EAST AURORA, N.Y., Feb. 1 /PRNewswire-FirstCall/ -- Moog Inc. (NYSE: MOG.A and MOG.B) today announced first quarter sales of $495 million, up 11% from a year ago. Net earnings were $21.6 million and earnings per share were $.47. Earnings per share were down a third from last year's first quarter, the quarter before the recession began to affect the Company's results.
Aircraft segment sales of $175 million were up $12 million from last year, helped by sales associated with the fiscal 2009 acquisitions of the Wolverhampton flight controls business and the Fernau navigation aids business. Military aircraft sales of $109 million were up 6%, including $10 million from Wolverhampton. Sales were lower on the F-35 Joint Strike Fighter as the program transitions from development to production while aftermarket sales at $38 million were up over 40%.
Commercial aircraft sales of $57 million were level with the same quarter a year ago. Commercial aircraft sales from Wolverhampton of $11 million offset declines in both business jet products and in the aftermarket. OEM sales to Boeing and Airbus, excluding acquisition sales, maintained the same level as last year.
Space and Defense sales were $69 million in the quarter. Last year's first quarter sales of $71 million included $14 million of sales for the Driver's Vision Enhancer which did not repeat this year. Sales increased in controls for satellites, satellite launch vehicles and the Company's new initiatives in security and surveillance and Naval applications. Work on the NASA Constellation program was up only slightly from last year.
Industrial Systems sales of $136 million were up 24% from a year ago. The Company's recent acquisitions in the wind energy market added $44 million in sales to the quarter. Sales of controls for capital equipment, power generation and motion simulators continue to run at reduced levels.
Components Group sales of $85 million were up 4% from a year ago. The sales increases were in the aircraft and defense products which generated $56 million in revenue in the quarter. The largest sales increases were in fiber optic controls for the Eurofighter and de-icing systems for the Black Hawk helicopter. These increases offset declines in sales of marine, medical and industrial components.
Medical Devices segment sales at $29 million had the benefit of two recent acquisitions. Sales in the legacy product lines increased by 17% however, primarily as a result of increased sales of IV infusion pumps and administration sets.
Twelve month consolidated backlog on January 2, 2010 was $1.1 billion, up $220 million, or 25%, from a year ago, primarily related to acquisitions.
The Company has reaffirmed its guidance for fiscal 2010 and continues to project sales of $2.12 billion, net earnings of $103 million and earnings per share of $2.25 with a range of +/- $.10.
"Our Company is in the early stages of a recovery from the recession-impacted results of last year," said R.T. Brady, Chairman and CEO. "Our recent acquisitions have provided sales momentum and the segments that were most affected last year are slowly improving their profitability. We're anticipating slow but steady improvement as the year progresses."
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:
- fluctuations in general business cycles for commercial aircraft, military aircraft, space and defense products, industrial capital goods and medical devices;
- our dependence on government contracts that may not be fully funded or may be terminated;
- our dependence on certain major customers, such as The Boeing Company and Lockheed Martin, for a significant percentage of our sales;
- delays by our customers in the timing of introducing new products, which may affect our earnings and cash flow;
- the possibility that the demand for our products may be reduced if we are unable to adapt to technological change;
- intense competition, which may require us to lower prices or offer more favorable terms of sale;
- our indebtedness, which could limit our operational and financial flexibility;
- the possibility that new product and research and development efforts may not be successful, which could reduce our sales and profits;
- 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;
- 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;
- 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;
- 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;
- 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;
- 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;
- our dependence on our management team and key personnel;
- the possibility of a catastrophic loss of one or more of our manufacturing facilities;
- the possibility that future terror attacks, war or other civil disturbances could negatively impact our business;
- that our operations in foreign countries could expose us to political risks and adverse changes in local, legal, tax and regulatory schemes;
- the possibility that government regulation could limit our ability to sell our products outside the United States;
- 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;
- 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;
- changes in medical reimbursement rates of insurers to medical service providers, which could affect sales of our medical products;
- the possibility that litigation results may be unfavorable to us;
- 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;
- foreign currency fluctuations in those countries in which we do business and other risks associated with international operations;
- the cost of compliance with environmental laws;
- 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;
- the inability to modify, to refinance or to utilize amounts presently available to us under our credit facilities given uncertainties in the credit markets;
- 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
- 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
January 2, December 27,
2010 2008
---------- ----------
Net sales $495,178 $446,088
Cost of sales 350,776 308,240
---------- ----------
Gross profit 144,402 137,848
---------- ----------
Research and development 23,882 25,130
Selling, general and
administrative 78,127 69,199
Restructuring expense 1,819 -
Interest 10,728 9,601
Equity in earnings of LTi
and other 394 (2,455)
---------- ----------
Earnings before
income taxes 29,452 36,373
Income taxes 7,891 6,103
---------- ----------
Net earnings $21,561 $30,270
========== ==========
Net earnings per
share
Basic $0.48 $0.71
========== ==========
Diluted $0.47 $0.70
========== ==========
Average common shares
outstanding
Basic 45,323,349 42,607,289
========== ==========
Diluted 45,592,874 42,986,088
========== ==========
MOOG INC.
CONSOLIDATED SALES AND OPERATING PROFIT
(dollars in thousands)
Three Months Ended
January 2, December 27,
2010 2008
----------- -----------
Net Sales
Aircraft Controls $175,060 $163,149
Space and Defense Controls 69,491 71,382
Industrial Systems 136,352 110,035
Components 84,906 81,504
Medical Devices 29,369 20,018
----------- -----------
Net sales $495,178 $446,088
=========== ===========
Operating Profit (Loss) and
Margins
Aircraft Controls $17,610 $13,500
10.1% 8.3%
Space and Defense
Controls 7,519 13,580
10.8% 19.0%
Industrial Systems 11,181 11,499
8.2% 10.5%
Components 12,122 15,001
14.3% 18.4%
Medical Devices 139 (2,224)
0.5% (11.1%)
----------- -----------
Total operating profit 48,571 51,356
9.8% 11.5%
Deductions from Operating Profit
Interest expense 10,728 9,601
Equity-based compensation
expense 2,784 2,589
Corporate expenses and other 5,607 2,793
----------- -----------
Earnings before Income Taxes $29,452 $36,373
=========== ===========
MOOG INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
January 2, October 3,
2010 2009
----------- -----------
Cash $101,301 $81,493
Receivables 523,265 547,571
Inventories 465,691 484,261
Other current assets 102,000 97,073
----------- -----------
Total current assets 1,192,257 1,210,398
Property, plant and equipment 477,823 481,726
Goodwill and intangible assets 910,081 918,770
Other non-current assets 19,545 23,423
----------- -----------
Total assets $2,599,706 $2,634,317
=========== ==========
Notes payable $16,460 $16,971
Current installments of
long-term debt 1,458 1,541
Contract loss reserves 43,850 50,190
Other current liabilities 353,844 377,559
----------- -----------
Total current liabilities 415,612 446,261
Long-term debt 788,214 814,574
Other long-term liabilities 305,022 308,449
----------- -----------
Total liabilities 1,508,848 1,569,284
Shareholders' equity 1,090,858 1,065,033
----------- -----------
Total liabilities and
shareholders' equity $2,599,706 $2,634,317
=========== ===========
SOURCE Moog Inc.
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