Moog Reports Increased Earnings ForecastEAST AURORA, NY -- (Marketwire - April 30, 2010) - Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) today announced second quarter earnings of $25 million, a 6% increase over last year's second quarter. Earnings per share of $.55 were equal to last year's since the Company sold 2.7 million additional shares of Class A common stock at the end of last year. Total sales of $510 million were up 13% from a year ago.
Total aircraft sales in the quarter of $189 million were up $27 million from a year ago. The Company's recent acquisition of the General Electric Actuation Systems business in Wolverhampton, U.K. provided almost all of the sales growth. Military aircraft sales of $114 million were up $12 million from last year. On-going production programs including the F-18 fighter, the V-22 tilt rotor aircraft and the Blackhawk helicopter provided all of the increase. Revenue on the F-35 Joint Strike Fighter was down $2 million as the development nears completion and the production program has just begun to ramp-up. Military aftermarket sales in the quarter were flat at $35 million.
The Company's commercial aircraft sales in the quarter at $65 million were up $11 million from last year. Sales to Boeing and Airbus totaled $33 million in the quarter, a $17 million increase. The Wolverhampton acquisition provided $12 million of that sales increase. Revenue on business jet programs was significantly lower in the quarter at $5 million. Commercial aftermarket sales at $21 million were up almost $3 million and the Company's navigation aids product line, with sales of $10 million, provided a $4 million increase.
The Space and Defense segment had a very strong quarter. Sales at $79 million were up $11 million from a year ago. Revenues on Orbital Sciences' Taurus II launch vehicle were $3.4 million compared to only $300K a year ago. Sales on the Hellfire missile at $4 million were twice last year's level. Revenue on NASA's Constellation program was nearly $5 million, up $1.5 million from last year. In the defense controls product line, the Driver's Vision Enhancer program generated $7 million in sales, up $5 million from a year ago.
The Company's Industrial Systems segment is making a steady recovery from last year's global recession. Sales in the quarter of $120 million increased $16 million from the prior year. The Company's recent wind energy acquisitions generated $26 million in revenue. Sales of controls for capital equipment and most of the Company's other major industrial product lines improved from last quarter but still haven't recovered to last year's level.
Sales for the Components Group of $90 million were up $5 million from last year's second quarter. Within this segment, the aircraft, space and defense, industrial and medical product lines all produced sales increases. The largest sales increase was in military aircraft where revenue was up $5 million to over $31 million reflecting hardware deliveries for Eurofighter, the Blackhawk helicopter, and the V-22 tilt rotor programs. The defense controls product line was also up substantially as a result of sales on the Common Remotely Operated Weapons Station (CROWS). The Company's marine product line is used primarily in off-shore oil exploration and sales in this market have declined along with the price of oil. Sales in this quarter were $6 million, down from $11 million a year ago.
The Medical Devices segment had sales of $32 million, down 5% from last year. Sales of I.V. and enteral pumps were down $3.4 million from last year's record sales levels. Administration set revenues were up $2.0 million and sales of sensors and hand pieces were up $1.2 million.
The Company's twelve month backlog of $1.1 billion is up over 20% from a year ago.
The Company has updated its guidance for the year. Sales for the year will be down very slightly from $2.12 billion to $2.1 billion, but the Company increased its forecast for net earnings and earnings per share. Net earnings are now projected at $107.4 million and earnings per share at $2.35, an increase of 19% over the previous fiscal year.
