SOURCE: Moog Inc.

Moog Inc.

January 31, 2011 08:00 ET

Moog Reports Earnings per Share up 55%

EAST AURORA, NY--(Marketwire - January 31, 2011) - Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) today announced first quarter sales of $554 million, up 12% from a year ago. Net earnings were $33.4 million and earnings per share were $.73, up 55% from last year's first quarter.

Aircraft segment sales of $196 million were also up 12% from last year. Most of the increase was in commercial aircraft, with revenues of $74 million, a 30% increase. OEM production revenues were up for both Airbus and Boeing, the result of a ramp up in 787 hardware deliveries. Commercial aircraft aftermarket revenues, at $26 million, were up 42%.

Military aircraft sales were up 5%, a combination of strong sales on the V-22 tiltrotor and increased aftermarket revenues. Military aftermarket sales of $47 million were up 23%. Sales of $18 million on the F-35 Joint Strike Fighter were down slightly as the program transitions from development to production.

Space and Defense sales at $96 million were up 38% from a year ago. Sales of Driver's Vision Enhancer systems, at $15 million, provided much of the increase. Revenue was also strong in tactical missiles and in our newer security and surveillance product lines.

Industrial Systems sales of $144 million were up 5% from a year ago. Sales of $113 million in our legacy products, which include capital equipment, power generation and simulation, were up 24% in the quarter. Sales in these product lines continue to recover from the low levels experienced in fiscal 2009.

Sales in the wind energy market were fairly strong in Europe, but relatively soft in China. Chinese wind turbine manufacturers are working off inventory acquired in the last quarter of 2010.

Components Group sales of $86 million were up 2% in the quarter. Sales increases of components used in commercial aircraft, in the marine industry, in medical applications and industrial automation are offsetting a decline in military aircraft revenue and defense controls. As a result of the conflicts in the Mideast, the Components Group had enjoyed robust sales in military vehicles, particularly the Bradley Fighting Vehicle and the Abrams tank and in de-icing systems for the Blackhawk helicopter. Activity in these programs is winding down.

Medical Devices sales were up 11% to $33 million. Increased sales in administration sets, sensors and surgical handpieces offset a slight decline in sales of infusion pumps.

Twelve month consolidated backlog on January 1, 2011 was $1.19 billion, an increase of 8% from a year ago.

The Company has updated its guidance for fiscal 2011. Sales are now projected at $2.25 billion, net earnings at $126.6 million and earnings per share of $2.75, a 17% increase over the previous year.

"Our Company is off to a flying start in fiscal 2011," said R.T. Brady, Chairman and CEO. "Our Space and Defense segment led the way with an extraordinary quarter and we had a solid performance overall. We're optimistic that this momentum will carry us through the rest of the year to record sales, record earnings and a 17% 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

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
    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
  viii. the possibility that new product and research and development
        efforts may not be successful, which could reduce our sales and
    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
 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.
              (dollars in thousands, except per share data)

                                                       Three Months Ended
                                                      January 1, January 2,
                                                        2011       2010
                                                      ---------- ----------

Net sales                                             $  554,434 $  495,178
Cost of sales                                            389,881    350,776
                                                      ---------- ----------
Gross profit                                             164,553    144,402
                                                      ---------- ----------

Research and development                                  23,475     23,882
Selling, general and administrative                       85,783     78,127
Restructuring expense                                         58      1,819
Interest                                                   9,211     10,728
Other                                                        246        394
                                                      ---------- ----------
Earnings before income taxes                              45,780     29,452
Income taxes                                              12,373      7,891
                                                      ---------- ----------
Net earnings                                          $   33,407 $   21,561
                                                      ========== ==========

Net earnings per share
   Basic                                              $     0.74 $     0.48
                                                      ========== ==========
   Diluted                                            $     0.73 $     0.47
                                                      ========== ==========

Average common shares outstanding
   Basic                                              45,388,891 45,323,349
                                                      ========== ==========
   Diluted                                            45,906,552 45,592,874
                                                      ========== ==========

                                Moog Inc.
                          (dollars in thousands)

                                                    Three Months Ended
                                                 January 1,     January 2,
                                                    2011           2010
                                                  ---------      ---------
Net Sales
   Aircraft Controls                              $ 195,951      $ 175,060
   Space and Defense Controls                        95,746         69,491
   Industrial Systems                               143,745        136,352
   Components                                        86,351         84,906
   Medical Devices                                   32,641         29,369
                                                  ---------      ---------
Net sales                                         $ 554,434      $ 495,178
                                                  =========      =========
Operating Profit (Loss) and Margins
   Aircraft Controls                              $  20,195      $  17,610
                                                       10.3%          10.1%
   Space and Defense Controls                        15,815          7,519
                                                       16.5%          10.8%
   Industrial Systems                                14,407         11,181
                                                       10.0%           8.2%
   Components                                        14,803         12,122
                                                       17.1%          14.3%
   Medical Devices                                   (1,491)           139
                                                      (4.6%)           0.5%
                                                  ---------      ---------
Total operating profit                               63,729         48,571
                                                       11.5%           9.8%

Deductions from Operating Profit
   Interest expense                                   9,211         10,728
   Equity-based compensation expense                  3,433          2,784
   Corporate expenses and other                       5,305          5,607
                                                  ---------      ---------
Earnings before Income Taxes                      $  45,780       $ 29,452
                                                  =========      =========

                                Moog Inc.
                        CONSOLIDATED BALANCE SHEETS
                          (dollars in thousands)

                                                   January 1,   October 2,
                                                      2011         2010
                                                  ------------ ------------
Cash                                              $    104,722 $    112,421
Receivables                                            614,361      619,861
Inventories                                            471,013      460,857
Other current assets                                   102,921       99,140
                                                  ------------ ------------
   Total current assets                              1,293,017    1,292,279
Property, plant and equipment                          486,943      486,944
Goodwill and intangible assets                         899,353      910,690
Other non-current assets                                21,269       22,221
                                                  ------------ ------------
   Total assets                                   $  2,700,582 $  2,712,134
                                                  ============ ============

Notes payable                                     $      5,029 $      1,991
Current installments of long-term debt                   7,279        5,405
Contract loss reserves                                  42,411       40,810
Other current liabilities                              432,469      431,268
                                                  ------------ ------------
   Total current liabilities                           487,188      479,474
Long-term debt                                         707,562      757,320
Other long-term liabilities                            351,568      354,384
                                                  ------------ ------------
   Total liabilities                                 1,546,318    1,591,178
Shareholders' equity                                 1,154,264    1,120,956
                                                  ------------ ------------
   Total liabilities and shareholders' equity     $  2,700,582 $  2,712,134
                                                  ============ ============

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