press information
MOOG INC., EAST AURORA, NEW YORK 14052 TEL-716/652-2000 FAX -716/687-4457
release date Immediate contact Ann Marie Luhr
October 30, 2008 716-687-4225
MOOG REPORTS YEAR-END EARNINGS PER SHARE UP 18%
Moog Inc. (NYSE: MOG.A and MOG.B) today announced net earnings of $119 million
and earnings per share of $2.75, an increase of 18% over last year. Sales for
the year of $1.903 billion were up $345 million or 22% over the previous year.
Sales increases were very strong in all five of the Company's reporting
segments.
Fourth quarter net earnings increased 18% over last year to $31.7 million.
Earnings per share for the quarter were 73 cents, 18% higher than last year.
Total sales for the quarter of $491 million were up 19%.
In the Aircraft segment, sales for the year were up 15% to $673 million. The
sales increase was mostly in military aircraft where revenues were $402 million.
The sales increase was driven by accelerating production work on the V-22 Osprey
rotorcraft, increased development activity on the F-35 Joint Strike Fighter and
strong military aftermarket sales.
Commercial aircraft sales for the year of $271 million were up 4%. The increase
was in sales to business jet manufacturers, principally Gulfstream, Bombardier,
and Hawker Beechcraft. The Company recently announced that it is supplying the
entire flight control system for the new Gulfstream G250. Sales to Boeing
Commercial were $76 million for the year, down from last year and the commercial
aftermarket revenues came in 6% below last year.
For the fourth quarter, Aircraft sales of $176 million were up 10%. It was a
strong quarter in sales on the F-35 and the V-22. The military aftermarket had
record sales of $39 million. On the commercial side, the only growth was in
business jets as a result of increased production on the Hawker 4000 and the
Challenger 300.
In the Space and Defense segment, sales of $253 million were up 37% for the
year. Moog's traditional products in this segment are controls for satellites,
launch vehicles, and strategic and tactical missiles, and these products
provided the solid base of sales. The growth in the year was provided by the
Constellation program and two acquisitions. Constellation, which is the Space
Shuttle replacement program, generated $24 million in sales in the year. The
QuickSet acquisition through its Driver Vision Enhancer program added $33
million in sales of mechanisms for MRAP vehicles. The CSA acquisition came late
in the year and added another $6 million in sales.
Fourth quarter Space and Defense sales were $62 million, up 35% from a year ago.
In the quarter, the growth was also driven by the Constellation program and the
two recent acquisitions.
Moog's Industrial Systems segment had sales for the year of $532 million, a 22%
increase. Three markets - motion simulators, metal-forming presses and steel
mill equipment led the charge for the fiscal year with growth percentages
ranging from 33% to 56%. These three markets provided total sales of $174
million. In addition, plastics controls grew to $77 million. Power generation
was up to $50 million.
The fourth quarter was also strong in the Industrial segment. Sales of $136
million were up 23%. Once again, the strongest growth in the quarter was in
motion simulators, metal-forming machines and steel mill equipment.
In the Components Group, sales for the year were up in every product category.
The total at $341 million was up 20%. Growth in the aircraft market came on the
Guardian System, which protects aircraft from shoulder-fired missiles and on the
Multi-Spectral Targeting System used on the Predator Unmanned Air Vehicle.
Deliveries of slip ring systems continued to be strong for the Abrams Tank, the
Bradley Fighting Vehicle, and the Stryker Mobile Gun System. Marine sales of $46
million were up 53%, reflecting increased oil exploration.
Fourth quarter Components Group sales were $90 million, up 23% from the year
previous. Products for military aircraft, space and defense equipment, and the
marine market were all particularly strong in the quarter.
For the year, the Medical Devices segment generated sales of $103 million. The
total included pump sales of $38 million, sales of administration sets at $35
million and $30 million in sales of sensors, hand pieces and other associated
equipment.
For the quarter, sales in Medical Devices of $26 million were up 11% from a year
ago. In the quarter, higher sales reflected an increase in administration sets,
sensor sales and cataract hand pieces.
Year-end consolidated backlog of $862 million was up $87 million or 11% from a
year ago.
The Company updated its guidance for fiscal 2009. Fiscal '09 sales are now
forecast in a range of $1.995 billion to $2.035 billion. Net earnings are
forecast in the range between $132 million and $136 million. The midrange net
earnings of $134 million would generate earnings per share of $3.08, a 12%
increase over the $2.75 reported for fiscal '08.
"Fiscal '08 was another great year for our Company" said R. T. Brady, Chairman
and CEO. "This was our fourteenth consecutive year of growth in earnings per
share. This year the increase was 18%. We achieved these results while making
substantial investments in R&D particularly in our aircraft business. We were
helped by big increases in the Constellation program and strong markets for our
Industrial products and for the Components Group. The QuickSet acquisition was a
big contributor through its Driver Vision Enhancer program. During our third
quarter, we expanded our credit availability and we entered the current tight
credit market with over $500 million of cash and available credit facilities. We
expect to encounter a challenging economic period in fiscal '09, but our product
portfolio provides us with a very strong hand to play. Our aerospace and defense
business will not be affected and we believe that our medical devices and many
of our industrial products will experience very little recessionary impact.
We're optimistic that fiscal '09 will be the fifteenth year of growth 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, marine and medical equipment.
Additional information about the Company can be found at www.moog.com.
