Curtiss-Wright at 45th Annual William Blair Growth Stock Conference: Strategic Growth Focus

On Wednesday, 04 June 2025, Curtiss-Wright Corporation (NYSE:CW) presented at the 45th Annual William Blair Growth Stock Conference. The company emphasized its strategic pivot to growth, initiated four years ago, which builds on past successes and positions it for future expansion. While the tone was largely positive, executives acknowledged the challenges of balancing external market opportunities with internal improvements.

Key Takeaways

• Curtiss-Wright aims to exceed a 5% organic sales growth CAGR, excluding new reactor coolant pump orders.
• Operating margin is targeted at 18.4% for the current year, with an EPS growth goal of 10% or greater CAGR.
• The company is investing in technology and talent to drive long-term profitable growth.
• Curtiss-Wright is expanding its presence in the naval, defense electronics, and nuclear sectors.
• Recent acquisitions and share buybacks reflect a balanced approach to capital allocation.

Financial Results

• Curtiss-Wright expects to generate 1.3 billion dollars of free cash flow over three years.
• The company has seen mid-teens double-digit earnings growth, with a focus on margin expansion.
• Two commercial nuclear businesses were acquired for 240 million dollars, enhancing the nuclear portfolio.
• A 250 million dollar share buyback was completed, with increased authorization for future buybacks.

Operational Updates

• The company is a national asset to the U.S. Navy, with content on all major naval platforms.
• In defense electronics, a partnership with NVIDIA aims to bring new capabilities to the battlefield.
• Curtiss-Wright’s nuclear strategy includes partnerships with Westinghouse for Eastern Europe expansion.
• The company is targeting significant content across Small Modular Reactors (SMRs).

Future Outlook

• Curtiss-Wright anticipates the commercial nuclear business to double by 2028, aiming for a 1.5 billion dollar run rate.
• The construction of 10 new large reactors in the U.S. by 2030 presents a billion-dollar opportunity.
• The company plans to focus on acquisitions, operational investments, and shareholder returns.

Q&A Highlights

• Executives expressed confidence in exceeding the 5% organic sales growth target.
• Strong performance is noted in defense markets, driven by defense electronics and foreign military spending.
• Poland and Bulgaria are leading the charge in the AP1000 buildout in Eastern Europe, with significant opportunities.

In conclusion, Curtiss-Wright’s strategic focus on growth and innovation positions it well for future success. For more detailed insights, refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Unidentified speaker: Nice full room.

Louis DePalma, Equity Research Team, William Blair: Good morning. I’m Louis DePalma. I cover aerospace and defense on William Blair’s equity research team. This is the second day of the forty fifth annual William Blair Growth Stock Conference. We’re pleased to be hosting a presentation with a few questions at the end, with Curtis Wright’s management team.

Joining me today are CEO, Lynn Bamford, CFO, Chris Farkas, and head of investor relations, Jim Ryan. I’m required to inform the audience that a complete list of disclosures and potential conflicts of interest are available on our website at williamblair.com. Lynn will provide an overview of the business, and then we’ll have a couple of questions. So, Lynn, thanks for being here, and please take it away.

Unidentified speaker: How do I advance the slides? Sorry. I’m, like There’s the zipping in last minute. The clicker. This?

Okay.

Louis DePalma, Equity Research Team, William Blair: I think that should work.

Unidentified speaker: So good morning, everyone, and thank you for the invitation and the chance to be here again, for the second consecutive year. So, it’s my pleasure to have a chance to speak to you today about a lot of really great things going on within Curtiss Wright, and I know there’s probably I see some familiar faces I know I’ve talked to before, and so a lot of familiarity with the company and some people that probably aren’t. So I’ll try and strike a balance to make this relevant for everybody. I’m obligated to say today’s presentation will contain some forward looking statements that contain risks and uncertainties. These are outlined on our website.

Check for Jim. I’ve accomplished my goal there. So what are the big messages today? The you know, we launched our pivot to growth strategy four years ago, and it really was building on a lot of years of success in the company and making the company well positioned to really start to focus on growth as a corporation. And so I’m the recipient of a lot of work for a lot of years that I’ve been with the with the company well over twenty years, participated in, and really fortunate to become the CEO at a time where we could take this inflection point and begin to focus on growth, and it’s definitely working.

