Good day, everyone, and welcome to the Curtiss-Wright Corporation first quarter 2008 Earnings Call. Just as a reminder, today's call is being recorded and will be hosted by Martin R. Benante, Chairman and CEO of Curtiss-Wright; and Glenn E. Tynan, Vice President and CFO. This call will be in a listen-only mode while the company presents its recent financial results and then the company will take your questions. I'd now like to turn the conference over to Mr. Martin Benante. Please go ahead, sir.

Thank you, Christina, and good morning, everyone. Welcome to our 2008 first quarter earnings conference call. Starting off forum today will be our CFO, Mr. Glenn Tynan.

Thank you, Marty. If you do not have a copy of the earnings release, which was issued yesterday, please call Ms. Deborah Torrey at 973-597-4712, and she will be happy to email or fax a copy to you and add you to the Curtiss-Wright distribution list for all future press releases. Before we begin, please note that we will make certain forward-looking statements on today's call such as statements about the company's confidence and strategies or expectations about the results of operations, future contracts or market opportunities. While we believe that our operating plans are based on reasonable assumptions, we cannot guarantee that we will meet any expectations that might arise from these forward-looking statements or their underlying assumptions. Such forward-looking statements are made pursuant to the Safe Harbor provisions of the Security Reform Act of 1995 and involve risks and uncertainties that may produce results or achievements that are materially different from those expressed or implied during this discussion. Such risks and uncertainties include those factors that generally affect the business of aerospace, defense, electronics, marine and industrial companies. Please refer to our SEC filings under the Securities and Exchange Act of 1934 as amended for a more thorough discussion of risks and uncertainties as well as further information relating to our business. For our agenda today, I will provide an overview of Curtiss-Wright's first quarter 2008 operating performance, and then Marty will discuss our strategic markets and full year outlook. After the formal remarks, Marty will open the call for questions. So, let's get started. Curtiss-Wright had consolidated sales of $433 million during the first quarter of 2008, an increase of 30% over the first quarter of 2007, including 10% organic growth. Our organic sales growth was driven by contributions from all three segments led by our Motion…

Thank you, Glenn. I am pleased to report solid performance in all of our markets during the first quarter and a very strong outlook for the balance of 2008 and beyond. We are experiencing double-digit growth in each of our major markets with the exception of naval defense, which is primarily the result of contract timing. Our aerospace defense market was up 11% year-over-year, primarily related to higher sales on the Global Hawk, increased helicopter volume, and particularly the Blackhawk, and increased Embedded Computing sales across all of their markets. Ground defense sales were up 36% led by significantly higher sales on the Bradley Fighting Vehicle as well as increase in the Stryker program. Our naval defense sales were up a solid 5% mostly due to the ramp up of the DDG-1000 program, which is slightly offset by lower aircraft carrier and submarine sales as we near completion on the current contract. In April, we received initial orders for the next two Virginia Class Submarines, reflecting the [long-lead] materials for the increased production of submarines from one to two per year commencing in 2009 for Curtiss-Wright. This is truly a noteworthy event in the shipbuilding industry, which combined with multi-year procurement program will generate significant growth for Curtiss-Wright in a market known for its long-term stability. In March, we announced the contract for a helicopter handling system to be integrated onboard on the next generation's Japanese Destroyer program. This is a terrific program for us in that we have continued to successfully achieve the technology currently in operation with the Japanese, Canadian, US, Australia, Spain and Taiwanese navy. We anticipate our system will become standard equipment on all new Japanese Destroyer class, which is expected to include four ships over the next five years. In addition, just this week, we…

(Operator Instructions) And our first question will come from Myles Walton with Oppenheimer.

Thanks. Good morning.

Hi, Myles.

Hi, Myles.

I see, Myles, you are trying to get rid of me.

A long wait.

You mind if I finish up the call before I clear up my desk.

Only if you smile for the next annual report.

That's a deal.

That was a good one.

