SOURCE: Moog Inc.

Moog Inc.

July 27, 2012 07:56 ET

MOOG'S Third Quarter EPS Increase 16%

EAST AURORA, NY--(Marketwire - Jul 27, 2012) -  Moog Inc. (NYSE: MOG.A) and (NYSE: MOG.B) announced today third quarter earnings of $39 million, or $.85 a share, an increase of 16% over last year's $.73 per share. Sales in the quarter of $611 million were up 5% from last year's $583 million. 

Aircraft sales in the quarter of $242 million were up 10%, or $22 million, from a year ago. Stronger military aircraft sales of $142 million included F-35 sales of $21 million, up 9%, and higher sales for V-22, up 6%. Aftermarket sales of $49 million were down 10% from a very strong third quarter a year ago. The decline in military aftermarket was partly due to lower V-22 activity related to the timing of shipments.

Commercial aircraft sales of $100 million were up $14 million, or 16%. Sales of OEM products to Boeing were unchanged at $34 million while Airbus sales were up 20%. Sales of controls for business jets were $11 million, or 6% higher than last year. Commercial aftermarket revenue, at $30 million, was 25% higher in the quarter due in part to initial provisioning of 787 spares. 

Space and Defense sales of $87 million were 9% higher in the quarter. Space market sales were up 19% from last year on strength in commercial programs. The recent acquisition of Bradford Engineering added $2 million in sales. Defense sales were stronger, up 15%, on increased sales of components for tactical missiles and work on a Light Armored Vehicle program.

The Industrial Systems segment contributed sales of $158 million. Real sales growth of $10 million was largely offset by currency effects. Energy sales were up slightly at $47 million on increased sales of gas and steam turbine controls while wind energy sales were close to last year's level. Industrial automation sales were softer, down 7%, primarily due to currency effects. Sales of test and simulation products were up $5 million, or 16%, as demand grows globally for flight simulators.

The Components segment had sales in the quarter of $90 million, up 3% from last year. Products sold into marine applications were higher at $12 million and industrial sales were 22% higher. Sales into the aerospace and defense markets were down 6%. Space and medical sales were unchanged.

The Medical Devices segment had sales of $34 million, down 12% from a record quarter a year ago but in line with the average for the year.

The current backlog of $1.3 billion was unchanged from the same quarter a year ago. 

The Company affirmed its earnings per share guidance of $3.31, up 12% for the year ending September 2012. Sales are now forecast at $2.45 billion, with net earnings unchanged at $152 million.

The Company also provided its initial projections for fiscal 2013. Given the uncertain global industrial economic outlook, the Company's initial forecast includes a sales range of $2.56 billion to $2.61 billion. The result would be net earnings in a range of $161 million to $170 million, and earnings per share of $3.50 to $3.70, a 6% increase at the low end and a 12% increase at the high end.

"The third quarter was another great quarter for the company with earnings up nicely from 12 months ago," said John Scannell, CEO. "We are on track for a good finish to the year and planning to meet our target of $3.31 per share, a 12% increase over fiscal 2011. Each of our segments is contributing to this strong performance. As we look out to fiscal 2013, we are forecasting further growth in sales and earnings for the company. The economic turmoil in Europe and the potential cuts in US defense spending may present us with some challenges in the year ahead. However, our global presence and market diversity should serve us well as we manage our way through whatever challenges the macro environment may throw at us."

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 in this report 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 expected results described in the forward-looking statements. These important factors, risks and uncertainties include:

  • the markets we serve are cyclical and sensitive to domestic and foreign economic conditions and events, which may cause our operating results to fluctuate;
  • we operate in highly competitive markets with competitors who may have greater resources than we possess;
  • we depend heavily on government contracts that may not be fully funded or may be terminated, and the failure to receive funding or the termination of one or more of these contracts could reduce our sales and increase our costs;
  • we make estimates in accounting for long-term contracts, and changes in these estimates may have significant impacts on our earnings;
  • we enter into fixed-price contracts, which could subject us to losses if we have cost overruns;
  • if our subcontractors or suppliers fail to perform their contractual obligations, our prime contract performance and our ability to obtain future business could be materially and adversely impacted;
  • contracting on government programs is subject to significant regulation, including rules related to bidding, billing and accounting kickbacks and false claims, and any non-compliance could subject us to fines and penalties or possible debarment;
  • the loss of Boeing or Lockheed Martin as a customer or a significant reduction in sales to either company could adversely impact our operating results;
  • if we are unable to adapt to technological change, demand for our products may be reduced;
  • our new product and research and development efforts may not be successful, which would result in a reduction in our sales and earnings;
  • our inability to adequately enforce our intellectual property rights or defend against assertions of infringement could prevent or restrict our ability to compete;
  • our indebtedness and restrictive covenants under our credit facilities could limit our operational and financial flexibility;
  • significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could affect our earnings, equity and pension funding requirements;
  • a write-off of all or part of our goodwill or other intangible assets could adversely affect our operating results and net worth;
  • our sales and earnings growth may be reduced if we cannot implement our acquisition strategy;
  • we may incur losses and liabilities as a result of our acquisition strategy;
  • our operations in foreign countries expose us to political and currency risks and adverse changes in local, legal, tax and regulatory schemes;
  • government regulations could limit our ability to sell our products outside the United States and otherwise adversely affect our business;
  • the failure or misuse or our products may damage our reputation, necessitate a product recall or result in claims against us that exceed our insurance coverage, thereby requiring us to pay significant damages;
  • future terror attacks, war or other civil disturbances could negatively impact our business;
  • our facilities could be damaged by catastrophes which could reduce our production capacity and result in a loss of customers;
  • our operations are subject to environmental laws, and complying with those laws may cause us to incur significant costs; and
  • we are involved in various legal proceedings, the outcome of which may be unfavorable to us.