And as you can see from our results, we are very much building momentum in this area. Over the past four four years, something that I think is very important is as much as we’ve invested, and we talk a lot and we will today about the technologies, our end markets, how we’re positioning ourselves competitively in those end markets, we very much equally put focus on how we manage ourselves as a company and the structures inside of the company, how we develop talent, how we attract talent to assure that we’re setting the stage that we will be a successful supplier delivering on that growth that we’re winning. And that’s an important part, I think, that is driving the operational success in the company is, you know, we’re paying attention to both both sides of that equation. And during that time, we’ve continued to drive strong financial results, and you can see that by, you know, looking at some of our recent earnings calls or possibly looking back at, our Investor Day presentations, you know, our first one in 2021 and then May of last year and how we’ve put forward financial targets and have a track record of achieving those financial targets that we put forward.

The 50,000 foot view of the company, we, celebrated our ninety fifth year of, being traded on the New York Stock Exchange and got to ring the bell last summer. That was fun and, kind of a good celebratory time across the organization. And, I think the importance of that 95 is that in many of our end industries, we have been in the industries since the inception of those industries, and we’ll talk more about some of those. But whether that’s obviously the legacy of the Wright brothers, and hence the name Curtiss Wright, Glenn Curtiss and the Wright brothers, so since the inception of aviation. But the inception of Navy nuclear, commercial nuclear, the defense cost industry, many other parts of avionics that have developed over the years that, you know, we have built, you know, history and knowledge of industries.

And with that, you know, we’ve grown to, you know, a company that does service diversified end industries. But the thing that stitches us together is across all those industries, we very much focus on products that are highly engineers, you know, very specialized capabilities that perform and must, you know, not fail applications where the performance is in most cases safety critical to the people in those environments. And so we like those challenges. We specialize in those challenges. We’ve honed our capabilities on how we assure we deliver quality and produce products to the standards of those industries.

We’re just under 9,000 people at this point in time, of which about 2,000 are engineers. So we have a very strong engineering workforce. One of the things we’ve done over the past several years is really figure out how to help empower the engineers to collaborate better across the organization and know that skill set that exists within the organization and bring it bear to take the technologies we build for one end market across multiple end markets. And that aspect has been, know, key to some of the margin expansion we’ve been able to drive. This is sort of a summary of, you know, what I just mentioned about the things that we are doing inside of the company.

We launched our operational growth platform, you know, hand in hand with the pivot to growth, and I think this really shows the balance of focusing externally on where we can grow and making sure we’re doing the things inside the company to maximize the profitability of that growth. And whether that’s thinking about things like commercial excellence on top of operational excellence and supply chain excellence, that these are all programs we put in place that we make sure we’re bringing the best practices from the individual businesses across the corporation, across the entire corporation and really bringing up all the businesses that are within the organization. So it’s it’s been a great program that’s been part of, you know, the great success we’ve had where, you know, over the past, you know, four years, we’ve grown our r and d investments above our sales growth, which has been very strong. And during that time, expanded operating margin with a nice significant extension this year that is in our current guidance. And with that, you know, it has allowed us to really deliver compounding earnings growth in in the mid teens that, you know, we believe we can carry forward while generating great free cash flow.

The underpinnings of the pivot to growth strategy and how we think about it from a business model standpoint is fairly straightforward, but it’s really, I think, in how you execute on it that makes, the strength of Curtiss Wright that we continue those programs where we’re continually looking for how we can drive cost efficiencies in the business. We’ve a current consolidation program that’s going on that some people ask you why do you do that when you’re delivering such great results, and it’s really just who we are as a company. We don’t ever stop looking at ourselves for areas that we can drive efficiencies in the business and just tackling those things. And we take those efficiencies and we’ve committed to both delivering those to profitable growth to our shareholders by incremental expansion of operating margin, but also pouring those back into the business to build on the positions we have. We’ve done that quite effectively over the past four years, and it’s really resulted in some exciting new capabilities we’re bringing to market across our various end markets.

