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| 8-K - MOOG INC. | v209430_8k.htm |
press
information
MOOG
INC., EAST AURORA, NEW YORK
14052 TEL-716/652-2000 FAX
-716/687-4457
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release
date
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Immediate
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contact
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Ann
Marie Luhr
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January
31, 2011
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716-687-4225
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MOOG
REPORTS EARNINGS PER SHARE UP 55%
Moog Inc.
(NYSE: MOG.A and 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 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:
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i.
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fluctuations
in general business cycles for commercial aircraft, military aircraft,
space and defense products, industrial capital goods and medical
devices;
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ii.
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our
dependence on government contracts that may not be fully funded or may be
terminated;
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iii.
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our
dependence on certain major customers, such as The Boeing Company and
Lockheed Martin, for a significant percentage of our
sales;
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iv.
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delays
by our customers in the timing of introducing new products, which may
affect our earnings and cash flow;
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v.
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the
possibility that the demand for our products may be reduced if we are
unable to adapt to technological change;
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vi.
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intense
competition, which may require us to lower prices or offer more favorable
terms of sale;
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vii.
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our
indebtedness, which could limit our operational and financial
flexibility;
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viii.
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the
possibility that new product and research and development efforts may not
be successful, which could reduce our sales and
profits;
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ix.
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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;
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x.
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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;
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xi.
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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;
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xii.
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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;
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xiii.
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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;
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xiv.
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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;
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xv.
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our
dependence on our management team and key personnel;
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xvi.
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the
possibility of a catastrophic loss of one or more of our manufacturing
facilities;
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xvii.
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the
possibility that future terror attacks, war or other civil disturbances
could negatively impact our business;
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xviii.
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that
our operations in foreign countries could expose us to political risks and
adverse changes in local, legal, tax and regulatory
schemes;
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xix.
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the
possibility that government regulation could limit our ability to sell our
products outside the United States;
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xx.
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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;
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xxi.
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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;
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xxii.
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changes
in medical reimbursement rates of insurers to medical service providers,
which could affect sales of our medical products;
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xxiii.
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the
possibility that litigation results may be unfavorable to
us;
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xxiv.
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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;
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xxv.
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foreign
currency fluctuations in those countries in which we do business and other
risks associated with international operations;
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xxvi.
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the
cost of compliance with environmental laws;
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xxvii.
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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;
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xxviii.
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the
inability to modify, to refinance or to utilize amounts presently
available to us under our credit facilities given uncertainties in the
credit markets;
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xxix.
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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
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xxx.
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our
customers’ inability to continue operations or to pay us due to adverse
economic conditions or their inability to access available
credit.
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CONSOLIDATED
STATEMENTS OF EARNINGS
(dollars
in thousands, except per share data)
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Three Months Ended
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||||||||
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January 1,
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January 2,
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|||||||
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2011
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2010
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Net
sales
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$ | 554,434 | $ | 495,178 | ||||
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Cost
of sales
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389,881 | 350,776 | ||||||
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Gross
profit
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164,553 | 144,402 | ||||||
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Research
and development
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23,475 | 23,882 | ||||||
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Selling,
general and administrative
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85,783 | 78,127 | ||||||
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Restructuring
expense
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58 | 1,819 | ||||||
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Interest
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9,211 | 10,728 | ||||||
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Other
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246 | 394 | ||||||
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Earnings
before income taxes
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45,780 | 29,452 | ||||||
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Income
taxes
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12,373 | 7,891 | ||||||
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Net
earnings
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$ | 33,407 | $ | 21,561 | ||||
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Net
earnings per share
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||||||||
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Basic
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$ | 0.74 | $ | 0.48 | ||||
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Diluted
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$ | 0.73 | $ | 0.47 | ||||
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Average
common shares outstanding
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||||||||
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Basic
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45,388,891 | 45,323,349 | ||||||
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Diluted
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45,906,552 | 45,592,874 | ||||||
Moog
Inc.
CONSOLIDATED
SALES AND OPERATING PROFIT
(dollars
in thousands)
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Three
Months Ended
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||||||||
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January
1,
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January
2,
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2011
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2010
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Net
Sales
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Aircraft
Controls
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$ | 195,951 | $ | 175,060 | ||||
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Space
and Defense Controls
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95,746 | 69,491 | ||||||
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Industrial
Systems
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143,745 | 136,352 | ||||||
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Components
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86,351 | 84,906 | ||||||
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Medical
Devices
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32,641 | 29,369 | ||||||
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Net
sales
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$ | 554,434 | $ | 495,178 | ||||
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Operating
Profit (Loss) and Margins
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||||||||
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Aircraft
Controls
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$ | 20,195 | $ | 17,610 | ||||
| 10.3 | % | 10.1 | % | |||||
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Space
and Defense Controls
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15,815 | 7,519 | ||||||
| 16.5 | % | 10.8 | % | |||||
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Industrial
Systems
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14,407 | 11,181 | ||||||
| 10.0 | % | 8.2 | % | |||||
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Components
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14,803 | 12,122 | ||||||
| 17.1 | % | 14.3 | % | |||||
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Medical
Devices
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(1,491 | ) | 139 | |||||
| (4.6 | )% | 0.5 | % | |||||
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Total
operating profit
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63,729 | 48,571 | ||||||
| 11.5 | % | 9.8 | % | |||||
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Deductions
from Operating Profit
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||||||||
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Interest
expense
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9,211 | 10,728 | ||||||
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Equity-based
compensation expense
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3,433 | 2,784 | ||||||
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Corporate
expenses and other
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5,305 | 5,607 | ||||||
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Earnings
before Income Taxes
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$ | 45,780 | $ | 29,452 | ||||
Moog
Inc.
CONSOLIDATED
BALANCE SHEETS
(dollars
in thousands)
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January 1,
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October 2,
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|||||||
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2011
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2010
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|||||||
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Cash
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$ | 104,722 | $ | 112,421 | ||||
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Receivables
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614,361 | 619,861 | ||||||
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Inventories
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471,013 | 460,857 | ||||||
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Other
current assets
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102,921 | 99,140 | ||||||
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Total
current assets
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1,293,017 | 1,292,279 | ||||||
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Property,
plant and equipment
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486,943 | 486,944 | ||||||
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Goodwill
and intangible assets
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899,353 | 910,690 | ||||||
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Other
non-current assets
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21,269 | 22,221 | ||||||
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Total
assets
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$ | 2,700,582 | $ | 2,712,134 | ||||
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Notes
payable
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$ | 5,029 | $ | 1,991 | ||||
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Current
installments of long-term debt
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7,279 | 5,405 | ||||||
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Contract
loss reserves
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42,411 | 40,810 | ||||||
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Other
current liabilities
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432,469 | 431,268 | ||||||
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Total
current liabilities
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487,188 | 479,474 | ||||||
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Long-term
debt
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707,562 | 757,320 | ||||||
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Other
long-term liabilities
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351,568 | 354,384 | ||||||
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Total
liabilities
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1,546,318 | 1,591,178 | ||||||
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Shareholders'
equity
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1,154,264 | 1,120,956 | ||||||
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Total
liabilities and shareholders' equity
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$ | 2,700,582 | $ | 2,712,134 | ||||