SOURCE: Moog Inc.

Moog Inc.

May 02, 2011 08:00 ET

Moog Reports 22% Increase in Net Earnings

EAST AURORA, NY--(Marketwire - May 2, 2011) - Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) today announced second quarter earnings of $31 million, a 22% increase over last year's second quarter. Earnings per share of $.66 were 20% higher. Total sales of $574 million were up $64 million, or 12%, from a year ago.

Total Aircraft Controls sales in the quarter of $206 million were up $17 million from last year. Military aircraft sales were $123 million, up $9 million. On-going production programs including the F-35 Joint Strike Fighter, F-15 fighter, V-22 tilt rotor aircraft and the Black Hawk helicopter had slightly lower sales while military aftermarket sales in the quarter were very strong, up $19 million, or 55%.

The Company's commercial aircraft sales were $74 million, up $9 million, with sales to Boeing and Airbus totaling $37 million. This included a $5 million increase in deliveries for the Boeing 787. Revenue on business jet programs increased 52% to $7 million. Commercial aftermarket sales of $24 million were up $3 million and the Company's navigation aids product line had sales of $10 million.

The Space and Defense Controls segment had another excellent quarter. Sales at $88 million were up $9 million from a year ago. In the defense controls product line, the Driver's Vision Enhancer program generated another $7 million in sales. Security and surveillance sales of $12 million were $7 million higher, assisted by the recent Pieper acquisition in Germany.

The Company's Industrial Systems segment continues to grow stronger. Sales in the quarter of $156 million increased $35 million from the prior year. This was the seventh consecutive quarter of sales growth for legacy industrial products sold by the segment. Sales of controls for capital equipment improved by 28% as the Company's major industrial product lines, including plastics, metal forming and steel mill controls recorded significant sales increases. Wind energy products generated $34 million in revenue, a 31% increase.

Sales for the Components Group of $90 million were unchanged from last year's second quarter but there has been a significant mix shift. Increased sales of marine, medical and industrial products have offset reduced military sales. Eurofighter revenues are winding down and the level of activity in overhaul and upgrades of military vehicles is much reduced from last year's level. The Company's marine product line is used primarily in off-shore oil exploration and sales in this market increased $4 million as the price of oil continued to increase.

The Medical Devices segment had sales of $34 million, up 6% from last year. Sales of pumps were down $1 million while administrative set sales were $1 million higher and sales of sensors and hand pieces were $2 million higher. This segment is on track to resolve a previously announced software recall for IV pumps and those pumps did not ship during the quarter.

The Company's twelve month backlog of $1.2 billion is up 8% from a year ago.

The Company has increased its guidance for the year. Sales for the year will be $2.27 billion. Net earnings are now projected at $129 million and earnings per share at $2.80, an increase of 19% over the previous fiscal year.

"In total, our second quarter sales and earnings were better than our forecast and we're on track for a record year," said R.T. Brady, Chairman and CEO. "Aircraft, Space and Defense, and Industrial Systems will be up significantly from last year. The Components Group will deliver another solid performance. Medical Devices sales are developing more slowly than we'd forecasted and we've revised our plan to reflect that. The overall result will be a year better than our original forecast and we're now projecting a 19% increase in earnings per share."

Moog Inc. is a worldwide designer, manufacturer, and integrator of precision control components and systems. Moog's high-performance systems control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, automated industrial machinery, wind energy, marine and medical equipment. Additional information about the Company can be found at www.moog.com.

Cautionary Statement

Information included or incorporated by reference herein that does not consist of historical facts, including statements accompanied by or containing words such as "may," "will," "should," "believes," "expects," "expected," "intends," "plans," "projects," "approximate," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume" and "assume," are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the results described in the forward-looking statements. These important factors, risks and uncertainties include:

