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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Moog Inc | NYSE:MOG.B | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 155.07 | 164.67 | 160.13 | 160.13 | 94 | 22:00:00 |
New York State
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16-0757636
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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East Aurora, New York
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14052-0018
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(Address of principal executive offices)
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(Zip Code)
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(716) 652-2000
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(Telephone number including area code)
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Three Months Ended
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||||||
(dollars in thousands, except per share data)
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December 31,
2016 |
|
January 2,
2016 |
||||
Net sales
|
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$
|
589,670
|
|
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$
|
568,457
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Cost of sales
|
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417,164
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406,997
|
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Gross profit
|
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172,506
|
|
|
161,460
|
|
||
Research and development
|
|
34,564
|
|
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34,798
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Selling, general and administrative
|
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85,063
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82,994
|
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Interest
|
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8,486
|
|
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8,322
|
|
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Other
|
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7,905
|
|
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(309
|
)
|
||
Earnings before income taxes
|
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36,488
|
|
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35,655
|
|
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Income taxes
|
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6,430
|
|
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9,495
|
|
||
Net earnings attributable to Moog and noncontrolling interest
|
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30,058
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26,160
|
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||
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Net earnings (loss) attributable to noncontrolling interest
|
|
(506
|
)
|
|
(81
|
)
|
||
|
|
|
|
|
||||
Net earnings attributable to Moog
|
|
$
|
30,564
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|
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$
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26,241
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|
||||
Net earnings per share attributable to Moog
|
|
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|
||||
Basic
|
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$
|
0.85
|
|
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$
|
0.71
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Diluted
|
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$
|
0.84
|
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|
$
|
0.71
|
|
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|
||||
Average common shares outstanding
|
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|
|
|
||||
Basic
|
|
35,869,052
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36,713,949
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Diluted
|
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36,272,767
|
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37,028,331
|
|
||
See accompanying Notes to Consolidated Condensed Financial Statements.
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Three Months Ended
|
||||||
(dollars in thousands)
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
Net earnings attributable to Moog and noncontrolling interest
|
|
$
|
30,058
|
|
|
$
|
26,160
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
||||
Foreign currency translation adjustment
|
|
(41,509
|
)
|
|
(23,199
|
)
|
||
Retirement liability adjustment
|
|
8,572
|
|
|
5,332
|
|
||
Change in accumulated income (loss) on derivatives
|
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574
|
|
|
438
|
|
||
Other comprehensive income (loss), net of tax
|
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(32,363
|
)
|
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(17,429
|
)
|
||
Comprehensive income (loss)
|
|
(2,305
|
)
|
|
8,731
|
|
||
Comprehensive income (loss) attributable to noncontrolling interest
|
|
(506
|
)
|
|
(81
|
)
|
||
Comprehensive income (loss) attributable to Moog
|
|
$
|
(1,799
|
)
|
|
$
|
8,812
|
|
See accompanying Notes to Consolidated Condensed Financial Statements.