"The Company's second quarter results exceeded our plan, particularly in Aircraft and in Space and Defense," said R.T. Brady, Chairman and CEO. "Our Components Group delivered another solid performance. Wind energy and Medical Devices sales are developing a little more slowly than we'd planned but both show signs of improvement. The overall result will be a year better than our original forecast and we're now forecasting a 19% improvement 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 3, March 28, April 3, March 28,
2010 2009 2010 2009
----------- ----------- ----------- -----------
Net sales $ 510,488 $ 453,335 $ 1,005,666 $ 899,423
Cost of sales 362,587 317,563 713,363 625,803
----------- ----------- ----------- -----------
Gross profit 147,901 135,772 292,303 273,620
----------- ----------- ----------- -----------
Research and development 25,504 24,192 49,386 49,322
Selling, general and
administrative 76,098 68,806 154,225 138,005
Restructuring expense 1,320 - 3,139 -
Interest 9,248 9,422 19,976 19,023
Equity in earnings of LTi
and other 236 (3,150) 630 (5,605)
----------- ----------- ----------- -----------
Earnings before income
taxes 35,495 36,502 64,947 72,875
Income taxes 10,494 12,810 18,385 18,913
----------- ----------- ----------- -----------
Net earnings $ 25,001 $ 23,692 $ 46,562 $ 53,962
=========== =========== =========== ===========
Net earnings per share
Basic $ 0.55 $ 0.56 $ 1.03 $ 1.27
=========== =========== =========== ===========
Diluted $ 0.55 $ 0.55 $ 1.02 $ 1.26
=========== =========== =========== ===========
Average common shares
outstanding
Basic 45,374,912 42,535,691 45,349,131 42,571,490
=========== =========== =========== ===========
Diluted 45,730,252 42,823,791 45,661,564 42,904,940
=========== =========== =========== ===========
MOOG INC.
CONSOLIDATED SALES AND OPERATING PROFIT
(dollars in thousands)
Three Months Ended Six Months Ended
April 3, March 28, April 3, March 28,
2010 2009 2010 2009
---------- ---------- ---------- ----------
Net Sales
Aircraft Controls $ 188,753 $ 162,025 $ 363,813 $ 325,173
Space and Defense
Controls 79,084 68,320 148,575 139,702
Industrial Systems 120,441 104,512 256,793 214,547
Components 89,839 84,504 174,745 166,008
Medical Devices 32,371 33,974 61,740 53,993
---------- ---------- ---------- ----------
Net sales $ 510,488 $ 453,335 $1,005,666 $ 899,423
========== ========== ========== ==========
Operating Profit
(Loss) and Margins
Aircraft Controls $ 19,575 $ 14,519 $ 37,185 $ 28,019
10.4% 9.0% 10.2% 8.6%
Space and Defense
Controls 8,678 9,806 16,197 23,386
11.0% 14.4% 10.9% 16.7%
Industrial Systems 8,139 10,860 19,320 22,359
6.8% 10.4% 7.5% 10.4%
Components 14,396 15,049 26,518 30,050
16.0% 17.8% 15.2% 18.1%
Medical Devices 12 (77) 151 (2,301)
0.0% (0.2%) 0.2% (4.3%)
---------- ---------- ---------- ----------
Total operating
profit 50,800 50,157 99,371 101,513
10.0% 11.1% 9.9% 11.3%
Deductions from
Operating Profit
Interest expense 9,248 9,422 19,976 19,023
Equity-based
compensation
expense 894 1,031 3,678 3,620
Corporate expenses
and other 5,163 3,202 10,770 5,995
---------- ---------- ---------- ----------
Earnings before
Income Taxes $ 35,495 $ 36,502 $ 64,947 $ 72,875
========== ========== ========== ==========
MOOG INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
April 3, October 3,
2010 2009
----------- -----------
Cash $ 88,598 $ 81,493
Receivables 570,270 547,571
Inventories 465,829 484,261
Other current assets 99,121 97,073
----------- -----------
Total current assets 1,223,818 1,210,398
Property, plant and equipment 475,605 481,726
Goodwill and intangible assets 890,905 918,770
Other non-current assets 20,169 23,423
----------- -----------
Total assets $ 2,610,497 $ 2,634,317
=========== ===========
Notes payable $ 3,341 $ 16,971
Current installments of long-term debt 1,413 1,541
Contract loss reserves 38,799 50,190
Other current liabilities 391,611 377,559
----------- -----------
Total current liabilities 435,164 446,261
Long-term debt 775,466 814,574
Other long-term liabilities 295,609 308,449
----------- -----------
Total liabilities 1,506,239 1,569,284
Shareholders' equity 1,104,258 1,065,033
----------- -----------
Total liabilities and shareholders' equity $ 2,610,497 $ 2,634,317
=========== ===========
Press Release contact
Ann Marie Luhr
716-687-4225
