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
=========== ===========