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Curtiss-Wright Completes Acquisition of WSC, Inc.

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Curtiss-Wright acquires WSC, Inc. for $34 million, enhancing its portfolio with state-of-the-art simulation technology for nuclear power plants. WSC's $15 million sales in 2023 are expected to boost Curtiss-Wright's earnings and free cash flow. The acquisition aligns with Curtiss-Wright's focus on advanced nuclear technologies and supports long-term growth objectives.
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The acquisition of WSC, Inc. by Curtiss-Wright Corporation represents a strategic expansion within the power generation and naval sectors. The transaction, valued at approximately $34 million, is not just a capital allocation but a step towards enhancing Curtiss-Wright's product offerings in nuclear simulation technology. The deal is expected to be accretive to Curtiss-Wright's earnings, which is a key indicator for investors as it suggests potential for increased profitability.

WSC's simulation and digital twin capabilities are particularly noteworthy as they align with industry trends towards digitalization and optimization of power plant operations. This technology is critical in reducing risks and costs associated with the commissioning and operation of nuclear plants. The mention of a free cash flow conversion rate in excess of 100% is significant, indicating efficient operations and the potential for shareholder returns through dividends or share buybacks.

Furthermore, WSC's involvement with TerraPower and its contract to support the Natrium reactor project underlines the relevance of WSC's technology in the development of Advanced Small Modular Reactors (ASMRs), a growing area in the nuclear industry. This could position Curtiss-Wright favorably in a niche but expanding market, potentially leading to long-term growth opportunities.

When evaluating the financial implications of Curtiss-Wright's acquisition of WSC, it is important to consider both the short-term and long-term perspectives. In the short term, the market will likely focus on the immediate impact on earnings and cash flow. The acquisition is expected to be accretive, excluding first-year purchase accounting costs, which may result in a positive reaction from investors. Additionally, the strong free cash flow conversion rate suggests that the acquisition will not strain Curtiss-Wright's liquidity and may provide additional capital for future investments or shareholder returns.

In the long-term, the strategic value of the acquisition comes into play. WSC's 225 plant simulators installed base and its proprietary 3KEYMASTER™ simulation platform provide a competitive edge. The ability to enhance the design and operation of nuclear power generation and process plants, including involvement in cutting-edge ASMR projects, positions Curtiss-Wright to capitalize on the nuclear industry's evolution. Investors should monitor how effectively Curtiss-Wright integrates WSC's offerings with its existing portfolio and whether this translates into sustained earnings growth and market share expansion.

The energy sector is undergoing significant transformation with a focus on modernization and efficiency. Curtiss-Wright's acquisition of WSC taps into this trend by enhancing its capabilities in the nuclear power sector. WSC's simulation technology is important for training, design and operation of nuclear facilities, which are areas of high regulatory scrutiny and operational risk. The mention of WSC's contract with TerraPower highlights the importance of simulation technology in next-generation nuclear projects, such as the Natrium reactor, which is a collaboration between TerraPower and Bill Gates.

This acquisition also underscores the importance of digital twin technology in optimizing plant performance and reducing costs, which is a growing area of interest in the energy sector. Curtiss-Wright's ability to offer comprehensive solutions, including digital safety systems and advanced condition monitoring technology, could give it a competitive advantage in bids for new projects and service contracts. The impact on the business could be substantial if Curtiss-Wright successfully leverages WSC's technology to secure a foothold in the burgeoning market for advanced nuclear reactors.

A Leading Global Supplier of Power Plant Control Room Simulation Technology to the Commercial Nuclear and Process Industries

DAVIDSON, N.C.--(BUSINESS WIRE)-- Curtiss-Wright Corporation (NYSE: CW) today announced that it has completed the acquisition of WSC, Inc. for approximately $34 million in cash. WSC is a leading provider of state-of-the-art simulation technology that supports the design, commissioning, and reliable operation of commercial nuclear power generation and process plants worldwide with an installed base of over 225 plant simulators.

