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Moog’s Third Quarter EPS Increased 22%

2008-07-25 06:50:00

Moog’s Third Quarter EPS Increased 22%

    EAST AURORA, N.Y., July 25 /EMWNews/ -- Moog Inc. (NYSE:

MOG.A and MOG.B) announced today third quarter earnings of $31.1 million,

or $.72 per share, an increase of 22% over $.59 per share a year ago. On a

year-to-date basis, Moog's earnings per share were $2.02, up 17% from $1.72

in the year previous.

    Sales for the quarter of $497 million were up 23% from $404 million

last year. Sales year-to-date of $1.412 billion were also up 23%.

    Aircraft sales in the quarter of $175 million were up 17%. The increase

was all in military aircraft. Sales were up on the F-35 Joint Strike

Fighter and the V-22 Tilt Rotor. Military aftermarket sales at $33 million

were up 32% from a year ago.

    Commercial aircraft sales in the quarter were almost the same as a year

ago. Increased sales on business jets offset reduced sales on the Boeing

7-series including the 787 and a 6% reduction in aftermarket revenue.

    Space and Defense sales of $63 million were up 33%. Growth in the core

business came in the Constellation program. Constellation will develop the

systems to replace the Space Shuttle. The recent QuickSet acquisition

provided strong sales in Homeland Security and in Driver Vision Enhancer

systems for MRAP vehicles. The acquisition of CSA Engineering added $2.4

million in sales in the quarter.

    Industrial Segment sales were very strong at $143 million, an increase

of 28% from a year ago. Sales were up in almost every major product line

with the biggest increase in the motion simulator business. Sales of

electric motion bases to CAE and Flight Safety generated a 92% increase to

a total of $21 million. Sales were also up in power generation,

metal-forming equipment, gauge controls for steel mills, and plastic-making


    Sales in the Components Segment of $87 million were up 20% from a year

ago. A major part of the increase was equipment supplied to Northrop

Grumman for the Guardian system, a system designed to protect military and

commercial aircraft from shoulder-fired missiles. The biggest percentage

increase in this segment was in the marine market. Sales of $12 million

were up 28%. The Company's products are used by a broad range of customers

involved in offshore oil exploration and production.

    The Company's Medical Devices segment had sales of $28 million, up 27%

from a year ago. Most of the increase was in sales of administration sets

that are used in conjunction with the installed base of intravenous and

enteral pumps.

    The current backlog of $898 million was up 23% from the same quarter a

year ago.

    The Company revised its guidance for the year ending September '08.

Sales are now forecast at $1.887 billion with net earnings of $119 million

and earnings per share of $2.75.

    The Company also provided its initial projection for fiscal '09. Sales

are forecasted in the range of $2.095 billion to $2.125 billion, net

earnings in the range of $134 million to $140 million and earnings per

share between $3.08 and $3.20. Growth in EPS would, therefore, range

between 12% and 16%.

    "Our Company is experiencing remarkable sales growth in every segment",

said R. T. Brady, Chairman and CEO. "A very strong earnings performance in

our Industrial Systems and Components Segments are providing continued

earnings growth while our Aircraft Group is investing heavily in the

development of new airplane programs. Once again, the diversity and balance

in our product portfolio is the key to consistent growth in earnings per


    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, marine and

medical equipment. Additional information about the company can be found at

    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 and Lockheed Martin, 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 significant 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 and (xxiv) the

cost of compliance with environmental laws. 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 28, June 30, June 28, June 30, 2008 2007 2008 2007 Net sales $496,575 $403,789 $1,411,820 $1,144,684 Cost of sales 338,084 261,922 956,064 753,646 Gross profit 158,491 141,867 455,756 391,038 Research and development 30,518 28,299 80,686 76,192 Selling, general and administrative 75,413 68,566 219,634 186,061 Interest 9,121 8,348 28,056 20,415 Other (729) 909 (1,746) 985 114,323 106,122 326,630 283,653 Earnings before income taxes 44,168 35,745 129,126 107,385 Income taxes 13,057 10,169 41,712 33,258 Net earnings $31,111 $ 25,576 $87,414 $74,127 Net earnings per share Basic $ .73 $.60 $2.05 $1.75 Diluted $ .72 $.59 $2.02 $1.72 Average common shares outstanding Basic 42,646,335 42,476,094 42,577,639 42,405,088 Diluted 43,248,903 43,225,110 43,249,953 43,114,907 MOOG INC. CONSOLIDATED SALES AND OPERATING PROFIT (dollars in thousands) Three Months Ended Nine Months Ended June 28, June 30, June 28, June 30, 2008 2007 2008 2007 Net Sales Aircraft Controls $175,384 $149,801 $496,581 $426,294 Space and Defense Controls 63,456 47,835 190,889 138,700 Industrial Systems 142,854 111,694 395,763 324,757 Components 87,276 72,764 251,104 210,514 Medical Devices 27,605 21,695 77,483 44,419 Net sales $496,575 $403,789 $1,411,820 $1,144,684 Operating Profit and Margins Aircraft Controls $12,187 $15,825 $41,530 $43,705 6.9% 10.6% 8.4% 10.3% Space and Defense Controls 7,455 6,163 23,298 18,663 11.7% 12.9% 12.2% 13.5% Industrial Systems 20,582 15,395 56,759 43,673 14.4% 13.8% 14.3% 13.4% Components 15,151 10,877 44,571 33,831 17.4% 14.9% 17.8% 16.1% Medical Devices 2,978 829 6,914 4,112 10.8% 3.8% 8.9% 9.3% Total operating profit 58,353 49,089 173,072 143,984 11.8% 12.2% 12.3% 12.6% Deductions from Operating Profit Interest expense 9,121 8,348 28,056 20,415 Equity-based compensation expense 1,384 530 3,694 2,730 Corporate expenses and other 3,680 4,466 12,196 13,454 Earnings before Income Taxes $44,168 $35,745 $129,126 $107,385 MOOG INC. CONSOLIDATED BALANCE SHEETS (dollars in thousands) June 28, September 29, 2008 2007 Cash $ 85,092 $83,856 Receivables 523,767 431,978 Inventories 415,963 359,250 Other current assets 72,733 61,767 Total current assets 1,097,555 936,851 Property, plant and equipment 426,014 386,813 Goodwill and intangible assets 645,633 620,349 Other non-current assets 69,584 62,166 Total assets $2,238,786 $2,006,179 Notes payable $4,683 $3,354 Current installments of long-term debt 1,967 2,537 Contract loss reserves 16,844 12,362 Other current liabilities 357,926 301,975 Total current liabilities 381,420 320,228 Long-term debt 682,348 611,633 Other long-term liabilities 212,205 197,106 Total liabilities 1,275,973 1,128,967 Shareholders' equity 962,813 877,212 Total liabilities and shareholders' equity $2,238,786 $2,006,179

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