MOGB Vaneck Esg Moat

Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and controls systems, today reported fiscal year 2023 diluted earnings per share of $5.34 and adjusted diluted earnings per share of $6.15.

(in millions, except per share results)

 

Three Months Ended

 

Twelve Months Ended

 

 

Q4 2023

 

Q4 2022

 

Deltas

 

Q4 2023

 

Q4 2022

 

Deltas

Net sales

 

$

872

 

 

$

768

 

 

 

14

%

 

$

3,319

 

 

$

3,036

 

 

 

9

%

Operating margin

 

 

10.1

%

 

 

8.6

%

 

150 bps

 

 

10.3

%

 

 

9.3

%

 

100 bps

Adjusted operating margin

 

 

12.5

%

 

 

10.4

%

 

210 bps

 

 

10.9

%

 

 

10.2

%

 

70 bps

Diluted net earnings per share

 

$

1.23

 

 

$

0.92

 

 

 

34

%

 

$

5.34

 

 

$

4.83

 

 

 

11

%

Adjusted diluted net earnings per share

 

$

2.10

 

 

$

1.36

 

 

 

54

%

 

$

6.15

 

 

$

5.56

 

 

 

11

%

Adjusted free cash flow

 

$

105

 

 

$

19

 

 

$

86

 

 

$

(37

)

 

$

7

 

 

$

(45

)

See the reconciliations of adjusted financial results to reported results included in the financial statements herein for the quarters ended September 30, 2023 and October 1, 2022.

Quarter Highlights

• Record net sales of $872 million, an increase of 14%, with double-digit growth in each of our segments.
• Adjusted operating margin expanded 210 basis points to 12.5%, benefiting from pricing and simplification.
• Adjusted diluted earnings per share increased 54% due to incremental operating profit.
• Adjusted free cash flow increased $86 million, driven by strong collections and timing of payments.

Year Highlights

• Net sales increased 9% to a record $3.3 billion, or 11% excluding divestitures and foreign exchange impacts.
• Adjusted operating margin expanded 70 basis points to 10.9%, benefiting from pricing and simplification.
• Adjusted diluted earnings per share increased 11%, driven by the growth in operating profit, offset by higher interest expense.
• Adjusted free cash flow use resulted from growth in net working capital, primarily physical inventories.
• Record twelve-month backlog of $2.4 billion supports continued sales growth in aerospace and defense programs.

"We had an exceptional quarter that rounded out a great year for our company," said Pat Roche, CEO. "Sales were very strong, and margin enhancement through our pricing and simplification initiatives are delivering results. We are on-track to deliver our long-term Investor Day financial targets."

Quarter Results

Sales in the fourth quarter of 2023 increased across all segments compared to the fourth quarter of 2022. Aircraft Controls' sales increased 16% to $377 million, as the continued market recovery in OEM widebody aircraft and business jet activity increased commercial aircraft sales 42%. Sales in Space and Defense Controls increased 11% to $241 million due to higher demand for defense products in both space and defense applications. Industrial Systems' sales increased 12% to $254 million due to higher demand for industrial automation programs and flight simulation systems.

Adjusted operating margin increased 210 basis points to 12.5% in the fourth quarter of 2023 compared to the fourth quarter of 2022. Aircraft Controls' adjusted operating margin increased 210 basis points driven by retroactive pricing and 80/20 initiatives. These benefits were tempered by additional charges on near-complete funded development programs. Space and Defense Controls' adjusted operating margin expanded 340 basis points due to lower charges associated with our space vehicles development programs and pricing benefits. Adjusted operating margin for Industrial Systems increased 110 basis points as a result of pricing initiatives.

Non-operating expenses in the fourth quarter of 2023 included the benefits of a favorable litigation settlement and lower effective tax rate, which were not anticipated in our prior guidance. These benefits were moderated by incremental interest expense.

Year Results

Sales in fiscal 2023 increased across all segments compared to fiscal 2022. Aircraft Controls' sales increased 11% to $1.4 billion, reflecting the commercial recovery, partially offset by lower funded development activities for military programs. Space and Defense Controls' sales of $947 million increased 11%, after adjusting for the divestiture of the security business last year, due to growth in defense programs across our product portfolio. Industrial Systems' sales of $983 million increased 12%, excluding last year's sonar business divestiture and foreign exchange impacts, due to increased demand for industrial automation and flight simulation programs.