WSC generated sales of approximately $15 million in 2023 and is expected to be accretive to Curtiss-Wright's adjusted diluted earnings per share in its first full year of ownership, excluding first year purchase accounting costs, and produce a strong free cash flow conversion rate in excess of 100%. The acquired business will operate within Curtiss-Wright's Naval & Power segment.

“The acquisition of WSC increases the breadth of Curtiss-Wright’s portfolio of advanced commercial nuclear technologies utilized in the modernization of existing power plants and design of new power plants such as Advanced Small Modular Reactors,” said Lynn M. Bamford, Chair and Chief Executive Officer. “The combination of WSC's solutions, including their simulation and digital twin capabilities, with Curtiss-Wright's digital safety systems and advanced condition monitoring technology, will benefit our customers developing advanced reactors as well as those optimizing any power or process plant designs. The acquisition also supports Curtiss-Wright's financial objectives for long-term profitable growth and strong free cash flow generation.”

WSC’s proprietary 3KEYMASTER™ simulation platform is used in their nuclear full scope simulators that are mandated by the Nuclear Regulatory Commission (NRC) and remain integral to reactor operator training and licensing. Simulation assisted engineering tools optimize the design and commissioning of plants, to include Advanced Small Modular Reactors (ASMRs), by creating a digital twin of plant components and systems to reduce risk, accelerate delivery, and improve quality at a lower cost. In 2023, WSC was awarded a contract by TerraPower to support the design and development of the Natrium sodium fast reactor, and continues to contribute to the development of other leading ASMR platforms. In addition, generic simulators are used at universities, regulatory agencies, training centers and plants to offer classroom-based training on the operation of nuclear plants under normal and abnormal conditions. WSC’s simulation capabilities have also proven beneficial for U.S. Navy nuclear design agencies and shipyards to enhance the design process of nuclear systems and components for aircraft carriers and submarines. WSC, which was founded in 1995 and employs approximately 45 people, maintains operations in Frederick, MD.

About Curtiss-Wright Corporation

Curtiss-Wright Corporation (NYSE: CW) 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 8,600 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, headquartered in Davidson, North Carolina, has a long tradition of providing innovative solutions through trusted customer relationships. For more information, visit www.curtisswright.com.

This press release contains forward-looking statements made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 that are based on management's beliefs and assumptions. Such statements, including statements relating to Curtiss-Wright Corporation's expectations for the future opportunities associated with the acquisition, the success of transferring WSC’s technology throughout our existing world-wide network, and the success of the Company integrating WSC into its Naval & Power segment are not considered historical facts and are considered forward-looking statements under the federal securities laws. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Such risks and uncertainties include, but are not limited to: a reduction in anticipated orders; an economic downturn; changes in competitive marketplace and/or customer requirements; a change in US government spending; an inability to perform customer contracts at anticipated cost levels; and other factors that generally affect the business of aerospace, defense contracting, marine, electronics and industrial companies. Please refer to the Company's current SEC filings under the Securities Exchange Act of 1934, as amended, for further information.

Jim Ryan

(704) 869-4621

jim.ryan@curtisswright.com

Source: Curtiss-Wright Corporation

Curtiss-Wright acquired WSC, Inc. for approximately $34 million in cash.

WSC, Inc. generated sales of approximately $15 million in 2023.

The acquisition is expected to be accretive to Curtiss-Wright's adjusted diluted earnings per share in its first full year of ownership.

The acquired business will operate within Curtiss-Wright's Naval & Power segment.

WSC's proprietary 3KEYMASTER™ simulation platform is used in their nuclear full scope simulators mandated by the Nuclear Regulatory Commission.
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About CW

curtiss-wright corporation is a diversified, multinational provider of highly engineered, technologically advanced products and services. we are the corporate descendants of the wright brothers, the fathers of flight, and mr. glenn curtiss, the father of naval aviation. in 1929, the companies founded by these three great aviation pioneers merged to form the largest aircraft company at the time, curtiss-wright corporation. today, we design and manufacture highly engineered, advanced technologies that perform critical functions in demanding conditions in the commercial, industrial, defense, and energy markets, and have operations in the united states, the united kingdom, canada, and internationally. we are listed on the new york stock exchange and trade under the symbol cw.