|
(dollars in thousands)
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
ASSETS
|
|
|
|
|
||||
Current assets
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
331,664
|
|
|
$
|
325,128
|
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Receivables
|
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677,841
|
|
|
688,388
|
|
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Inventories
|
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464,402
|
|
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479,040
|
|
||
Prepaid expenses and other current assets
|
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39,659
|
|
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34,688
|
|
||
Total current assets
|
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1,513,566
|
|
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1,527,244
|
|
||
Property, plant and equipment, net of accumulated depreciation of $726,615 and $725,809, respectively
|
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508,656
|
|
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522,369
|
|
||
Goodwill
|
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730,271
|
|
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740,162
|
|
||
Intangible assets, net
|
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104,940
|
|
|
113,560
|
|
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Deferred income taxes
|
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69,039
|
|
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75,800
|
|
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Other assets
|
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26,707
|
|
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25,839
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||
Total assets
|
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$
|
2,953,179
|
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$
|
3,004,974
|
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LIABILITIES AND SHAREHOLDERS’ EQUITY
|
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|
||||
Current liabilities
|
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|
||||
Short-term borrowings
|
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$
|
1,366
|
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$
|
1,379
|
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Current installments of long-term debt
|
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144
|
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167
|
|
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Accounts payable
|
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148,253
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144,450
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|
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Accrued salaries, wages and commissions
|
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115,081
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126,319
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|
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Customer advances
|
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171,530
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167,514
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Contract loss reserves
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30,045
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32,543
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Other accrued liabilities
|
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99,843
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116,577
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Total current liabilities
|
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566,262
|
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588,949
|
|
||
Long-term debt, excluding current installments
|
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1,000,338
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1,004,847
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Long-term pension and retirement obligations
|
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385,962
|
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401,747
|
|
||