Adjusted operating margin increased 70 basis points to 10.9% compared to 2022. Adjusted operating margin increased 200 basis points in Industrial Systems and increased 70 basis points in Aircraft Controls due largely to pricing benefits. Also within Aircraft Controls, margin expansion was impacted by additional charges for military funded development programs. Space and Defense Controls' adjusted operating margin decreased 40 basis points as charges associated with our space vehicles development programs more than offset underlying stronger operational results.

Free Cash Flow Results

Free cash flow was $105 million in the fourth quarter of 2023. Higher collections from customers and the timing of compensation and vendor payments contributed to the reduction in working capital. Capital expenditures were $48 million in the quarter. Free cash flow in 2023 was a cash use of $37 million, as growing customer demand as well as supply chain constraints drove working capital pressures, primarily in physical inventories. Capital expenditures were $173 million in the year, reflecting necessary investments in facilities and equipment to support customer demand.

2024 Financial Guidance

"Fiscal year 2024 will be another positive step on our journey towards our long-term financial targets," said Jennifer Walter, CFO. "Our operating margin will expand by over 100 basis points and earnings per share will increase over 10%."

(in millions, except per share results)

 

 

 

 

FY 2024 Guidance

 

 

Initial

Net sales

 

$

3,450

 

Operating margin

 

 

12.0

%

Diluted net earnings per share

 

$

6.80

 

Earnings per share figures are forecasted to be within range of +/- $0.20.

 

 

Conference call information

In conjunction with today’s release, Pat Roche, CEO, and Jennifer Walter, CFO, will host a conference call today beginning at 10:00 a.m. ET, which will be simultaneously broadcast live online. Listeners can access the call live, or in replay mode, at www.moog.com/investors/communications. Supplemental financial data will be available on the website approximately 90 minutes prior to the conference call.

Cautionary Statement

Information included or incorporated by reference in this press release 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 forward-looking 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. In evaluating these forward-looking statements, you should carefully consider the factors set forth below.

Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the SEC and include the following:

Strategic risks

• We operate in highly competitive markets with competitors who may have greater resources than we possess;
• Our research and development and innovation efforts are substantial and may not be successful, which could reduce our sales and earnings;
• If we are unable to adequately enforce and protect our intellectual property or defend against assertions of infringement, our business and our ability to compete could be harmed; and
• Our sales and earnings may be affected if we cannot identify, acquire or integrate strategic acquisitions, or as we conduct portfolio shaping and footprint rationalization initiatives.

Market condition risks

• 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 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;
• The loss of The Boeing Company or Lockheed Martin as a customer or a significant reduction in sales to either company could adversely impact our operating results; and
• We may not realize the full amounts reflected in our backlog as revenue, which could adversely affect our future revenue and growth prospects.

Operational risks

• A constrained supply chain, as well as inflated prices, across various raw materials and third-party provided components and sub-assemblies have had, and could continue to have, a material impact on our ability to manufacture and ship our products, in addition to adversely impacting our operating profit and balance sheet;
• 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;
• We face, and may continue to face, risks related to information systems interruptions, intrusions or new software implementations, which may adversely affect our business operations;
• We may not be able to prevent, or timely detect, issues with our products and our manufacturing processes, which may adversely affect our operations and our earnings; and
• The failure or misuse of 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.

Financial risks

• We make estimates in accounting for over-time 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;
• Our indebtedness and restrictive covenants under our credit facilities and indenture governing our senior notes could limit our operational and financial flexibility;
• Significant changes in discount rates, rates of return on pension assets, mortality tables and other factors could adversely affect our earnings and equity and increase our 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; and
• Unforeseen exposure to additional income tax liabilities may affect our operating results.

