EAST AURORA, N.Y., July 24 /PRNewswire-FirstCall/ -- Moog Inc.
(NYSE: MOG.ANYSE:andNYSE:MOG.B) announced today third quarter
earnings of $15.9 million, and earnings per share of $.37, about
half of last year's level of $.72 per share. Sales for the quarter
of $445 million were down 10% from a year ago. In April, the
Company revised its guidance for the year and projected mid-range
earnings per share of $1.95. Year to date earnings per share of
$1.63 are slightly ahead of that pace. "Last year at this time our
Company had not been affected by the global recession," said R. T.
Brady, Chairman and CEO. "This year the recession has found some
parts of our Company. We've had to adjust our expectations and this
quarter's results are slightly ahead of that adjusted plan. In the
quarter, a heavy restructuring expense was offset by an unusually
low tax rate. We've completed our forecast for 2010 which suggests
that we will have a recovery even if the economy doesn't." Aircraft
sales in the quarter of $162 million were 8% lower than last year.
Sales were up in military aircraft production programs but the
Company has completed much of the F-35 development work so revenues
on that program were lower. Also, sales were down in commercial
transports and business jets. Total commercial aircraft sales were
down 29% in the quarter. The Navigational Aids product line
provided $11 million in sales. Sales in Space and Defense of $65
million were up 2% in the quarter. Positive growth was achieved
even though this quarter saw limited sales on the Driver Vision
Enhancer program which provided sales of over $4 million during
last year's third quarter. Growth in the core business came in
satellite controls where commercial demand was higher. Sales
increased on the Delta IV and Taurus II launch vehicles, on the TOW
missile and on the Joint Air to Ground missile. Sales on gun
stabilization programs in Europe and on the G/ATOR ground-based
mobile radar drove sales in Defense Controls. The recent
acquisition of Videolarm resulted in a small increase in the
Homeland Security product line. The Industrial segment felt the
brunt of the global recession. The quarter included the benefit of
$19 million in sales from two recent wind energy acquisitions but
total sales of $102 million were still down 28% from a year ago. As
expected, sales were down in every major product line. Controls for
plastics making machinery and metal forming equipment generated
sales at a third of last year's level. Machinery customers are not
buying and machine makers are shutting down for the summer and
furloughing their employees. Sales of motion bases for simulators
were about half of last year's level. The best performing product
line was power generation where sales were down only 5%. The good
news was in the wind energy acquisitions. Sales of wind turbine
pitch controls and turbine blade health monitoring equipment were
very strong in the quarter. Sales in the Components Group were up
4% to $90 million. Sales of aerospace products increased by 23%,
offsetting a similar percentage decline in medical and industrial
products. The biggest sales increase was in military aircraft
driven by the Northrop Grumman Guardian program. This is a system
designed to protect military and commercial aircraft from
shoulder-fired missiles. Other major defense programs are
electro-optics and turret controls on the Abrams tank and the
Bradley fighting vehicle. Medical sales were down 20% as customers
attempted to reduce inventory levels. Industrial sales in the
Components Group were weak in the quarter but incoming orders
suggest a rebound is possible. The Medical Devices segment had the
benefit of $7.5 million in sales from the recent acquisitions of
Ethox and Aitecs. Nevertheless, total sales of $26 million were
down 6% from a year ago. Sales of infusion pumps were down 42% from
a year ago as hospitals and outpatient clinics have put a hold on
their capital equipment purchases. Sales of administration sets
were down 5% reflecting a decline in procedures performed. In spite
of the weakness in industrial and medical markets, the Company's
recent acquisitions have driven the backlog to $990 million, up 13%
from a year ago. The Company revised its guidance for the year
ending September 2009. Sales are now forecast at $1.825 billion,
with net earnings of $86.8 million and earnings per share of $2.02.