Deferred income taxes
|
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10,157
|
|
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11,026
|
|
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Other long-term liabilities
|
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4,454
|
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4,343
|
|
||
Total liabilities
|
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1,967,173
|
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2,010,912
|
|
||
Commitments and contingencies (Note 17)
|
|
—
|
|
|
—
|
|
||
Redeemable noncontrolling interest
|
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5,145
|
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|
5,651
|
|
||
Shareholders’ equity
|
|
|
|
|
||||
Common stock - Class A
|
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43,688
|
|
|
43,667
|
|
||
Common stock - Class B
|
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7,592
|
|
|
7,613
|
|
||
Additional paid-in capital
|
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469,971
|
|
|
465,762
|
|
||
Retained earnings
|
|
1,737,103
|
|
|
1,706,539
|
|
||
Treasury shares
|
|
(740,838
|
)
|
|
(741,700
|
)
|
||
Stock Employee Compensation Trust
|
|
(59,307
|
)
|
|
(49,463
|
)
|
||
Supplemental Retirement Plan Trust
|
|
(9,924
|
)
|
|
(8,946
|
)
|
||
Accumulated other comprehensive loss
|
|
(467,424
|
)
|
|
(435,061
|
)
|
||
Total Moog shareholders’ equity
|
|
980,861
|
|
|
988,411
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
2,953,179
|
|
|
$
|
3,004,974
|
|
See accompanying Notes to Consolidated Condensed Financial Statements.
|
|
|
|
|
|
|
|
|
Number of Shares
|
||||||
(dollars in thousands, except per share data)
|
|
Amount
|
|
Class A Common Stock
|
|
Class B Common Stock
|
||||
COMMON STOCK
|
|
|
|
|
|
|
||||
Beginning of period
|
|
$
|
51,280
|
|
|
43,666,801
|
|
|
7,612,912
|
|
Conversion of Class B to Class A
|
|
—
|
|
|
20,917
|
|
|
(20,917
|
)
|
|
End of period
|
|
51,280
|
|
|
43,687,718
|
|
|
7,591,995
|
|
|
ADDITIONAL PAID-IN CAPITAL
|
|
|
|
|
|
|
||||
Beginning of period
|
|
465,762
|
|
|
|
|
|
|||
Issuance of treasury shares
|
|
(3,941
|
)
|
|
|
|
|
|||
Equity-based compensation expense
|
|
2,168
|
|
|
|
|
|
|||
Adjustment to market - SECT, SERP and other
|
|
5,982
|
|
|
|
|
|
|||
End of period
|
|
469,971
|
|
|
|
|
|
|||
RETAINED EARNINGS
|
|
|
|
|
|
|
||||
Beginning of period
|
|
1,706,539
|
|
|
|
|
|
|||
Net earnings attributable to Moog
|
|
30,564
|
|
|
|
|
|
|||
End of period
|
|
1,737,103
|
|
|
|
|
|
|||
TREASURY SHARES AT COST
|
|
|
|
|
|
|
||||
Beginning of period
|
|
(741,700
|
)
|
|
(11,110,087
|
)
|
|
(3,323,926
|
)
|
|
Class A and B shares issued related to equity awards
|
|
6,076
|
|
|
146,784
|
|
|
6,696
|
|
|
Class A and B shares purchased
|
|
(5,214
|
)
|
|
(62,638
|
)
|
|
(15,412
|
)
|
|
End of period
|
|
(740,838
|
)
|
|
(11,025,941
|
)
|
|
(3,332,642
|
)
|
|
STOCK EMPLOYEE COMPENSATION TRUST (SECT)
|
|
|
|
|
|
|
||||
Beginning of period
|
|
(49,463
|
)
|
|
(425,148
|
)
|
|
(404,919
|
)
|
|
Issuance of shares
|
|
867
|
|
|
—
|
|
|
15,000
|
|
|
Purchase of shares
|
|
(5,709
|
)
|
|
—
|
|
|
(84,441
|
)
|
|
Adjustment to market
|
|
(5,002
|
)
|
|
—
|
|
|
—
|
|
|
End of period
|
|
(59,307
|
)
|
|
(425,148
|
)
|
|
(474,360
|
)
|
|
SUPPLEMENTAL RETIREMENT PLAN (SERP) TRUST
|
|
|
|
|
|
|
||||
Beginning of period
|
|
(8,946
|
)
|
|
|
|
(150,000
|
)
|
||
Adjustment to market
|
|
(978
|
)
|
|
|
|
—
|
|
||
End of period
|
|
(9,924
|
)
|
|
|
|
(150,000
|
)
|
||
ACCUMULATED OTHER COMPREHENSIVE LOSS
|
|
|
|
|
|
|
||||
Beginning of period
|
|
(435,061
|
)
|
|
|
|
|
|||
Other comprehensive income (loss)
|
|
(32,363
|
)
|
|
|
|
|
|||
End of period
|
|
(467,424
|
)
|
|
|
|
|
|||
TOTAL MOOG SHAREHOLDERS’ EQUITY
|
|
$
|
980,861
|
|
|
32,236,629
|
|
|
3,634,993
|
|
REDEEMABLE NONCONTROLLING INTEREST
|
|
|
|
|
|
|
||||
Beginning of period
|
|
$
|
5,651
|
|
|
|
|
|
||
Net loss attributable to redeemable noncontrolling interest
|
|
(506
|
)
|
|
|
|
|
|||
End of period
|
|
$
|
5,145
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended
|
||||||
(dollars in thousands)
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
||||
Net earnings attributable to Moog and noncontrolling interest
|
|
$
|
30,058
|
|
|
$
|
26,160
|
|
