Moog Reports Increased Sales and Earnings per Share

EAST AURORA, NY--(Marketwired - Apr 25, 2014) - Moog Inc. (NYSE: MOG.A) (NYSE: MOG.B) today announced second quarter net earnings of $38 million and earnings per share of $.82, a 3% increase over last year. Total sales of $650 million were up 1% from a year ago.

Total Aircraft Controls sales in the quarter were $275 million, up 6%. The Company's commercial OEM sales were $99 million, 17% higher, including $58 million in sales to Boeing and $17 million in Airbus sales. Commercial aftermarket sales of $35 million were up 19% on initial provisioning spares for the 787 program.

Military aircraft sales were down 3% to $141 million. F-35 Joint Strike Fighter production revenues were higher but offset by lower revenues for other fighter and helicopter programs including Light Combat Aircraft, Black Hawk and the V-22 tilt rotor aircraft. Military aftermarket sales were down 4% to $59 million.

Space and Defense segment sales, at $95 million, were 10% lower than a year ago. Products sold for satellite and launch vehicles were $52 million, down 16%. Defense sector sales for ground vehicles were lower but were offset by stronger sales of security products, which increased 10%.

The Company's Industrial Systems segment had sales of $151 million, an increase of $7 million, or 5%. Sales of controls for industrial automation applications were $9 million higher, at $80 million. Sales of energy controls totaled $39 million and included a $3 million increase in sales of wind energy pitch controls. Simulation and test products, including motion bases for flight training simulators, were down $4 million as major simulation customers adjusted their inventories.

Sales for the Components Group of $101 million were $2 million higher than last year's second quarter. Sales of industrial products were stronger due to the Aspen Motion Control acquisition completed a year ago. Aerospace and defense sales were down 11% while medical and energy sales were unchanged.

The Medical Devices segment had sales of $27 million, down $8 million year over year, the result of the June 2013 Ethox Buffalo sale as well as recent inventory adjustments for pumps and sets at a distribution partner.

The Company's twelve month backlog is $1.4 billion.

The Company also updated its projections for 2014 to include sales for the year at $2.64 billion, net earnings of $169 million and earnings per share of $3.65.

"This was a good news quarter with earnings coming in ahead of plan and healthy cash flow," said John Scannell, Chairman and CEO. "We are anticipating margins will improve in the second half on slightly higher sales and an improving mix."

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								Six Months Ended
			March 29, 2014				March 30, 2013				March 29, 2014			March 30, 2013
NET SALES			$	649,878			$	643,023			$	1,293,263		$	1,263,826
COST OF SALES				453,060				445,600				897,136			873,703
GROSS PROFIT				196,818				197,423				396,127			390,123
	Research and development			37,225				38,113				72,980			70,441
	Selling, general and administrative			104,832				100,795				204,733			205,870
	Interest			2,444				6,442				7,573			15,038
	Restructuring			--				2,201				--			2,201
	Other			(1,294	)			(88	)			10,373			(2,458	)
EARNINGS BEFORE INCOME TAXES				53,611				49,960				100,468			99,031
INCOME TAXES				15,886				13,433				30,646			28,386
NET EARNINGS			$	37,725			$	36,527			$	69,822		$	70,645
NET EARNINGS PER SHARE
	Basic		$	0.83			$	0.81			$	1.54		$	1.56
	Diluted		$	0.82			$	0.80			$	1.52		$	1.54
AVERAGE COMMON SHARES OUTSTANDING
	Basic			45,377,465				45,333,612				45,381,058			45,343,312
	Diluted			45,945,398				45,825,626				45,977,716			45,766,798

Moog Inc.
CONSOLIDATED SALES AND OPERATING PROFIT
(dollars in thousands)
			Three Months Ended								Six Months Ended
			March 29, 2014				March 30, 2013				March 29, 2014				March 30, 2013
Net sales:
	Aircraft Controls		$	274,810			$	258,860			$	540,226			$	511,141
	Space and Defense Controls			95,305				105,688				194,755				192,153
	Industrial Systems			151,198				144,201				295,277				292,177
	Components			101,160				98,804				203,845				198,079
	Medical Devices			27,405				35,470				59,160				70,276
Net sales			$	649,878			$	643,023			$	1,293,263			$	1,263,826
Operating profit and margins:
	Aircraft Controls		$	25,867			$	31,518			$	57,638			$	62,593
				9.4	%			12.2	%			10.7	%			12.2	%
	Space and Defense Controls			9,006				7,671				16,859				15,899
				9.4	%			7.3	%			8.7	%			8.3	%
	Industrial Systems			14,899				7,837				27,185				16,884
				9.9	%			5.4	%			9.2	%			5.8	%
	Components			13,546				15,342				29,735				34,188
				13.4	%			15.5	%			14.6	%			17.3	%
	Medical Devices			1,377				1,306				5,005				2,908
				5.0	%			3.7	%			8.5	%			4.1	%
Total operating profit				64,695				63,674				136,422				132,472
				10.0	%			9.9	%			10.5	%			10.5	%
Deductions from operating profit:
	Interest expense			2,444				6,442				7,573				15,038
	Equity-based compensation expense			1,218				833				4,992				4,724
	Corporate expenses and other			7,422				6,439				23,389				13,679
Earnings before income taxes			$	53,611			$	49,960			$	100,468			$	99,031

Moog Inc.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
				March 29, 2014			September 28, 2013
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	195,644		$	157,090
	Receivables				793,349			811,376
	Inventories				553,871			551,674
	Other current assets				130,007			127,235
		TOTAL CURRENT ASSETS			1,672,871			1,647,375
PROPERTY, PLANT AND EQUIPMENT					560,367			562,363
GOODWILL					766,811			766,924
INTANGIBLE ASSETS					195,653			208,756
OTHER ASSETS					53,203			51,677
TOTAL ASSETS				$	3,248,905		$	3,237,095
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
	Short-term borrowings			$	109,609		$	105,088
	Current installments of long-term debt				5,362			3,382
	Accounts payable				169,913			181,893
	Customer advances				137,186			145,854
	Contract loss reserves				34,528			44,228
	Other accrued liabilities				248,408			242,785
		TOTAL CURRENT LIABILITIES			705,006			723,230
LONG-TERM DEBT					591,030			600,687
OTHER LONG-TERM LIABILITIES					359,653			377,413
		TOTAL LIABILITIES			1,655,689			1,701,330
SHAREHOLDERS' EQUITY					1,593,216			1,535,765
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY				$	3,248,905		$	3,237,095