We’ll turn to those end markets here in just a second. But one of the things before we turn to the end markets is, you know, take a second and talk about, you know, the philosophy for how and the approach we take to how we pick where we deploy our r and d. And this is, you know, a big focus. I believe it’s a very fundamental strength of the company is how we deploy our engineering resources, and that’s both whether they’re internally funded or on customer funded projects about really targeting those in the areas that are gonna drive the best long term profitable growth for the company and really making sure you’re analyzing those. Just because a customer shows up with a check doesn’t mean that that’s the right way to deploy your engineering work force.

And so to do this, we’ve implemented a variety of of strategies from launching our innovation platform which really allows collaboration across the entire x, you know, enterprise around the globe, you know, reaching to every employee, you know, you know, literally across the globe and to be able to see ideas that other people have and share they have or market experiences that could help build on that. And it’s really just, you know, completely, you know, increased the amount of collaboration across the organization. It’s been really great to see that it is not needed to be a push from the top that the employees want to do it. They love to work together across the teams, and they just take it upon themselves to go do these things and pitch in and help each other out. You know, with that, you know, we’ve really, you know, considered how we evaluate the return on investment and other financial metrics for various, investment projects.

And again, you know, we do this at a corporate level. There’s surely a lot of decisions that are driven at the business unit level, and we always want to strike that balance where we leave decisions down in the businesses to assure we’re remaining nimble in those businesses, but also making sure we target the biggest, most important investments and make sure we fund those as a corporation. As we think about those investments, you know, I wanna touch on a couple of things across three of the, secular growth trends in some of our key markets and then how we think about those investments and targeting those across both the near term, the mid term, and the long term because it’s very important that you know, with a ninety five year history, you you have to be planning for, you know, next year’s success, the back half of this decade’s success, but success out in the twenty thirties and twenty forties. And we very much manage that com the company in a manner to assure we’re gonna be, you know, here for many, many years to come continuing to grow market share and deliver value to our customers.

And if I, you know, think of, you know, maybe the carbon, you know, the push for carbon free is one of the examples. You know, right now in the near term, we’re making sure we’re doing the things to support the aftermarket and, you know, the extension of the lives on the, you know, commercial nuclear fleet. In the midterms, we’re doing things to make sure we’re ready to build out the large reactors that are are coming as an example. And over the long term, we’re positioning ourselves to be, a critical player across the various small modular reactors. And you can see the examples, whether it’s battlefield technology, things around the electronics we provide, and naval shipbuilding where we’re definitely doing things for, you know, the next couple years, the rest the rest of this decade, and into the next decade to assure Curtiss Wright is gonna continue to just grow as a company.

If I take a second and touch on each of those three end markets, when I think about our our navy footprint, you know, it’s it’s pretty strategically important. And, you know, we have a comment that the team is considered a national asset to our US Navy, and I know that from, you know, relationships we have across the highest levels in the Navy of the importance they see of the work that Curtiss Wright does. And that is our content on really all the major platforms as a critical supplier in the propulsion equipment and critical operating equipment on the various platforms. And again, when I talk about things we’re doing here to build for the long term, we’re very active in building our content for future generation platforms. Specifically, we talked at our Investor Day about SSNx, which will be the follow on to the Virginia sub, and believe that we’re targeting two to three times the content on that platform than we have on the Virginia, which is significant content.

And, again, that’s, you know, a reflection of what the Navy sees as the capability Curtiss Wright has and how we can deliver value on those platforms. Moving to the next area just to touch on for a minute of defense electronics. Again, we’re doing things that, you know you know, very tactical things, releasing new products that are going to secure the future and things that are very much building, you know, for years to come. We launched our partnership with NVIDIA, announced it launched it a while ago, but announced it a couple months ago to bring a whole new capability of products to market to really, you know, build out our electronics capability and take that computing to the tactical edge of the battlefield, which is very much, you know, if you look into the priorities that are in f y twenty six budget, the reconciliation bill were very well aligned with where they want to take the technology in that space. When you think of what Golden Dome will be in the in the networking together of a lot of systems to make them operate in as a a unified capability across, you know you know, various ways to protect the country, many of our capabilities will absolutely be critical players in that place.