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
|
|
|
|
|
||||
Depreciation
|
|
17,918
|
|
|
19,208
|
|
||
Amortization
|
|
4,541
|
|
|
5,877
|
|
||
Deferred income taxes
|
|
1,371
|
|
|
3,532
|
|
||
Equity-based compensation expense
|
|
2,168
|
|
|
936
|
|
||
Other
|
|
9,868
|
|
|
804
|
|
||
Changes in assets and liabilities providing (using) cash:
|
|
|
|
|
||||
Receivables
|
|
(11,012
|
)
|
|
5,221
|
|
||
Inventories
|
|
6,996
|
|
|
(11,131
|
)
|
||
Accounts payable
|
|
6,737
|
|
|
(22,522
|
)
|
||
Customer advances
|
|
8,287
|
|
|
(498
|
)
|
||
Accrued expenses
|
|
(17,479
|
)
|
|
(17,114
|
)
|
||
Accrued income taxes
|
|
(8,885
|
)
|
|
(2,685
|
)
|
||
Net pension and post retirement liabilities
|
|
(1,295
|
)
|
|
(5,709
|
)
|
||
Other assets and liabilities
|
|
1,309
|
|
|
(2,534
|
)
|
||
Net cash provided (used) by operating activities
|
|
50,582
|
|
|
(455
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
||||
Acquisitions of businesses, net of cash acquired
|
|
—
|
|
|
(11,016
|
)
|
||
Purchase of property, plant and equipment
|
|
(14,849
|
)
|
|
(12,305
|
)
|
||
Other investing transactions
|
|
(976
|
)
|
|
1,021
|
|
||
Net cash (used) by investing activities
|
|
(15,825
|
)
|
|
(22,300
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
||||
Proceeds from revolving lines of credit
|
|
62,400
|
|
|
148,605
|
|
||
Payments on revolving lines of credit
|
|
(67,400
|
)
|
|
(93,605
|
)
|
||
Payments on long-term debt
|
|
(50
|
)
|
|
(9,540
|
)
|
||
Proceeds from sale of treasury stock
|
|
2,135
|
|
|
2,230
|
|
||
Purchase of outstanding shares for treasury
|
|
(5,211
|
)
|
|
(3,034
|
)
|
||
Proceeds from sale of stock held by SECT
|
|
867
|
|
|
—
|
|
||
Purchase of stock held by SECT
|
|
(5,709
|
)
|
|
(1,020
|
)
|
||
Excess tax benefits from equity-based payment arrangements
|
|
—
|
|
|
580
|
|
||
Net cash provided (used) by financing activities
|
|
(12,968
|
)
|
|
44,216
|
|
||
Effect of exchange rate changes on cash
|
|
(15,253
|
)
|
|
(7,996
|
)
|
||
Increase in cash and cash equivalents
|
|
6,536
|
|
|
13,465
|
|
||
Cash and cash equivalents at beginning of period
|
|
325,128
|
|
|
309,853
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
331,664
|
|
|
$
|
323,318
|
|
See accompanying Notes to Consolidated Condensed Financial Statements.
|
Standard
|
|
Description
|
|
Financial Statement Effect or Other Significant Matters
|
ASU no. 2014-09
Revenue from Contracts with Customers
(And All Related ASUs)
|
|
The standard requires revenue recognition to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and assets recognized from costs incurred to obtain or fulfill a contract. The provisions of the standard, as well as all subsequently issued clarifications to the standard, are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. The standard can be adopted using either a full retrospective or modified retrospective approach.
|
|
We are currently evaluating the alternative methods of adoption and the effect on our financial statements and related disclosures.
|
Planned date of adoption:
Q1 2019
|
||||
ASU no. 2016-01
Recognition and Measurement of Financial Assets and Financial Liabilities
|
|
The standard requires most equity investments to be measured at fair value, with subsequent changes in fair value recognized in net income. The amendment also impacts the measurement of financial liabilities under the fair value option as well as certain presentation and disclosure requirements for financial instruments. The provisions of the standard are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted for some, but not all, provisions. The amendment requires certain provisions to be applied prospectively and others to be applied by means of a cumulative-effect adjustment.
|
|
We are currently evaluating the effect on our financial statements and related disclosures.
|
Planned date of adoption:
Q1 2019
|
||||
ASU no. 2016-02
Leases
|
|
The standard requires most lease arrangements to be recognized in the balance sheet as lease assets and lease liabilities. The standard also requires additional disclosures about the leasing arrangements. The provisions of the standard are effective for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted.
|
|
We are currently evaluating the effect on our financial statements and related disclosures.