Cautionary Statement
Information included herein or incorporated by reference 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," "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 (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) the possibility that the demand for our products
may be reduced if we are unable to adapt to technological change, (v) intense
competition which may require us to lower prices or offer more favorable terms
of sale, (vi) our significant indebtedness which could limit our operational and
financial flexibility, (vii) the possibility that new product and research and
development efforts may not be successful which could reduce our sales and
profits, (viii) 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, (ix) a
write-off of all or part of our goodwill, which could adversely affect our
operating results and net worth and cause us to violate covenants in our bank
agreements, (x) 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, (xi) 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, (xii) 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, (xiii) 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 the acquired businesses for which we are not
indemnified, (xiv) our dependence on our management team and key personnel, (xv)
the possibility of a catastrophic loss of one or more of our manufacturing
facilities, (xvi) the possibility that future terror attacks, war or other civil
disturbances could negatively impact our business, (xvii) that our operations in
foreign countries could expose us to political risks and adverse changes in
local, legal, tax and regulatory schemes, (xviii) the possibility that
government regulation could limit our ability to sell our products outside the
United States, (xix) 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, (xx) 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, (xxi) the possibility that
litigation may result unfavorably to us, (xxii) 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, (xxiii) foreign
currency fluctuations in those countries in which we do business and other risks
associated with international operations, (xxiv) the cost of compliance with
environmental laws, (xxiv) 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, (xxv) the inability to utilize
amounts available to us under our credit facilities given uncertainties in the
credit markets and (xxvi) our customer's inability to pay us due to adverse
economic conditions or their inability to access available credit. The factors
identified above 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 Twelve Months Ended
September 27, September 29, September 27, September 29,
2008 2007 2008 2007
--------------- --------------- --------------- ---------------
Net sales $ 490,846 $ 413,415 $ 1,902,666 $ 1,558,099
Cost of sales 337,388 275,206 1,293,452 1,028,852
--------------- --------------- --------------- ---------------
Gross profit 153,458 138,209 609,214 529,247
--------------- --------------- --------------- ---------------
Research and development 28,913 26,411 109,599 102,603
Selling, general and administrative 75,302 66,112 294,936 252,173
Interest 9,683 9,123 37,739 29,538
Other 651 197 (1,095) 1,182
--------------- --------------- --------------- ---------------
114,549 101,843 441,179 385,496
--------------- --------------- --------------- ---------------
Earnings before income taxes 38,909 36,366 168,035 143,751
Income taxes 7,255 9,557 48,967 42,815
--------------- --------------- --------------- ---------------
Net earnings $ 31,654 $ 26,809 $ 119,068 $ 100,936
=============== =============== =============== ===============
Net earnings per share
Basic $ .74 $ .63 $ 2.79 $ 2.38
=============== =============== =============== ===============
Diluted $ .73 $ .62 $ 2.75 $ 2.34
=============== =============== =============== ===============
Average common shares outstanding
Basic 42,684,157 42,503,581 42,604,268 42,429,711
=============== =============== =============== ===============
Diluted 43,277,694 43,253,204 43,256,888 43,149,481
=============== =============== =============== ===============
MOOG INC.
CONSOLIDATED SALES AND OPERATING PROFIT
(dollars in thousands)
Three Months Ended Twelve Months Ended
September 27, September 29, September 27, September 29,
2008 2007 2008 2007
--------------- --------------- --------------- ---------------
Net Sales
Aircraft Controls $ 176,349 $ 160,264 $ 672,930 $ 586,558
Space and Defense Controls 62,377 46,037 253,266 184,737
Industrial Systems 136,335 110,916 532,098 435,673
Components 89,837 72,768 340,941 283,282
Medical Devices 25,948 23,430 103,431 67,849
--------------- --------------- --------------- ---------------
Net sales $ 490,846 $ 413,415 $ 1,902,666 $ 1,558,099
=============== =============== =============== ===============
Operating Profit and Margins
Aircraft Controls $ 13,449 $ 17,493 $ 54,979 $ 61,198
7.6% 10.9% 8.2% 10.4%
Space and Defense Controls 5,963 5,548 29,261 24,211
9.6% 12.1% 11.6% 13.1%
Industrial Systems 16,708 13,797 73,467 57,470
12.3% 12.4% 13.8% 13.2%
Components 16,073 10,699 60,644 44,530
17.9% 14.7% 17.8% 15.7%
Medical Devices 2,148 2,819 9,062 6,931
8.3% 12.0% 8.8% 10.2%
--------------- --------------- --------------- ---------------
Total operating profit 54,341 50,356 227,413 194,340
11.1% 12.2% 12.0% 12.5%
Deductions from Operating Profit
Interest expense 9,683 9,123 37,739 29,538
Equity-based compensation expense 857 569 4,551 3,299
Corporate expenses and other 4,892 4,298 17,088 17,752
--------------- --------------- --------------- ---------------
Earnings before Income Taxes $ 38,909 $ 36,366 $ 168,035 $ 143,751
=============== =============== =============== ===============
MOOG INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
September 27, September 29,
2008 2007
--------------- ---------------
Cash $ 86,814 $ 83,856
Receivables 517,361 431,978
Inventories 408,295 359,250
Other current assets 77,915 61,767
--------------- ---------------
Total current assets 1,090,385 936,851
Property, plant and equipment 428,120 386,813
Goodwill and intangible assets 635,490 620,349
Other non-current assets 73,252 62,166
--------------- ---------------
Total assets $ 2,227,247 $ 2,006,179
=============== ===============
Notes payable $ 7,579 $ 3,354
Current installments of long-term debt 1,487 2,537
Contract loss reserves 20,536 12,362
Other current liabilities 347,491 301,975
--------------- ---------------
Total current liabilities 377,093 320,228
Long-term debt 661,994 611,633
Other long-term liabilities 193,750 197,106
--------------- ---------------
Total liabilities 1,232,837 1,128,967
Shareholders' equity 994,410 877,212
--------------- ---------------
Total liabilities and shareholders' equity $ 2,227,247 $ 2,006,179
=============== ===============