i.      fluctuations in general business cycles for commercial aircraft,
        military aircraft, space and defense products, industrial capital
        goods and medical devices;
ii.     our dependence on government contracts that may not be fully
        funded or may be terminated;
iii.    our dependence on certain major customers, such as The Boeing
        Company and Lockheed Martin, for a significant percentage of our
        sales;
iv.     delays by our customers in the timing of introducing new products,
        which may affect our earnings and cash flow;
v.      the possibility that the demand for our products may be reduced
        if we are unable to adapt to technological change;
vi.     intense competition, which may require us to lower prices or offer
        more favorable terms of sale;
vii.    our indebtedness, which could limit our operational and financial
        flexibility;
viii.   the possibility that new product and research and development
        efforts may not be successful, which could reduce our sales
        and profits;
ix.     increased cash funding requirements for pension plans, which could
        occur in future years based on assumptions used for our defined
        benefit pension plans, including returns on plan assets and
        discount rates;
x.      a write-off of all or part of our goodwill or intangible assets,
        which could adversely affect our operating results and net worth
        and cause us to violate covenants in our bank agreements;
xi.     the potential for substantial fines and penalties or suspension
        or debarment from future contracts in the event we do not comply
        with regulations relating to defense industry contracting;
xii.    the potential for cost overruns on development jobs and
        fixed-price contracts and the risk that actual results may differ
        from estimates used in contract accounting;
xiii.   the possibility that our subcontractors may fail to perform their
        contractual obligations, which may adversely affect our contract
        performance and our ability to obtain future business;
xiv.    our ability to successfully identify and consummate acquisitions,
        and integrate the acquired businesses and the risks associated
        with acquisitions, including that the acquired businesses do not
        perform in accordance with our expectations, and that we assume
        unknown liabilities in connection with acquired businesses for
        which we are not indemnified;
xv.     our dependence on our management team and key personnel;
xvi.    the possibility of a catastrophic loss of one or more of our
        manufacturing facilities;
xvii.   the possibility that future terror attacks, war or other civil
        disturbances could negatively impact our business;
xviii.  that our operations in foreign countries could expose us to
        political risks and adverse changes in local, legal, tax and
        regulatory schemes;
xix.    the possibility that government regulation could limit our ability
        to sell our products outside the United States;
xx.     product quality or patient safety issues with respect to our
        medical devices business that could lead to product recalls,
        withdrawal from certain markets, delays in the introduction of
        new products, sanctions, litigation, declining sales or actions
        of regulatory bodies and government authorities;
xxi.    the impact of product liability claims related to our products
        used in applications where failure can result in significant
        property damage, injury or death and in damage to our reputation;
xxii.   changes in medical reimbursement rates of insurers to medical
        service providers, which could affect sales of our medical
        products;
xxiii.  the possibility that litigation results may be unfavorable to us;
xxiv.   our ability to adequately enforce our intellectual property rights
        and the possibility that third parties will assert intellectual
        property rights that prevent or restrict our ability to
        manufacture, sell, distribute or use our products or technology;
xxv.    foreign currency fluctuations in those countries in which we do
        business and other risks associated with international operations;
xxvi.   the cost of compliance with environmental laws;
xxvii.  the risk of losses resulting from maintaining significant amounts
        of cash and cash equivalents at financial institutions that are
        in excess of amounts insured by governments;
xxviii. the inability to modify, to refinance or to utilize amounts
        presently available to us under our credit facilities given
        uncertainties in the credit markets;
xxix.   our ability to meet the restrictive covenants under our credit
        facilities since a breach of any of these covenants could result
        in a default under our credit agreements; and
xxx.    our customers' inability to continue operations or to pay us due
        to adverse economic conditions or their inability to access
        available credit.

                                Moog Inc.
                    CONSOLIDATED STATEMENTS OF EARNINGS
              (dollars in thousands, except per share data)

                           Three Months Ended         Six Months Ended
                          April 2,     April 3,     April 2,     April 3,
                            2011         2010         2011         2010
                        -----------  -----------  -----------  -----------
Net sales               $   574,226  $   510,488  $ 1,128,660  $ 1,005,666
Cost of sales               406,978      362,587      796,859      713,363
                        -----------  -----------  -----------  -----------
Gross profit                167,248      147,901      331,801      292,303
                        -----------  -----------  -----------  -----------

Research and
 development                 28,154       25,504       51,629       49,386
Selling, general and
 administrative              86,974       76,098      172,757      154,225
Restructuring expense           518        1,320          576        3,139
Interest                      8,970        9,248       18,181       19,976
Other                          (673)         236         (427)         630
                        -----------  -----------  -----------  -----------
Earnings before income
 taxes                       43,305       35,495       89,085       64,947
Income taxes                 12,690       10,494       25,063       18,385
                        -----------  -----------  -----------  -----------
Net earnings            $    30,615  $    25,001  $    64,022  $    46,562
                        ===========  ===========  ===========  ===========