So, again, you know, we’ll be at a Golden Dome Industrial Day next year or next week, excuse me, you know, doing things to make sure that we’re positioning ourselves for growth across many of these areas. And, this team also has a very meaningful footprint across Europe. So as, you know, the NATO countries look to increase their spending, you know, well above the 2% that has been the historic goal that, you know, the that eventually, know, many countries have moved towards, We’re very well positioned to, you know, grow on the backs of that and have been already experiencing that growth over the past couple years and see that is continuing to accelerate. Lastly is, you know, touching on our nuclear footprint, which is I know, you know, a big area of interest and something pretty unique for Curtiss Wright of being a company that, you know, you have, you know, a lot of different angles of the nuclear industry, you know, by investing in Us us where our footprint is that, you know, we have the opportunity to grow in. And as I mentioned, know, whether that’s the aftermarket, the plant life extensions, the restarting of nuclear power plants here in Canada, in South Korea, You know, that is, you know, the business that we’ve nurtured for many years and participated in, again, since the inception of that industry and, you know, see great growth in our ability to work with those plants for them to meet those operational needs.

You know, we’ve had a partnership with Westinghouse for many years, and, things seem to be very exciting for them as, you know, the opportunity to build out in Eastern Europe, which we, you know, really focused on in our Investor Day a year ago as being so meaningful for Curtis Wright. And then with the executive orders, you know, challenging for 10 new large reactors being built in The US and under construction by the end of this decade is sure opportunity for Curtiss Wright on top of, you know, the market we sized at our Investor Day that you can find inside of that presentation from last May. And so really there’s so many, you know, things here that are great. When I think about the small modular reactor opportunities, you know, we very much made the focus that we are going to, you know, hopefully be a meaningful partner across all the the larger small modular reactors, all the major players. So regardless of who wins build out, you know, across the globe, it will be good business for Curtiss Wright and we’re doing the team’s done a great job in really, you know, moving towards that.

We’ve targeted our content across the SMRs at anywhere from 20,000,000 to north of a hundred and $20,000,000 in content. So, I mean, this will be, you know, meaningful growth as those reactors, you know, get pushed forward and there’s a lot in the executive orders trying to push the time frames for, you know, when those SMRs will be being able to be built. So that’s that’s another thing that’s very much in the future for Curtiss Wright. You know, we’ve had great growth over the past couple years, but there’s so many things that are still to come that we haven’t really started experience in our revenue growth, and that’s that’s one of the important examples. Turning from, you know, our end markets to the allocation because of both Chris and I and how we, you know, manage the company and think about very judiciously and carefully allocating, you know, what we have within the company that we’ve very much been able to, you know, have a balanced approach where, you know, we’re very purposeful to say acquisitions remain our highest priority for our use of capital.

We have a very good pipeline right now and, you know, hope to be able to continue with some, you know, even more meaningful acquisitions than we’ve execute on to date for for the corporation, but we absolutely will put our capital to work. And whether that’s operational investments in the company or returning capital to shareholders through share buyback, or dividends is very much we’ve very much implemented that over the past handful of years. You can see the numbers here of how the the money has spread and, you know, we’ve just increased at our board meeting a couple weeks ago, our authorization for share buyback. And so we’re looking at the pipeline. We evaluate, the value for doing share buyback and we very much believe we’re still, a very good value and there’s a lot to be had there, so that is still actively something that we are evaluating.

And something that, you know, the financial minds very much want to see is, you know, we very much allocated that capital and delivered very strong ROIC returns for the you know, for our investments over the past four years, you know, delivering, you know, over 400 basis points of expansion. And, again, I think it’s important to note, you know, we’ve done that while increasing our r and d spend, while integrating acquisitions that are, you know, very frequently dilute dilutive and making, meaningful investments in CapEx. You know? So that’s something that we’re pretty proud of as a leadership team that we’ve been able to deliver on. Looking back at the financial targets we put out in our May last year of delivering the 5% organic sales growth over the three year window, and again, very much emphasizing that does not include new orders for our reactor coolant pumps as part of the AP1000 build out.