Legal and compliance risks

• Contracting on government programs is subject to significant regulation, including rules related to bidding, billing and accounting standards, and any false claims or non-compliance could subject us to fines, penalties or possible debarment;
• Our operations in foreign countries expose us to currency, political and trade risks and adverse changes in local legal and regulatory environments could impact our results of operations;
• Government regulations could limit our ability to sell our products outside the United States and otherwise adversely affect our business;
• We are involved in various legal proceedings, the outcome of which may be unfavorable to us;
• Our operations are subject to environmental laws and complying with those laws may cause us to incur significant costs;
• We may face reputational, regulatory or financial risks from a perceived, or an actual, failure to achieve our sustainability goals; and
• The recently received invalidation of our facility security clearance by the U.S. Defense Counterintelligence and Security Agency could impact potential future business as well as adversely affect our operating results.

General risks

• Future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business; and
• Our performance could suffer if we cannot maintain our culture as well as attract, retain and engage our employees.

While we believe we have identified and discussed above the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial 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. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this report, except as required by law.

Moog Inc.

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

(dollars in thousands, except per share data)

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net sales

 

$

872,051

 

 

$

767,999

 

 

$

3,319,122

 

 

$

3,035,783

 

Cost of sales

 

 

623,808

 

 

 

564,642

 

 

 

2,423,245

 

 

 

2,211,384

 

Inventory write-down

 

 

4,345

 

 

 

191

 

 

 

4,345

 

 

 

3,598

 

Gross profit

 

 

243,898

 

 

 

203,166

 

 

 

891,532

 

 

 

820,801

 

Research and development

 

 

29,444

 

 

 

25,209

 

 

 

106,551

 

 

 

109,527

 

Selling, general and administrative

 

 

118,041

 

 

 

111,829

 

 

 

469,836

 

 

 

448,531

 

Interest

 

 

18,227

 

 

 

11,381

 

 

 

63,578

 

 

 

36,757

 

Asset impairment

 

 

12,974

 

 

 

2,125

 

 

 

14,628

 

 

 

18,053

 

Restructuring

 

 

3,260

 

 

 

1,140

 

 

 

7,997

 

 

 

9,509

 

Loss on sale of businesses

 

 

900

 

 

 

19,492

 

 

 

900

 

 

 

3,346

 

Gain on sale of buildings

 

 

—

 

 

 

(9,075

)

 

 

(10,030

)

 

 

(9,075

)

Pension settlement

 

 

12,542

 

 

 

—

 

 

 

12,542

 

 

 

—

 

Other

 

 

(599

)

 

 

(1,969

)

 

 

9,478

 

 

 

1,174

 

Earnings before income taxes

 

 

49,109

 

 

 

43,034

 

 

 

216,052

 

 

 

202,979

 

Income taxes

 

 

9,527

 

 

 

13,618

 

 

 

45,054

 

 

 

47,802

 

Net earnings

 

$

39,582

 

 

$

29,416

 

 

$

170,998

 

 

$

155,177

 

 

 

 

 

 

 

 

 

 

Net earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

1.24

 

 

$

0.92

 

 

$

5.37

 

 

$

4.85

 

Diluted

 

$

1.23

 

 

$

0.92

 

 

$

5.34

 

 

$

4.83

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

31,893,646

 

 

 

31,945,478

 

 

 

31,831,687

 

 

 

31,977,482

 

Diluted

 

 

32,187,501

 

 

 

32,086,583

 

 

 

32,044,226

 

 

 

32,117,028

 

 

 

 

 

 

 

 

 

 

Moog Inc.

RECONCILIATION TO ADJUSTED NET EARNINGS BEFORE TAXES, INCOMES TAXES, NET EARNINGS AND DILUTIVE NET EARNINGS PER SHARE (UNAUDITED)

(dollars in thousands)

   

 

Three Months Ended

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

As Reported:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

49,109

 

 

$

43,034

 

 

$

216,052

 

 

$

202,979

 

Income taxes

 

 

9,527

 

 

 

13,618

 

 

 

45,054

 

 

 

47,802

 

Effective income tax rate

 

 

19.4

%

 

 

31.6

%

 

 

20.9

%

 

 

23.6

%

Net earnings

 

 

39,582

 

 

 

29,416

 

 

 

170,998

 

 

 

155,177

 

Diluted net earnings per share

 

$

1.23

 

 

$

0.92

 

 

$

5.34

 

 