The Company suggests that its earnings forecast should be
considered in a range of +/- $.05. The Company is also providing
guidance for fiscal 2010. Sales are projected to rebound to $2.037
billion and net earnings should improve to $101 million with
earnings per share of $2.36, a 17% increase. The Company suggests a
range of +/- $.10 per share on that estimate. 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 http://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, 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
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, (xxv) 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, (xxvi) the inability to utilize
amounts available to us under our credit facilities given
uncertainties in the credit markets and (xxvii) 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 Nine Months
Ended June 27, June 28, June 27, June 28, 2009 2008 2009 2008 ----
---- ---- ---- Net sales $445,160 $496,575 $1,344,583 $1,411,820
Cost of sales 319,410 338,084 945,213 956,064 ------- -------
------- ------- Gross profit 125,750 158,491 399,370 455,756
------- ------- ------- ------- Research and development 22,805
30,518 72,127 80,686 Selling, general and administrative 70,545
75,413 208,550 219,634 Restructuring expense 9,946 - 9,946 -
Interest 9,471 9,121 28,494 28,056 Equity in earnings of LTi and
other (3,409) (729) (9,014) (1,746) ------ ---- ------ ------
109,358 114,323 310,103 326,630 ------- ------- ------- -------
Earnings before income taxes 16,392 44,168 89,267 129,126 Income
taxes 496 13,057 19,409 41,712 --- ------ ------ ------ Net
earnings $15,896 $31,111 $69,858 $87,414 ======= ======= =======
======= Net earnings per share Basic $0.37 $0.73 $1.64 $2.05 =====
===== ===== ===== Diluted $0.37 $0.72 $1.63 $2.02 ===== ===== =====
===== Average common shares outstanding Basic 42,571,843 42,646,335
42,571,608 42,577,639 ========== ========== ========== ==========
Diluted 42,837,237 43,248,903 42,882,372 43,249,953 ==========
========== ========== ========== Moog Inc. CONSOLIDATED SALES AND
OPERATING PROFIT (dollars in thousands) Three Months Ended Nine
Months Ended June 27, June 28, June 27, June 28, 2009 2008 2009
2008 ---- ---- ---- ---- Net Sales Aircraft Controls $161,553
$175,384 $486,726 $496,581 Space and Defense Controls 64,753 63,456
204,455 190,889 Industrial Systems 102,452 142,854 316,999 395,763
Components 90,413 87,276 256,421 251,104 Medical Devices 25,989
27,605 79,982 77,483 ------ ------ ------ ------ Net sales $445,160
$496,575 $1,344,583 $1,411,820 ======== ======== ==========
========== Operating Profit and Margins Aircraft Controls $12,988
$12,187 $41,007 $41,530 8.0% 6.9% 8.4% 8.4% Space and Defense
Controls 7,110 7,455 30,496 23,298 11.0% 11.7% 14.9% 12.2%
Industrial Systems 812 20,582 23,171 56,759 0.8% 14.4% 7.3% 14.3%
Components 14,689 15,151 44,739 44,571 16.2% 17.4% 17.4% 17.8%
Medical Devices (4,360) 2,978 (6,661) 6,914 (16.8%) 10.8% (8.3%)
8.9% ------ ----- ----- ---- Total operating profit 31,239 58,353
132,752 173,072 7.0% 11.8% 9.9% 12.3% Deductions from Operating
Profit Interest expense 9,471 9,121 28,494 28,056 Equity-based
compensation expense 1,031 1,384 4,651 3,694 Corporate expenses and
other 4,345 3,680 10,340 12,196 ----- ----- ------ ------ Earnings
before Income Taxes $16,392 $44,168 $89,267 $129,126 =======
======= ======= ======== Moog Inc. CONSOLIDATED BALANCE SHEETS
(dollars in thousands) June 27, September 27, 2009 2008 ---- ----
Cash $77,014 $86,814 Receivables 523,975 517,361 Inventories
475,499 408,295 Other current assets 90,403 77,915 ------ ------
Total current assets 1,166,891 1,090,385 Property, plant and
equipment 454,384 428,120 Goodwill and intangible assets 839,248
635,490 Other non-current assets 42,750 73,252 ------ ------ Total
assets $2,503,273 $2,227,247 ========== ========== Notes payable
$28,497 $7,579 Current installments of long-term debt 10,170 1,487
Contract loss reserves 18,815 20,536 Other current liabilities
361,598 347,491 ------- ------- Total current liabilities 419,080
377,093 Long-term debt 792,581 661,994 Other long-term liabilities
235,173 193,750 ------- ------- Total liabilities 1,446,834
1,232,837 Shareholders' equity 1,056,439 994,410 --------- -------
Total liabilities and shareholders' equity $2,503,273 $2,227,247
========== ========== DATASOURCE: Moog Inc. CONTACT: Ann Marie
Luhr, +1-716-687-4225 Web Site: http://www.moog.com/
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