Moog's Third Quarter Sales and EPS Higher

Moog's Third Quarter Sales and EPS Higher  EAST AURORA, NY -- (Marketwired) -- 07/25/14 --  Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) announced today third quarter earnings of $48 million, or $1.08 a share, an increase of 44% over last year's $.75 per share. Sales in the quarter of $684 million were up 2% from last year's $671 million.   Aircraft sales in the quarter of $294 million were up 8% from a year ago. Commercial aircraft sales of $147 million were up $30 million, or 25%. Sales of OEM products to Boeing were 39% higher, at $70 million, while Airbus sales were up 21%. Commercial aftermarket revenue, at $34 million, was 20% higher in the quarter due to strong initial provisioning of 787 spares.   Military aircraft sales of $148 million were down 5% year over year. F-35 sales of $23 million were down $6 million, the result of a decrease in development program support. OEM sales for helicopters were down $7 million, as delivery rates moderated from a year ago. Foreign military sales were higher, offsetting some of the weakness in domestic military OEM sales. Military aftermarket sales were up 7% on increases in repair contracts on various programs, including the F-35 and V-22.   Space and Defense sales of $103 million were 2% higher in the quarter. Space market sales were higher, at $61 million, on improved sales of components for satellites, launch vehicles and the NASA Soft Capture System. Defense sales were $42 million, down $6 million. A year ago this segment benefited from the LAV-25 turret upgrade program.   Sales in the Industrial Systems segment were flat at $148 million. Within the energy market, slower sales of steam and gas turbine products were offset by higher wind energy sales as a new AC pitch control system was introduced in Brazil. Industrial automation sales were up 9%, at $80 million, on small increases in each of the underlying product lines. Sales of simulation and test products were down $6 million, or 16%, due to inventory adjustments at some OEM customers.  The Components segment had sales in the quarter of $111 million, down 2% from last year. Sales into aerospace and defense markets were slightly lower on weaker military aircraft OEM sales and slower spares activity. Non-aerospace and defense sales, including products sold into marine energy markets, were up $2 million, to $64 million.   The Medical Devices segment had sales of $29 million, down $9 million. A year ago, the Ethox Buffalo operation was sold, accounting for a third of the sales decrease. Lower pump and administration set sales accounted for the other $6 million decline.  The current backlog of $1.38 billion is up 6% from the same quarter a year ago.   The Company updated its guidance for fiscal 2014 to include sales of $2.65 billion, net earnings of $165 million and earnings per share of $3.65, compared to $2.63 in fiscal 2013.   The Company also provided its initial projections for fiscal 2015 with sales of $2.69 billion, net earnings of $181 million and earnings per share of $4.25, a 16% increase over fiscal 2014 guidance.  "This was a very good quarter for our company with increased sales, record earnings and very strong cash flow," said John Scannell, Chairman and CEO. "We are on track for fiscal '14, which will be a great year for Moog. As we look to fiscal '15, we should see further improvement. We're forecasting very modest sales growth but a 16% increase in earnings per share. Company operating margins in fiscal '15 will expand by 50 basis points, despite some margin challenges in our Aircraft segment. We also expect another year of strong cash flow. Overall, if fiscal '15 turns out as we expect, it will be another record year for the company."   In conjunction with today's release, Moog will host a conference call beginning at 10:00 a.m. ET, which will be broadcast live over the Internet. John Scannell, Chairman and CEO, and Don Fishback, CFO, will host the call. Supplemental financial data will be available on the webcast web page approximately 60 minutes prior to the conference call. Listeners can access the call live or in replay mode at www.moog.com/investors/communications.   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 in this report 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 expected results described in the forward-looking statements. These important factors, risks and uncertainties include:       --  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 operate in highly competitive markets with competitors who may have     greater resources than we possess; --  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; --  we make estimates in accounting for long-term 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; --  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; --  contracting on government programs is subject to significant     regulation, including rules related to bidding, billing and accounting     kickbacks and false claims, and any non-compliance could subject us to     fines and penalties or possible debarment; --  the loss of Boeing as a customer or a significant reduction in sales     to Boeing could adversely impact our operating results; --  our new product research and development efforts may not be successful     which could reduce our sales and earnings; --  our inability to adequately enforce and protect our intellectual     property or defend against assertions of infringement could prevent or     restrict our ability to compete; --  our business operations may be adversely affected by information     systems interruptions, intrusions or new software implementations; --  our indebtedness and restrictive covenants under our credit facilities     could limit our operational and financial flexibility; --  significant changes in discount rates, rates of return on pension     assets, mortality tables and other factors could 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; --  our sales and earnings may be affected if we cannot identify, acquire     or integrate strategic acquisitions, or if we engage in divesting     activities; --  our operations in foreign countries expose us to political and     currency risks and adverse changes in local legal and regulatory     environments; --  unforeseen exposure to additional income tax liabilities may affect     our operating results; --  government regulations could limit our ability to sell our products     outside the United States and could otherwise adversely affect our     business; --  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; --  future terror attacks, war, natural disasters or other catastrophic     events beyond our control could negatively impact our business; and --  our operations are subject to environmental laws, and complying with     those laws may cause us to incur significant costs.     These factors 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 28,    June 29,    June 28,    June 29,                                   2014        2013        2014        2013                                 ----------- ----------- ----------- ----------- NET SALES                    $   683,698 $   670,632 $ 1,976,961 $ 1,934,458 COST OF SALES                    481,431     472,363   1,378,567   1,346,066                              ----------- ----------- ----------- ----------- GROSS PROFIT                     202,267     198,269     598,394     588,392   Research and development        32,498      33,109     105,478     103,550   Selling, general and                                                          administrative                102,616      96,550     307,349     302,420   Interest                         2,215       6,084       9,788      21,122   Restructuring                        -       4,795           -       6,996   Other                              283      10,105      10,656       7,647                              ----------- ----------- ----------- ----------- EARNINGS BEFORE INCOME TAXES      64,655      47,626     165,123     146,657 INCOME TAXES                      16,533      13,399      47,179      41,785                              ----------- ----------- ----------- ----------- NET EARNINGS                 $    48,122 $    34,227 $   117,944 $   104,872                              =========== =========== =========== ===========                                                                                                                                                           NET EARNINGS PER SHARE                                                         Basic                      $      1.09 $      0.76 $      2.62 $      2.31   Diluted                    $      1.08 $      0.75 $      2.59 $      2.29                              =========== =========== =========== ===========                                                                                                                                                           AVERAGE COMMON SHARES                                                         OUTSTANDING                                                                   Basic                       44,077,121  45,316,429  44,946,413  45,334,657   Diluted                     44,669,248  45,836,565  45,541,561  45,790,359                              =========== =========== =========== ===========                                                                                                                                                                                                                                                                         Moog Inc.                                                     