$

4.83

 

 

 

 

 

 

 

 

 

 

Loss on Sale of Businesses:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

900

 

 

$

19,492

 

 

$

900

 

 

$

3,346

 

Income taxes

 

 

212

 

 

 

970

 

 

 

212

 

 

 

(3,303

)

Net earnings

 

 

688

 

 

 

18,522

 

 

 

688

 

 

 

6,649

 

Diluted net earnings per share

 

$

0.02

 

 

$

0.58

 

 

$

0.02

 

 

$

0.21

 

 

 

 

 

 

 

 

 

 

Gain on Sale of Buildings:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

—

 

 

$

(9,075

)

 

$

(10,030

)

 

$

(9,075

)

Income taxes

 

 

—

 

 

 

(2,142

)

 

 

(2,086

)

 

 

(2,142

)

Net earnings

 

 

—

 

 

 

(6,933

)

 

 

(7,944

)

 

 

(6,933

)

Diluted net earnings per share

 

$

—

 

 

$

(0.22

)

 

$

(0.25

)

 

$

(0.22

)

 

 

 

 

 

 

 

 

 

Pension Settlement:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

12,542

 

 

$

—

 

 

$

12,542

 

 

$

—

 

Income taxes

 

 

2,960

 

 

 

—

 

 

 

2,960

 

 

 

—

 

Net earnings

 

 

9,582

 

 

 

—

 

 

 

9,582

 

 

 

—

 

Diluted net earnings per share

 

$

0.30

 

 

$

—

 

 

$

0.30

 

 

$

—

 

 

 

 

 

 

 

 

 

 

Asset Impairment:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

12,974

 

 

$

2,125

 

 

$

14,628

 

 

$

18,053

 

Income taxes

 

 

937

 

 

 

502

 

 

 

1,285

 

 

 

4,219

 

Net earnings

 

 

12,037

 

 

 

1,623

 

 

 

13,343

 

 

 

13,834

 

Diluted net earnings per share

 

$

0.37

 

 

$

0.05

 

 

$

0.42

 

 

$

0.43

 

 

 

 

 

 

 

 

 

 

Inventory Write-down, Restructuring and Other:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

7,605

 

 

$

1,332

 

 

$

13,391

 

 

$

13,107

 

Income taxes

 

 

1,746

 

 

 

343

 

 

 

3,050

 

 

 

3,228

 

Net earnings

 

 

5,859

 

 

 

989

 

 

 

10,341

 

 

 

9,879

 

Diluted net earnings per share

 

$

0.18

 

 

$

0.03

 

 

$

0.32

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

83,130

 

 

$

56,908

 

 

$

247,483

 

 

$

228,410

 

Income taxes

 

 

15,382

 

 

 

13,291

 

 

 

50,475

 

 

 

49,804

 

Effective income tax rate

 

 

18.5

%

 

 

23.4

%

 

 

20.4

%

 

 

21.8

%

Net earnings

 

 

67,748

 

 

 

43,617

 

 

 

197,008

 

 

 

178,606

 

Diluted net earnings per share

 

$

2.10

 

 

$

1.36

 

 

$

6.15

 

 

$

5.56

 

The diluted net earnings per share associated with the adjustments in the table above may not reconcile when totaled due to rounding.

Results shown above have been adjusted to exclude impacts associated with the sale of our Navigation Aids business formerly in Aircraft Controls; the sale of buildings formerly used in Industrial Systems, a one-time pension settlement charge stemming from those participants that opted to take a one time lump sum distribution in lieu of continuing monthly payments; asset impairment resulting from inventory write-downs, an announced program retirement; as well as, restructuring and other charges related to the impact of continued portfolio shaping activities and the Ukraine crisis. While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.

Moog Inc.