That is incremental to this and we chose to just leave it out because it can be such a meaningful flashpoint. It skews how you would go about picking the numbers and we really wanna emphasize, we got very solid growth across our businesses, across our various end markets, and, you know, we’re very much focused on growing the entire portfolio and, you know, the the RCP orders are a great thing and will be great for the company when they come, but that’s, you know, we we manage the entire portfolio and assure we’re driving that growth, you know, across the the board and, you know, feel confident that we’ll overachieve on that 5% target over the three year timeframe and deliver on the rest of the financial targets with expanding our operating margins, delivering top quartile performance. You know, we touched mentioned earlier, but, you know, we’re well above the 10% EPS CAGR, you know, and really have been able to compound that, you know, mid double mid teens double digits earnings growth and are continuing on that trajectory, and that’s something that’s very important and delivering on cash flow well over a %. I think it’s important to come back to this slide.

This was in our investor day about a year and a few months ago. And, you know, these are the numbers that we could see at that time based on what we we knew in the industry and how we saw our commercial nuclear business growing, you know, doubling by 2028 and and moving to a 1 and half billion dollar run rate by the middle of the next decade. And really, I think the thing to note here is this this situation has only gotten meaningfully stronger since we put the slide up. We’re not going to talk about new numbers today, but I mean, minimally if you talk about the 10 large reactors to be under construction by 02/1930, that’s an addition billion dollars of potential market share for Curtiss Wright, you know, during that time frame, and that was not contemplated in these numbers that we put forward. So to wrap up, you know, why invest with us?

I think our pivot to growth strategy is working. We are building momentum in our end markets. We’re well positioned with great technologies, great customer relationships. We’re building a company that’s prepared to deliver on the growth successfully for our customers and are very focused on delivering strong financial performance. Thank you.

Louis DePalma, Equity Research Team, William Blair: Great. Thanks, Lynn. And I think on slide, 14, you showed the the three year financial targets that you laid out at the Analyst Day that was roughly almost exactly one year ago today. Can you update us on your progress relative to those 2024 Analyst Day targets? And and circling back, you just made the comment that as it relates to that $1,500,000,000 TAM for Eastern Europe associated with the the the RCPs that today, the opportunity is is meaningfully stronger.

And so can you, provide more color

Unidentified speaker: I’ll ask Chris to talk about the financial targets and then maybe I’ll talk a bit about the Definitely.

Chris Farkas, CFO, Curtiss Wright: Sure. So the first financial target, and Lynn I think covered this very well in her presentation today is related to sales growth and exceeding a 5% organic sales CAGR. We targeted to do across our defense markets a mid to high single digit growth rate aerospace defense, ground defense and naval defense. And if you had taken a look at the FYDPs or international plans for spending, When we were at our Investor Day, you would notice that they were significantly lower than that. So we’ve got some really great things that are kind of going on in the portfolio when touched upon within Defense Electronics.

And then more broadly in trends and increases in foreign military spending and also defense aftermarket that are contributing to meeting or exceeding those growth rates. Commercial aerospace is on a multiyear ramp. We’re heavily OEM focused. So the future is bright in that regard. You saw the eye popping numbers on commercial nuclear.

Lynn will talk a little bit more about those in a minute. If there are two areas where maybe we’re a little bit more challenged, it’s in the process market, but we do have some exciting developments in subsea pump technology that we’re working on right now. They’re going to produce some big returns for the company as we get closer to the end of the decade and it’s a very challenging time in the general industrial market particularly for industrial vehicles. But I do think that the team is doing a solid job there and but that’ll be a little bit more challenging to achieve. But overall we’re on a great growth trajectory from an organic perspective.

The other KPIs that we set for ourselves, we said operating income would grow at a faster rate than sales which implies continued operating margin expansion and that we’d also be in the top quartile for operating margins which for this year for us is 18.4% at the midpoint. Obviously that cultural we have a deep cultural expertise in commercial and operational excellence that’s contributing to that remarkable stability and consistency in performance in that regard. This year we’ll expand our margins another 90 basis points while increasing R and D investments and while covering the initial dilution from our acquisition of Ultra Energy at twelvethirty one. Beyond that, you saw EPS growth an EPS growth target of 10% or greater in a CAGR That we’ve talked about from sales, it’s the margin expansion, but it’s also balance sheet efficiency, tax efficiency and then capital allocation. It’s a very we’re generating close to $500,000,000 of free cash flow this year and it’s very important for us to put the money in the right places to contribute towards that earnings growth.