Net earnings per share
  Basic                 $      0.67  $      0.55  $      1.41  $      1.03
                        ===========  ===========  ===========  ===========
  Diluted               $      0.66  $      0.55  $      1.39  $      1.02
                        ===========  ===========  ===========  ===========

Average common shares
 outstanding
  Basic                  45,419,121   45,374,912  45,404,006    45,349,131
                        ===========  ===========  ===========  ===========
  Diluted                46,058,991   45,730,252  45,982,772    45,661,564
                        ===========  ===========  ===========  ===========




                                Moog Inc.
                  CONSOLIDATED SALES AND OPERATING PROFIT
                          (dollars in thousands)

                           Three Months Ended         Six Months Ended
                          April 2,     April 3,     April 2,     April 3,
                            2011         2010         2011         2010
                        -----------  -----------  -----------  -----------
Net Sales
  Aircraft Controls     $   206,030  $   188,753  $   401,981  $   363,813
  Space and Defense
   Controls                  87,791       79,084      183,537      148,575
  Industrial Systems        155,851      120,441      299,596      256,793
  Components                 90,348       89,839      176,699      174,745
  Medical Devices            34,206       32,371       66,847       61,740
                        -----------  -----------  -----------  -----------
Net sales               $   574,226  $   510,488  $ 1,128,660  $ 1,005,666
                        ===========  ===========  ===========  ===========
Operating Profit (Loss)
 and Margins
  Aircraft Controls     $    19,168  $    19,575  $    39,363  $    37,185
                                9.3%        10.4%         9.8%        10.2%
  Space and Defense
   Controls                  13,083        8,678       28,898       16,197
                               14.9%        11.0%        15.7%        10.9%
  Industrial Systems         15,858        8,139       30,265       19,320
                               10.2%         6.8%        10.1%         7.5%
  Components                 13,255       14,396       28,058       26,518
                               14.7%        16.0%        15.9%        15.2%
  Medical Devices            (1,504)          12       (2,995)         151
                               (4.4%)        0.0%        (4.5%)        0.2%
                        -----------  -----------  -----------  -----------
Total operating profit       59,860       50,800      123,589       99,371
                               10.4%        10.0%        11.0%         9.9%

Deductions from
 Operating Profit
  Interest expense            8,970        9,248       18,181       19,976
  Equity-based
   compensation
   expense                    1,742          894        5,175        3,678
  Corporate expenses
   and other                  5,843        5,163       11,148       10,770
                        -----------  -----------  -----------  -----------
Earnings before Income
 Taxes                  $    43,305  $    35,495  $    89,085  $    64,947
                        ===========  ===========  ===========  ===========




                                Moog Inc.
                        CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)

                                                     April 2,   October 2,
                                                       2011        2010
                                                    ----------- -----------
Cash                                                $   100,020 $   112,421
Receivables                                             643,654     619,861
Inventories                                             487,443     460,857
Other current assets                                    105,901      99,140
                                                    ----------- -----------
  Total current assets                                1,337,018   1,292,279
Property, plant and equipment                           492,518     486,944
Goodwill and intangible assets                          904,997     910,690
Other non-current assets                                 24,304      22,221
                                                    ----------- -----------
    Total assets                                    $ 2,758,837 $ 2,712,134
                                                    =========== ===========

Notes payable                                       $     1,554 $     1,991
Current installments of long-term debt                    2,300       5,405
Contract loss reserves                                   40,973      40,810
Other current liabilities                               440,236     431,268
                                                    ----------- -----------
  Total current liabilities                             485,063     479,474
Long-term debt                                          714,583     757,320
Other long-term liabilities                             352,239     354,384
                                                    ----------- -----------
  Total liabilities                                   1,551,885   1,591,178
Shareholders' equity                                  1,206,952   1,120,956
                                                    ----------- -----------
  Total liabilities and shareholders' equity        $ 2,758,837 $ 2,712,134
                                                    =========== ===========

Contact Information

  • Contact
    Ann Marie Luhr
    716-687-4225