CONSOLIDATED SALES AND OPERATING PROFIT (UNAUDITED)

(dollars in thousands)

   

 

Three Months Ended

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net sales:

 

 

 

 

 

 

 

 

Aircraft Controls

 

$

376,859

 

 

$

323,859

 

 

$

1,389,147

 

 

$

1,256,461

 

Space and Defense Controls

 

 

241,211

 

 

 

217,494

 

 

 

947,251

 

 

 

872,343

 

Industrial Systems

 

 

253,981

 

 

 

226,646

 

 

 

982,724

 

 

 

906,979

 

Net sales

 

$

872,051

 

 

$

767,999

 

 

$

3,319,122

 

 

$

3,035,783

 

Operating profit:

 

 

 

 

 

 

 

 

Aircraft Controls

 

$

45,335

 

 

$

34,811

 

 

$

144,803

 

 

$

123,620

 

 

 

 

12.0

%

 

 

10.7

%

 

 

10.4

%

 

 

9.8

%

Space and Defense Controls

 

 

29,563

 

 

 

16,102

 

 

 

95,949

 

 

 

86,844

 

 

 

 

12.3

%

 

 

7.4

%

 

 

10.1

%

 

 

10.0

%

Industrial Systems

 

 

12,982

 

 

 

14,986

 

 

 

102,165

 

 

 

72,384

 

 

 

 

5.1

%

 

 

6.6

%

 

 

10.4

%

 

 

8.0

%

Total operating profit

 

 

87,880

 

 

 

65,899

 

 

 

342,917

 

 

 

282,848

 

 

 

 

10.1

%

 

 

8.6

%

 

 

10.3

%

 

 

9.3

%

Deductions from operating profit:

 

 

 

 

 

 

 

 

Interest expense

 

 

18,227

 

 

 

11,381

 

 

 

63,578

 

 

 

36,757

 

Equity-based compensation expense

 

 

2,461

 

 

 

2,135

 

 

 

10,582

 

 

 

8,882

 

Pension settlement

 

 

12,542

 

 

 

—

 

 

 

12,542

 

 

 

—

 

Non-service pension expense

 

 

2,986

 

 

 

1,673

 

 

 

12,324

 

 

 

6,072

 

Corporate and other expenses, net

 

 

2,555

 

 

 

7,676

 

 

 

27,839

 

 

 

28,158

 

Earnings before income taxes

 

$

49,109

 

 

$

43,034

 

 

$

216,052

 

 

$

202,979

 

Moog Inc.

RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)

(dollars in thousands)

   

 

Three Months Ended

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Aircraft Controls operating profit - as reported

 

$

45,335

 

 

$

34,811

 

 

$

144,803

 

 

$

123,620

 

Inventory write-down

 

 

1,616

 

 

 

—

 

 

 

1,616

 

 

 

202

 

Asset impairment

 

 

235

 

 

 

—

 

 

 

1,670

 

 

 

15,487

 

Loss (gain) on sale of business

 

 

900

 

 

 

—

 

 

 

900

 

 

 

(16,146

)

Restructuring and other

 

 

168

 

 

 

—

 

 

 

443

 

 

 

3,795

 

Aircraft Controls operating profit - as adjusted

 

$

48,254

 

 

$

34,811

 

 

$

149,432

 

 

$

126,958

 

 

 

 

12.8

%

 

 

10.7

%

 

 

10.8

%

 

 

10.1

%

 

 

 

 

 

 

 

 

 

Space and Defense Controls operating profit - as reported

 

$

29,563

 

 

$

16,102

 

 

$

95,949

 

 

$

86,844

 

Inventory write-down

 

 

—

 

 

 

192

 

 

 

—

 

 

 

1,692

 

Asset impairment

 

 

—

 

 

 

—

 

 

 

219

 

 

 

—

 

Loss on sale of business

 

 

—

 

 

 

4,112

 

 

 

—

 

 

 

4,112

 

Restructuring and other

 

 

1,348

 

 

 

139

 

 

 

2,902

 

 

 

2,063

 

Space and Defense Controls operating profit - as adjusted

 

$

30,911

 

 

$

20,545

 

 

$

99,070

 

 

$

94,711

 

 

 

 

12.8

%

 

 

9.4

%

 

 

10.5

%

 

 

10.9

%

 

 

 

 

 

 

 

 

 

Industrial Systems operating profit - as reported

 

$

12,982

 

 

$

14,986

 

 

$

102,165

 

 

$

72,384

 

Inventory write-down

 

 

2,729

 

 

 

—

 

 

 

2,729

 

 

 

