Woodward (WWD) Gabelli Funds 30th Annual Aerospace & Defense Symposium summary

Company overview and business segments

• Manufactures fuel control and highly engineered systems for aerospace, defense, and industrial markets, focusing on controls for fuel, air, oil, combustion, and motion.

• Significant presence in both commercial and defense aerospace, as well as industrial applications like transportation, power generation, and oil and gas.

• Expanded aerospace content through acquisitions, tripling content per aircraft on major platforms.

• Aftermarket and legacy fleet remain strong due to delayed retirements and production lags on new aircraft.

China on-highway business and market dynamics

• Natural gas share in heavy-duty trucks in China rose from 10-15% to 30% due to supply, emissions policy, and fuel price spreads.

• Business rebounded from near-zero to record levels, exceeding $50 million per quarter for five quarters.

• Recent customer destocking expected to reduce near-term demand to $10-15 million for fiscal Q4.

• Business remains volatile, requiring agile supply chain and market visibility.

Aerospace business and content wins

• Key supplier for LEAP and Geared Turbofan engines, with critical components and no backup for some systems.

• Acquisitions expanded platform content, with $250,000-$350,000 per aircraft on major models.

• Delivering to customer demand after stabilizing supply chain and labor productivity post-COVID.