|
Planned date of adoption:
Q1 2020
|
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
Accounts receivable
|
|
$
|
281,728
|
|
|
$
|
306,469
|
|
Long-term contract receivables:
|
|
|
|
|
||||
Amounts billed
|
|
128,904
|
|
|
130,429
|
|
||
Unbilled recoverable costs and accrued profits
|
|
260,469
|
|
|
245,376
|
|
||
Total long-term contract receivables
|
|
389,373
|
|
|
375,805
|
|
||
Other
|
|
10,924
|
|
|
10,652
|
|
||
Total receivables
|
|
682,025
|
|
|
692,926
|
|
||
Less allowance for doubtful accounts
|
|
(4,184
|
)
|
|
(4,538
|
)
|
||
Receivables
|
|
$
|
677,841
|
|
|
$
|
688,388
|
|
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
Raw materials and purchased parts
|
|
$
|
169,515
|
|
|
$
|
174,331
|
|
Work in progress
|
|
231,193
|
|
|
235,258
|
|
||
Finished goods
|
|
63,694
|
|
|
69,451
|
|
||
Inventories
|
|
$
|
464,402
|
|
|
$
|
479,040
|
|
|
Aircraft
Controls |
Space and
Defense Controls |
Industrial
Systems |
Components
|
Total
|
||||||||||
Balance at October 1, 2016
|
$
|
179,694
|
|
$
|
174,514
|
|
$
|
106,318
|
|
$
|
279,636
|
|
$
|
740,162
|
|
Divestiture and held for sale
|
—
|
|
(1,012
|
)
|
—
|
|
—
|
|
(1,012
|
)
|
|||||
Foreign currency translation
|
(2,618
|
)
|
(510
|
)
|
(3,934
|
)
|
(1,817
|
)
|
(8,879
|
)
|
|||||
Balance at December 31, 2016
|
$
|
177,076
|
|
$
|
172,992
|
|
$
|
102,384
|
|
$
|
277,819
|
|
$
|
730,271
|
|
|
|
|
|
December 31, 2016
|
|
October 1, 2016
|
||||||||||||
|
|
Weighted-
Average Life (years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
||||||||
Customer-related
|
|
11
|
|
$
|
160,092
|
|
|
$
|
(115,978
|
)
|
|
$
|
165,445
|
|
|
$
|
(117,434
|
)
|
Technology-related
|
|
9
|
|
68,014
|
|
|
(51,380
|
)
|
|
70,277
|
|
|
(52,060
|
)
|
||||
Program-related
|
|
19
|
|
62,152
|
|
|
(25,754
|
)
|
|
64,774
|
|
|
(26,018
|
)
|
||||
Marketing-related
|
|
9
|
|
24,462
|
|
|
(17,725
|
)
|
|
25,031
|
|
|
(17,649
|
)
|
||||
Other
|
|
10
|
|
3,977
|
|
|
(2,920
|
)
|
|
4,269
|
|
|
(3,075
|
)
|
||||
Intangible assets
|
|
12
|
|
$
|
318,697
|
|
|
$
|
(213,757
|
)
|
|
$
|
329,796
|
|
|
$
|
(216,236
|
)
|
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
Lines of credit
|
|
$
|
86
|
|
|
$
|
99
|
|
Other short-term debt
|
|
1,280
|
|
|
1,280
|
|
||
Short-term borrowings
|
|
$
|
1,366
|
|
|
$
|
1,379
|
|
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
U.S. revolving credit facility
|
|
$
|
585,000
|
|
|
$
|
590,000
|
|
Senior notes
|
|
300,000
|
|
|
300,000
|
|
||
Securitization program
|
|
120,000
|
|
|
120,000
|
|
||
Obligations under capital leases
|
|
417
|
|
|
471
|
|
||
Senior debt
|
|
1,005,417
|
|
|
1,010,471
|
|
||
Less deferred debt issuance cost
|
|
(4,935
|
)
|
|
(5,457
|
)
|
||
Less current installments
|
|
(144
|
)
|
|
(167
|
)
|
||
Long-term debt
|
|
$
|
1,000,338
|
|
|
$
|
1,004,847
|
|
|
|
Three Months Ended
|
||||||
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
Warranty accrual at beginning of period