Just as an example, this last year in 2024, we bought two high quality commercial nuclear businesses for $240,000,000 both under 12 times EBITDA We bought back $250,000,000 of shares and we stayed off of our revolver. So we really have a great balance sheet. And then lastly, I’d just say free cash flow conversion over 105% and we also committed to generate $1,300,000,000 of free cash flow over a three year period. Much like what you saw with the margin expansion over the past decade, we have been consistently above 100% free cash flow conversion. We are very, very focused on ensuring that working capital as a percentage of sales comes down over time.

That’s improving the speed of inventory throughput through our shop and collections. But this year with that $500,000,000 of free cash flow, and you know, two years through our journey generating nearly a billion dollars of cash, we’re well positioned against exceeding that $1,300,000,000 cumulative target over three years. So we’re doing real well and and, building momentum.

Unidentified speaker: Thank you for that. And then touching back on the the second part of your question about the available market. Yeah. There was a lot in the four executive orders. You know, this framed the world as we saw it a year ago, and there was a lot in those executive orders that, really only enhances these numbers.

And, you know, starting with the aftermarket, you know, there was a target of, you know, several hundred gigawatt of upgrades on the current reactors. Again, that is good and drives more aftermarket work for us. So again, for for that portion of our business, which is the dominant portion of the revenue today, that’s a very good directive, talk now of turning two more nuclear reactors, bringing them, you know, back online. That again is very good for us. So that’s in, you know, things that were in there, you know, around the aftermarket.

Obviously, the building was not part of that 1 and a half billion dollars that’s, you know, in the first bullet there. That was that 1 and half billion dollars was really sized fairly conservatively out of only Eastern Europe and declared plants, across various countries there. They’re kind of outlined at the bottom, that has again only continued to take form. Poland and Bulgaria are very much, you know, leading the charge in in a bit of a foot race, you could say, to see who’s gonna have the AP one thousand build out in in Eastern Europe. So that was that 1 and a half billion.

The 10 large reactors in The US, should be an addition additional billion dollars of business for Curtiss Wright, in that portion of the executive. You know, within there, you know, there’s the target to, you know, fourfold increase the amount of, nuclear energy on the grid by 2050, which is, you know you know, just explosive. And, you know, whether that will be more large water large plants than the 10 that are in the executive order, most likely it will, but it absolutely will include a lot of the small modular reactors to be built out across the the country to be able to meet that demand. And, you know, we’re really pleased about the footprint we’re building, you know, whether it’s across Rolls Royce, Xenergy, TerraPower, NuScale, you know, the main players in this area. You know, we have a relationship with Westinghouse on the AP 1,000, which the AP 300 is essentially, you know, a smaller version of the AP 1,000.

So, again, we’re very well positioned across the various providers to be able to provide those. And so, you know, how that, you know, changes that one and a half billion, we need to see how some of these things play out before we, you know, maybe take another refresh of this slide. So, you know, it’s early days, but, you know, really really important moves in the industry for Curtiss Wright.

Louis DePalma, Equity Research Team, William Blair: And the the slide just mentions how Poland and Bulgaria are are in production. Do we know how many plants are being contemplated for those countries?

Unidentified speaker: Yeah. So Bulgaria has declared they’re they’re gonna build two and that’s what their initial contract will be. Poland has stated they want to build six large plants. They’re they’re moving towards contracting three with Westinghouse by the you know, really towards the end of the year and, you know, they’ve really marched through, you know, these are their first nuclear reactors and so there were some you know, skepticism whether they’d be able to hold to the timelines, but they really have in their in their final engineering studies that will go through the end of this year, which is really should be the last step before them, you know, negotiating their contract with Blessinghouse that should lead to our long lead material and, you know, we’ve been, you know, stating that we anticipate getting this first AP 1,000 orders in 2026. So that’s pretty exciting for the company and, again, I’d remind that’s outside of the 5% growth target that we put forward at investor day.

Louis DePalma, Equity Research Team, William Blair: Great. I think we are out of time for the main session. We are going to continue the conversation in the breakout session in the Jenny B Room upstairs in which we will talk more about Poland and Bulgaria. Thanks.

Unidentified speaker: This presentation has now finished. Please check back shortly for the archive.

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