1,705

 

Asset impairment

 

 

12,739

 

 

 

2,125

 

 

 

12,739

 

 

 

2,767

 

Loss on sale of business

 

 

—

 

 

 

15,379

 

 

 

—

 

 

 

15,379

 

Gain on sale of buildings

 

 

—

 

 

 

(9,075

)

 

 

(10,030

)

 

 

(9,075

)

Restructuring and other

 

 

1,744

 

 

 

1,001

 

 

 

5,701

 

 

 

3,450

 

Industrial Systems operating profit - as adjusted

 

$

30,194

 

 

$

24,416

 

 

$

113,304

 

 

$

86,610

 

 

 

 

11.9

%

 

 

10.8

%

 

 

11.5

%

 

 

9.5

%

 

 

 

 

 

 

 

 

 

Total operating profit - as adjusted

 

$

109,359

 

 

$

79,772

 

 

$

361,806

 

 

$

308,279

12.5

%

10.4

%

10.9

%

10.2

%

Moog Inc.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

   

 

September 30, 2023

 

October 1, 2022

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

68,959

 

 

$

101,990

 

Restricted cash

 

 

185

 

 

 

15,338

 

Receivables, net

 

 

434,723

 

 

 

375,502

 

Unbilled receivables

 

 

706,601

 

 

 

614,760

 

Inventories, net

 

 

724,002

 

 

 

588,466

 

Prepaid expenses and other current assets

 

 

50,862

 

 

 

60,349

 

Total current assets

 

 

1,985,332

 

 

 

1,756,405

 

Property, plant and equipment, net

 

 

814,696

 

 

 

668,908

 

Operating lease right-of-use assets

 

 

56,067

 

 

 

69,072

 

Goodwill

 

 

821,301

 

 

 

805,320

 

Intangible assets, net

 

 

71,637

 

 

 

85,410

 

Deferred income taxes

 

 

8,749

 

 

 

8,630

 

Other assets

 

 

50,254

 

 

 

38,096

 

Total assets

 

$

3,808,036

 

 

$

3,431,841

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Current installments of long-term debt

 

$

—

 

 

$

916

 

Accounts payable

 

 

264,573

 

 

 

232,104

 

Accrued compensation

 

 

111,154

 

 

 

93,141

 

Contract advances and progress billings

 

 

377,977

 

 

 

296,899

 

Accrued liabilities and other

 

 

211,769

 

 

 

215,376

 

Total current liabilities

 

 

965,473

 

 

 

838,436

 

Long-term debt, excluding current installments

 

 

863,092

 

 

 

836,872

 

Long-term pension and retirement obligations

 

 

157,455

 

 

 

140,602

 

Deferred income taxes

 

 

37,626

 

 

 

63,527

 

Other long-term liabilities

 

 

148,303

 

 

 

115,591

 

Total liabilities

 

 

2,171,949

 

 

 

1,995,028

 

Shareholders’ equity

 

 

 

 

Common stock - Class A

 

 

43,822

 

 

 

43,807

 

Common stock - Class B

 

 

7,458

 

 

 

7,473

 

Additional paid-in capital

 

 

608,270

 

 

 

516,123

 

Retained earnings

 

 

2,496,979

 

 

 

2,360,055

 

Treasury shares

 

 

(1,057,938

)

 

 

(1,047,012

)

Stock Employee Compensation Trust

 

 

(114,769

)

 

 

(73,602

)

Supplemental Retirement Plan Trust

 

 

(93,126

)

 

 

(58,989

)

Accumulated other comprehensive loss

 

 

(254,609

)

 

 

(311,042

)

Total shareholders’ equity

 

 

1,636,087

 

 

 

1,436,813

 

Total liabilities and shareholders’ equity

 

$

3,808,036

 

 

$

3,431,841

 

Moog Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

   

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net earnings

 

$

170,998

 

 

$

155,177

 

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

 

 

 

 

Depreciation

 

 

78,692

 

 

 

75,238

 

Amortization

 

 

11,541

 

 

 

13,151

 

Deferred income taxes

 

 

(34,700

)

 

 

11,739

 

Equity-based compensation expense

 

 

10,582

 

 

 