Just when you come in, because I know you are [rating] your presence at our controllers meeting, please don't talk about succession planning.

So, on the last call, we tackled the hedging program by the end of fourth quarter and I guess again here in the first quarter kind of [eating] in maybe 60 basis points. Is there any way that the hedging program is starting to take hold and neutralize maybe the headwinds you might face in the proceeding nine months or what exactly are you building into your expectations for Forex for the rest of the year?

Well, two things. The one thing is you're referring to the translation adjustments. We are hedging transactions. So, let me just break those through. On a transaction basis, you may not have noticed, but in our corporate and other line, there is about $1 million of net FX and hedging gains, yes, gains in the first quarter. It went the opposite way in the fourth quarter last year, but reversed itself here in the first quarter. That time, both forecasted and actual transactions, the translation is somewhat of a different issue. So, we are hedging the actual cash transactions. Okay?

Okay.

Translation is something that's a little bit rougher to give, but we do anticipate two things. And in terms of translation, we expect those rates to change throughout the year, so expecting it to reverse throughout the year. That's our current forecast for the change in the rates. It's not going to completely reverse, but we're forecasting the translation issue to get better, and specifically in controls for the remainder of the year.

Okay.

We hope to see that reverse. The $1 million gain, you know, that swings a little bit. So, our objective on the hedging program is to be neutral, so that we don't really have to talk about it. That's the objective of any hedging program. So, we have some successes and some not so successes, but --.

Okay. So net-net, it was $1 million, the Forex, the Canadian Looney was a million bucks headwind in the quarter, $2 million headwind in the operations and $1 million-plus in the corporate?

About $1 million in the corporate.

Okay. And if you look back to your last conference call, you are kind of thinking $0.42 to $0.43 here in the first quarter. What in addition to that hedging benefit was in corporate that may have been a surprise or were there other surprises across the business that drove the better EPS results in the quarter?

It was better results in the operations. Obviously, we had, looking at a down first quarter, because startup of our China program. Whereas we were talking material in, we associated very little profit with that. And obviously as we are right now manufacturing that contract, you'll start to see improvement in profitability. But the biggest thing is we received very good returns from embedded computing, sensors, valves. So --.

Okay. So the margin what you saw in the first quarter across the segments, that wasn't surprising to you and you are not backing off from kind of the full year margin guidance?

As a matter of fact, we thought it was better. We thought our first quarter margins were better than we anticipated. And by no means are we backing off our guidance for the year.

Great. And then in terms of the China work, maybe it was $12 million in the quarter. Is that about right?

It's correct.

And so, I guess without that, Flow Control was flat, but you had oil and gas at 12% growth. So, nuclear may be down double digits?

May be nuclear is right now about 6% down here, but close to about the 10%.

Okay. So does that reverse this year?

No, it actually reverses next year. We said in the last call that this is the lowest add that we will have. And we'll start getting our contracts for the multi-year procurement for the submarines at the end of this year, and you're going to see a much different picture in 2009 as far as the naval sales are concerned.

Okay.

It's just the timing.

And with respect to the bookings, usually 1Q is your strongest. From your opening comments, Martin, it sounded like 2Q might turn out to be your strongest for the year. Is that a correct assessment or --?

That's correct. While we seem to have just got a good query of orders, inspect, we expect that some of them last quarter. Now, as I indicated, we are now currently negotiating for our blanket order for pumps for the [wealthy] United States. And we expect an order in second quarter on that so.

And that's 24 pumps?

No. The things is there is a blanket order for 24. It could be all the 24 or in excess of 24.

Okay. And there are about 10 million of pumps. Is that right?

They are close to about 15.

Good to see the prices going up. Let me see if there is anything else. No, I think that's it. I'll get back in the queue. Thanks.

All right. Thanks, Myles.

And our next question will come from SunTrust Robinson, Chris Donaghey.

Hi. Good morning, guys.

