics and automation to drive increased efﬁciency and quality, including opportunities for signiﬁcant reductions in processing time, across our divisions & manufacturing sites.

Disclaimer

Curtiss-Wright Corporation published this content on March 27, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 27, 2025 at 13:58:04.939.