8,882

 

Loss on sale of businesses

 

 

900

 

 

 

3,346

 

Gain on sale of buildings

 

 

(10,030

)

 

 

(9,075

)

Asset impairment and inventory write-down

 

 

18,973

 

 

 

21,651

 

Pension settlement

 

 

12,542

 

 

 

—

 

Other

 

 

6,244

 

 

 

6,818

 

Changes in assets and liabilities providing (using) cash:

 

 

 

 

Receivables

 

 

(56,575

)

 

 

7,668

 

Unbilled receivables

 

 

(87,915

)

 

 

(94,535

)

Inventories

 

 

(130,378

)

 

 

(28,677

)

Accounts payable

 

 

28,641

 

 

 

43,349

 

Contract advances and progress billings

 

 

79,983

 

 

 

42,097

 

Accrued expenses

 

 

(1,692

)

 

 

(4,445

)

Accrued income taxes

 

 

22,038

 

 

 

3,070

 

Net pension and post retirement liabilities

 

 

13,940

 

 

 

18,093

 

Other assets and liabilities

 

 

2,151

 

 

 

(26,745

)

Net cash provided by operating activities

 

 

135,935

 

 

 

246,802

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

—

 

 

 

(11,832

)

Purchase of property, plant and equipment

 

 

(173,286

)

 

 

(139,431

)

Net proceeds from businesses sold

 

 

1,892

 

 

 

57,315

 

Net proceeds from buildings sold

 

 

19,702

 

 

 

13,297

 

Other investing transactions

 

 

(11,455

)

 

 

(4,573

)

Net cash used by investing activities

 

 

(163,147

)

 

 

(85,224

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from revolving lines of credit

 

 

1,044,101

 

 

 

840,475

 

Payments on revolving lines of credit

 

 

(1,017,420

)

 

 

(827,801

)

Payments on long-term debt

 

 

(916

)

 

 

(80,364

)

Payments on finance lease obligations

 

 

(4,620

)

 

 

(2,524

)

Payment of dividends

 

 

(34,074

)

 

 

(32,970

)

Proceeds from sale of treasury stock

 

 

19,785

 

 

 

18,414

 

Purchase of outstanding shares for treasury

 

 

(29,306

)

 

 

(48,558

)

Proceeds from sale of stock held by SECT

 

 

15,713

 

 

 

13,250

 

Purchase of stock held by SECT

 

 

(14,251

)

 

 

(14,830

)

Other financing transactions

 

 

(2,027

)

 

 

—

 

Net cash used by financing activities

 

 

(23,015

)

 

 

(134,908

)

Effect of exchange rate changes on cash

 

 

2,043

 

 

 

(10,256

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

(48,184

)

 

 

16,414

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

117,328

 

 

 

100,914

 

Cash, cash equivalents and restricted cash at end of period

 

$

69,144

 

 

$

117,328

 

Moog Inc.

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (UNAUDITED)

(dollars in thousands)

   

 

Three Months Ended

 

Twelve Months Ended

 

 

September 30, 2023

 

October 1, 2022

 

September 30, 2023

 

October 1, 2022

Net cash provided by operating activities

 

$

153,032

 

 

$

62,538

 

 

$

135,935

 

 

$

246,802

 

Purchase of property, plant and equipment

 

 

(48,212

)

 

 

(32,718

)

 

 

(173,286

)

 

 

(139,431

)

Free cash flow

 

 

104,820

 

 

 

29,820

 

 

 

(37,351

)

 

 

107,371

 

Securitization

 

 

—

 

 

 

(10,900

)

 

 

—

 

 

 

(100,000

)

Adjusted free cash flow

 

$

104,820

 

 

$

18,920

 

 

$

(37,351

)

 

$

7,371

 

Amounts may not reconcile when totaled due to rounding.

Free cash flow is defined as net cash provided by operating activities less capital expenditures. Adjusted free cash flow is defined as free cash flow adjusted for securitization activity. The securitization under GAAP reduced 2022 receivables and net debt and increased cash flow from operations. Free cash flow and adjusted free cash flow are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies, however management believes these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company. This information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231103950835/en/

Aaron Astrachan - 716.687.4225