Hi. Good morning, Chris.

Martin, I wanted to talk first of all on the seasonality expectations for the year. I think on the last call, you said first quarter was going to represent somewhere around 15% to 16% of 2008 earnings. Now, what are your expectations for that now after this very strong first quarter?

Well, we're going to maintain the same 40% to 60% split, which says that we would be taking something out of the second quarter, since we're not raising guidance at this point in time.

Okay, great. And second of all, on the Global Hawk, what is your content on the Global Hawk in the shipset value?

Certainly about $500,000.

Okay. And then last thing, and I apologize I missed this, what did you say your bottom valve percentage market penetration is?

32

32. And what's the production capacity of coke deheading valves currently and are you increasing that?

We have been increasing that steadily over the years. Obviously, that business segment is close to $100 million and growing. And it's probably about five or six years ago. So, we've always been increasing our capacity for building valves. Most of that is outsourced. We do more of the assembling and test. So, our ability to increase utilization or capacities are easy.

Okay, great. And I think you also said 700 coke drums worldwide. Do you have any kind of projection for new capacity volume?

Yes. There is going to be about 50 more that will be built over the next five years.

Okay, great. Thank you.

Thanks, Chris.

And our next question will come from Tyler Hojo with Sidoti & Company. Tyler Hojo - Sidoti & Company: Hi. Good morning, guys.

Hi, Tyler.

Good morning, Tyler. Tyler Hojo - Sidoti & Company: A quick question just in terms of the segment guidance you provided during the fourth quarter conference call. Does that also stand?

Yes. Tyler Hojo - Sidoti & Company: Okay. Just in terms of both revenue and margin?

Yes.

Yes. Tyler Hojo - Sidoti & Company: Okay, great. And if you wouldn't mind, the backlog by segment as well?

Yes. Controls, $524 million. Tyler Hojo - Sidoti & Company: Okay.

Flow control, $793 million. Tyler Hojo - Sidoti & Company: Right. And the balance? Okay.

About $100 million I may say. Tyler Hojo - Sidoti & Company: Okay. And just in terms of the press release, I just want to understand this. Was 81,000 kind of how you were expecting both in terms of revenue and margin or was it a little bit worse?

No. Exactly what we expect whenever we have accrued sales in any of our contracts. As you take material and we do not associate much profit with that. The more risks that we encounter and steer through, the more profit we take. What you are seeing is an aberration of having the first large contract. And normally what will happen is, as you get follow-on contracts, you will get an averaging of that. All programs are going to start out with very low profitability, very low cash flow. And we have built themselves up to a point where you ship them. And as you expect more contracts to come on, later on it will get an averaging effect, but right now you are seeing as the aberration of the large contract at the bidding of its sale. Tyler Hojo - Sidoti & Company: Okay, great. And just a follow on to that. It seems like having said that kind of the guidance that you provided during your Investor Day in '07 in regards to AP1000 still stands, is that right?

I think when all is said and done that that will be a conservative estimate of what we said at our Investors' Conference. Tyler Hojo - Sidoti & Company: Great. All right, thanks.

Thanks, Tyler.

Bye, Tyler.

And our next question will come from Stephens Company, Eric Hugel.

Hi, guys. How are you doing?

Hi, Eric.

Hi, just dive a little deeper into this US AP1000. You said you are expecting to sort of secure that order in the second quarter, correct?

That's correct.

And sort of after you actually secure an order, what sort of the timeframe as to when you would actually start to recognize revenue on this stuff? Pretty quick?

We are going to start recognizing revenue probably by the end of the year, but very little for material receipts. We'll really start getting into in 2009.

Okay. And if it that's the case, you are working through the startup cost now on the China stuff?

Right.

Would you be that far ahead of the game in terms of, because you are already doing a lot of learning curve building here, as you start building the US pump, there should inherently be higher margin than what you are seeing. You shouldn't see as big of a hit, right?

