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.
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.
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, 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