These factors are not exhaustive. New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. We disclaim any obligation to update the forward-looking statements made in this report.

   
Moog Inc.  
CONSOLIDATED STATEMENTS OF EARNINGS  
(dollars in thousands, except per share data)  
   
  Three Months Ended   Nine Months Ended  
  June 30,   July 2,   June 30,   July 2,  
  2012   2011   2012   2011  
                         
Net sales $ 611,221   $ 582,959   $ 1,836,809   $ 1,711,619  
Cost of sales   427,803     414,075     1,283,826     1,210,922  
                         
Gross profit   183,418     168,884     552,983     500,697  
                         
Research and development   28,198     25,723     84,285     77,352  
Selling, general and administrative   93,668     89,663     287,163     263,008  
Interest   8,566     8,831     25,748     27,012  
Other   (373 )   (980 )   (310 )   (1,407 )
                         
Earnings before income taxes   53,359     45,647     156,097     134,732  
                         
Income taxes   14,488     11,809     45,432     36,872  
                         
Net earnings $ 38,871   $ 33,838   $ 110,665   $ 97,860  
                         
Net earnings per share                        
                         
  Basic $ 0.86   $ 0.74   $ 2.45   $ 2.15  
                         
  Diluted $ 0.85   $ 0.73   $ 2.42   $ 2.13  
                         
Average common shares outstanding                        
                         
  Basic   45,258,844     45,625,499     45,232,833     45,477,837  
                         
  Diluted   45,707,738     46,187,026     45,723,097     46,050,856  
                           
   
Moog Inc.  
CONSOLIDATED SALES AND OPERATING PROFIT  
(dollars in thousands)  
                 
  Three Months Ended   Nine Months Ended  
  July 2,   July 2,   July 2,   July 2,  
  2012   2011   2012   2011  
Net Sales                        
                         
  Aircraft Controls $ 242,220   $ 220,691   $ 709,688   $ 622,672  
                         
  Space and Defense Controls   87,138     79,689     265,343     263,226  
                         
  Industrial Systems   157,871     156,404     483,971     456,000  
                         
  Components   90,335     87,940     274,125     264,639  
                         
  Medical Devices   33,657     38,235     103,682     105,082  
                         
Net sales $ 611,221   $ 582,959   $ 1,836,809   $ 1,711,619  
                         
Operating Profit (Loss) and Margins                        
                         
  Aircraft Controls $ 27,826   $ 22,935   $ 75,436   $ 62,298  
    11.5 %   10.4 %   10.6 %   10.0 %
                         
  Space and Defense Controls   9,892     8,751     32,538     37,649  
    11.4 %   11.0 %   12.3 %   14.3 %
                         
  Industrial Systems   15,880     13,864     50,978     44,129  
    10.1 %   8.9 %   10.5 %   9.7 %
                         
  Components   12,657     13,365     41,165     41,423  
    14.0 %   15.2 %   15.0 %   15.7 %
                         
  Medical Devices   1,358     1,157     4,445     (1,838 )
    4.0 %   3.0 %   4.3 %   (1.7 %)
Total operating profit   67,613     60,072     204,562     183,661  
    11.1 %   10.3 %   11.1 %   10.7 %
                         
Deductions from Operating Profit                        
                         
  Interest expense   8,566     8,831     25,748     27,012  
                         
  Equity-based compensation expense   750     744     5,540     5,919  
                         
  Corporate expenses and other   4,938     4,850     17,177     15,998  
                         
Earnings before Income Taxes $ 53,359   $ 45,647   $ 156,097   $ 134,732  
                         
 
Moog Inc.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
       
  June 30,   October 1,
  2012   2011
           
Cash $ 139,450   $ 113,679
           
Receivables   710,100     655,805
           
Inventories   522,572     502,373
           
Other current assets   118,852     108,589
           
  Total current assets   1,490,974     1,380,446
           
Property, plant and equipment   528,357     503,872
           
Goodwill and intangible assets   925,912     932,566
           
Other non-current assets   29,413     26,083
  Total assets $ 2,974,656   $ 2,842,967
           
           
           
Short-term borrowings $ 103,699   $ 9,283
           
Current installments of long-term debt   279     1,407
           
Contract loss reserves   45,610     45,173
           
Other current liabilities   513,027     490,527
           
  Total current liabilities   662,615     546,390
           
Long-term debt   617,395     714,757
           
Other long-term liabilities   391,958     389,929
           
  Total liabilities   1,671,968     1,651,076
           
Shareholders' equity   1,302,688     1,191,891
  Total liabilities and shareholders' equity $ 2,974,656   $ 2,842,967
             

Contact Information

  • Contact
    Ann Marie Luhr
    716-687-4225

    MOOG INC.
    EAST AURORA, NEW YORK 14052
    TEL-716/652-2000
    FAX -716/687-4457