No. because what's happened again, when we start out the contract, we are going to get a lot of material receipts. So it's when you start to manufacture. It's when you start to build up that profitability. And once we have the contracts and the delivery dates, we will be in better position to go through and update probably what we did at the investors' conference. But this will be the first log of what we will get from U.S. There are a lot of orders or companies that are lining up. It's kind of like an airplane rollout. Nobody wants to be first, but then nobody wants to be last. So, we expect a flurry of activity this year in excess of what we anticipated or projected at our investors' conference.

Yes. If I remember correctly you had about $10 million of revenues in '09 projected in for China. I mean that looks extremely conservative.

You are using the word extremely.

Well, okay, I'm sorry. I know that that's not good. Well, nicely conservative.

Yes, seriously, very nice.

With regard to your Metal Treatment business, it looks like you are looking at 21% margins in that business and you said you weren't sort of changing that.

Right.

This quarter was pretty low. It looks like you had a lot of startup costs in that business. I remember you talking about building the China plant. Can you sort of quantify what that impact is?

The impact of two-tenth of 1%, but I think the other items is that our new laser business, as we talked about previously, is going to start up, and it was a little bit in the lower sales volume in the first quarter. The other thing is there was a strike by one of our major customers that put a damper on some of our automotive sales. Once they come back from strike, that will help the situation out. So you'll see improved returns as time goes on.

You talked about on your laser peening business one customer winding down. I thought your major customer was up until you started winning all these orders was pretty much Rolls Royce?

Yes. And when I say it was winding down, it's a lot of the refurbishment of engines or fan blades that were out in service.

Okay, so they are just working through their backlogs there?

That's correct.

Okay. Hey, Marty, I got on a few minutes late. May be I missed it. But can you walk us through your guidance here for the year in terms of by market? I think you said what you were looking for and what you did in the quarter. Did you go through the markets for what you are expecting for the year?

Yes. Eric, it's Glenn. I think defense overall, we are looking at 4% to 5% for the year. That was our guidance. I mean obviously we are higher in the first quarter. We had a good start on that. Commercial aerospace, about 10%; oil and gas, mid-teens. Power generation could be in the 30% plus. And those are our major markets.

Okay. And lastly, and then I'll get back into the queue, I think BP and Aramco are talking about like $7 billion refinery capacity expansion down in Texas. I mean is that something that we should think about that sort of a prime opportunity for you guys? And could you also may be address in terms of the coker business sort of competition coming into that market?

Yes. Obviously, oil refineries have coking, cat cracking offers opportunity for us. Yes, we do have a competitive [indiscernible] to market. They have received some business. But overall, it has not disturbed out growth or where we think we are going in the marketplace.

Great. Thanks.

Thanks, Eric.

(Operator Instructions) Our next question will come from Jim Foung with Gabelli & Company.

Hi Jimmy. How are doing? Jim Foung - Gabelli & Company: Good. Good morning. How are you?

Hi, Jim. Jim Foung - Gabelli & Company: Martin, I guess when looking at the margins, were there any kind of one time items that impacted margins in the quarter that won't be repeated later on?

Well, the thing is a lot of it is China and some of it is timing. Let me bring you through a couple of them for instances. When you look at Motion Control, first of all, that impacted about 130 basis points. So, they would pretty much be on par with last year. There are a couple of things that took place, and they have Drive Technology to company in Switzerland. We supply marine valves to -- was management, and that was bought for managements and sold to their customers. But we now have a direct channel to Korea and that actually delayed our new water for that. The other thing is that we've just signed a large contract with South Africa that we were expecting in the first quarter. So, there is a company that won and had a good first quarter last year. Actually this quarter, they lost some money, but we are going to make up all the distance of billing our annual plan between now and the end of the year. The other thing is in the marine defense business out of Motion Control. We had a very good first quarter last year. We didn't have as good as first quarter this year, and we just signed some new contracts for their equipment that we had expected a little bit earlier. So there, it has started ramping up and improved their sales and profitability next year. Flow Control, we talked about China. We actually have a second Chinese award for airlocks. They're for a different plant, but the same phenomenon takes place. And that is, we have material input that has come in, and we will be making those airlocks and shipping them out by the end of the year, which we'll gain good additional profitability from. So, that's basically the reasoning for our guidance and where we are with the first quarter. And then some of it is just timing and some of it was anticipated. Jim Foung - Gabelli & Company: So, I guess with that kind of a sense of your slow business, but what gives you confidence that you'll be able to make your guidance for the full year, because a lot of this is timing coming out in the second half of the year? Will you see some of the fruits of these contracts?