CONSOLIDATED SALES AND OPERATING PROFIT                                               (dollars in thousands)                                                                                                                                       Three Months Ended        Nine Months Ended                                ----------------------   ----------------------                               June 28,    June 29,     June 28,    June 29,                                  2014        2013         2014        2013                                 ----------  ----------   ----------  ----------  Net sales:                                                                     Aircraft Controls         $  294,194  $  272,855   $  834,420  $  783,996    Space and Defense                                                             Controls                    102,505     100,071      297,260     292,224    Industrial Systems           147,722     147,161      442,998     439,338    Components                   110,587     112,546      314,433     310,625    Medical Devices               28,690      37,999       87,850     108,275                              ----------  ----------   ----------  ----------  Net sales                   $  683,698  $  670,632   $1,976,961  $1,934,458                              ==========  ==========   ==========  ==========  Operating profit (loss) and                                                   margins:                                                                      Aircraft Controls         $   30,342  $   31,054   $   87,980  $   93,647                                    10.3%       11.4%        10.5%       11.9%   Space and Defense                                                             Controls                      8,664       6,711       25,523      22,610                                     8.5%        6.7%         8.6%        7.7%   Industrial Systems            16,826       9,273       44,010      26,157                                    11.4%        6.3%         9.9%        6.0%   Components                    16,972      18,360       46,707      52,548                                    15.3%       16.3%        14.9%       16.9%   Medical Devices                2,343      (2,775)       7,348         133                                     8.2%       (7.3%)        8.4%        0.1%                             ----------  ----------   ----------  ----------  Total operating profit          75,147      62,623      211,568     195,095                                    11.0%        9.3%        10.7%       10.1% Deductions from operating                                                     profit:                                                                       Interest expense               2,215       6,084        9,788      21,122    Equity-based compensation                                                     expense                       1,553         949        6,545       5,673    Corporate expenses and                                                        other                         6,724       7,964       30,112      21,643                              ----------  ----------   ----------  ----------  Earnings before income                                                        taxes                      $   64,655  $   47,626   $  165,123  $  146,657                              ==========  ==========   ==========  ==========                                                                                                                                                                                                                                                                              Moog Inc.                                                           CONSOLIDATED BALANCE SHEETS                                                    (dollars in thousands)                                                                                                                                                             June 28,   September 28,                                                       2014          2013                                                      ------------- ------------- ASSETS                                                                       CURRENT ASSETS                                                                 Cash and cash equivalents                      $     216,185 $     157,090   Receivables                                          781,858       811,376   Inventories                                          547,256       551,674   Other current assets                                 133,083       127,235                                                  ------------- -------------     TOTAL CURRENT ASSETS                             1,678,382     1,647,375 PROPERTY, PLANT AND EQUIPMENT                          565,300       562,363 GOODWILL                                               769,653       766,924 INTANGIBLE, net                                        190,534       208,756 OTHER ASSETS                                            50,923        51,677                                                  ------------- ------------- TOTAL ASSETS                                     $   3,254,792 $   3,237,095                                                  ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY                                         CURRENT LIABILITIES                                                            Short-term borrowings                          $     103,942 $     105,088   Current installments of long-term debt                 5,239         3,382   Accounts payable                                     164,519       181,893   Customer advances                                    134,913       145,854   Contract loss reserves                                36,262        44,228   Other accrued liabilities                            262,155       242,785                                                  ------------- -------------     TOTAL CURRENT LIABILITIES                          707,030       723,230 LONG-TERM DEBT, excluding current installments                                 Senior debt                                          670,027       409,125   Senior subordinated notes                                  -       191,562 LONG-TERM PENSION AND RETIREMENT OBLIGATIONS           240,924       269,751 DEFERRED INCOME TAXES                                  105,587       104,377 OTHER LONG-TERM LIABILITIES                                849         3,285                                                  ------------- -------------     TOTAL LIABILITIES                                1,724,417     1,701,330                                                  ------------- ------------- COMMITMENTS AND CONTINGENCIES                                -             - SHAREHOLDERS' EQUITY                                                           Common stock                                          51,280        51,280   Other shareholders' equity                         1,479,095     1,484,485                                                  ============= =============     TOTAL SHAREHOLDERS' EQUITY                       1,530,375     1,535,765                                                  ============= ============= TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY       $   3,254,792 $   3,237,095                                                  ============= =============     contact  Ann Marie Luhr 716-687-4225     
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