Yes, without a doubt. We already have the contract. So, it's not like we are anticipating something to take place. Now it's just a matter of execution. Jim Foung - Gabelli & Company: Right. So you see the profitability coming more in the back half then? Okay.

Without a doubt. Jim Foung - Gabelli & Company: Okay. And then just one other question in terms of this blanket order, I think you talked about that in the investor conference. Could you just refresh? What do you think is the ramp rate as you start shipping in '09? What do you think the ramp rate in that blanket order might be?

It's going to be too depending on the quantity. And when we get the contracts, we will go through that. I don't really, Jimmy, want to speculate right now. There is a lot of things that are taking place. So anything I said today will be past history, coming in a very short period of time. I'd rather wait until we are granted the contract, so we can come out and go through it in a much more thorough atmosphere. Jim Foung - Gabelli & Company: Okay. Fair enough. I'll come back to you when it comes out then.

I'm sure. Jim Foung - Gabelli & Company: All right. Thank you.

Bye, Jimmy.

And our next question will come from Lord, Abbett's Steven Wortman. Mr. Wortman, your line is open.

Good morning.

Hi.

Bob Fetch actually.

Good morning.

You mentioned the content on the nuclear side for foreign AVs and you have specifically mentioned Japan. What the content might be and number of ships that they are thinking about building ship, in a number of ships that they are thinking about building?

Japan is going to be a total of 10. It's about $7 million of copy for that system.

And what sort of timeframe are they looking to build the ships in?

Over the next 10 years.

Okay. Can you update us on the restraining systems for aircraft carriers, whether their retrofit is up to start yet?

There is not going to be a retrofit on the (inaudible).

Yes.

Okay. That has not started right now, because of the funds being shipped over to Iraq. That's probably not going to start for a little while.

Does that suggest years or months?

Years.

Okay. Thank you. Can you update us on your thoughts and projections for CapEx and depreciation?

That (inaudible) we do not anticipate it having in our systems.

Okay. Thanks. And CapEx, depreciation that's your next,

CapEx, $115 million, which includes $40 million for our expansion in Pennsylvania; and depreciation and amortization, about $87 million approximately, $87 million to $90 million, somewhere in that area.

Okay. And will the requirement likely go up on the CapEx next year as some of the nuclear orders coming the door?

We don't expect it to. I mean right now, that $40 million is a little tail-off into '09, but we should come back down in '09. Let's forget all kinds of great orders, we have to build more facility, but I mean that's what we are expecting. The $40 million is our largest incremental year.

And granted on the peening side, you're expecting to see some nice growth on the aerospace side. Would you expect automotive though to grow over the next three to five years?

The thing is that even though there hasn't been growth in the industry, we continue to get more work per car. I don't see that growing really over the next five years.

Okay. Thanks.

At this time, there appears to be no further questions in the queue. (Operator Instructions)

Okay. Well, thank you very much for joining us today. And please a reminder for those of you who have not already RSVPed for the Embedded Computing facility tour can may please do so. I think it will a great opportunity to get a first hand look at our vast array of products, customers and programs. In addition, we look forward to our second quarter conference call in July. Thank you very much. Take care.

That does conclude our teleconference for today. We like to thank everyone for your participation and have a wonderful day.