|
|
$
|
21,363
|
|
|
$
|
18,660
|
|
Warranties issued during current year
|
|
3,414
|
|
|
2,418
|
|
||
Adjustments to pre-existing warranties
|
|
(265
|
)
|
|
(134
|
)
|
||
Reductions for settling warranties
|
|
(1,044
|
)
|
|
(1,253
|
)
|
||
Foreign currency translation
|
|
(585
|
)
|
|
(300
|
)
|
||
Warranty accrual at end of period
|
|
$
|
22,883
|
|
|
$
|
19,391
|
|
|
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
280
|
|
|
$
|
379
|
|
Foreign currency contracts
|
Other assets
|
|
1
|
|
|
56
|
|
||
Interest rate swaps
|
Other current assets
|
|
387
|
|
|
52
|
|
||
Interest rate swaps
|
Other assets
|
|
419
|
|
|
69
|
|
||
|
Total asset derivatives
|
|
$
|
1,087
|
|
|
$
|
556
|
|
Foreign currency contracts
|
Other accrued liabilities
|
|
$
|
3,994
|
|
|
$
|
4,080
|
|
Foreign currency contracts
|
Other long-term liabilities
|
|
668
|
|
|
448
|
|
||
Interest rate swaps
|
Other accrued liabilities
|
|
59
|
|
|
201
|
|
||
|
Total liability derivatives
|
|
$
|
4,721
|
|
|
$
|
4,729
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency contracts
|
Other current assets
|
|
$
|
1,124
|
|
|
$
|
422
|
|
Foreign currency contracts
|
Other accrued liabilities
|
|
$
|
398
|
|
|
$
|
76
|
|
|
|
Classification
|
|
December 31,
2016 |
|
October 1,
2016 |
||||
Foreign currency contracts
|
|
Other current assets
|
|
$
|
1,404
|
|
|
$
|
801
|
|
Foreign currency contracts
|
|
Other assets
|
|
1
|
|
|
56
|
|
||
Interest rate swaps
|
|
Other current assets
|
|
387
|
|
|
52
|
|
||
Interest rate swaps
|
|
Other assets
|
|
419
|
|
|
69
|
|
||
|
|
Total assets
|
|
$
|
2,211
|
|
|
$
|
978
|
|
Foreign currency contracts
|
|
Other accrued liabilities
|
|
$
|
4,392
|
|
|
$
|
4,156
|
|
Foreign currency contracts
|
|
Other long-term liabilities
|
|
668
|
|
|
448
|
|
||
Interest rate swaps
|
|
Other accrued liabilities
|
|
59
|
|
|
201
|
|
||
|
|
Total liabilities
|
|
$
|
5,119
|
|
|
$
|
4,805
|
|
|
|
Three Months Ended
|
||||||
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
U.S. Plans
|
|
|
|
|
||||
Service cost
|
|
$
|
6,022
|
|
|
$
|
5,909
|
|
Interest cost
|
|
7,636
|
|
|
9,415
|
|
||
Expected return on plan assets
|
|
(13,628
|
)
|
|
(12,596
|
)
|
||
Amortization of prior service cost (credit)
|
|
47
|
|
|
47
|
|
||
Amortization of actuarial loss
|
|
8,419
|
|
|
6,542
|
|
||
Pension expense for U.S. defined benefit plans
|
|
$
|
8,496
|
|
|
$
|
9,317
|
|
Non-U.S. Plans
|
|
|
|
|
||||
Service cost
|
|
$
|
1,532
|
|
|
$
|
1,313
|
|
Interest cost
|
|
751
|
|
|
1,240
|
|
||
Expected return on plan assets
|
|
(1,131
|
)
|
|
(1,229
|
)
|
||
Amortization of prior service cost (credit)
|
|
(27
|
)
|
|
(19
|
)
|
||
Amortization of actuarial loss
|
|
1,120
|
|
|
650
|
|
||
Pension expense for non-U.S. defined benefit plans
|
|
$
|
2,245
|
|
|
$
|
1,955
|
|
|
|
Three Months Ended
|
||||||
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
U.S. defined contribution plans
|
|
$
|
3,670
|
|
|
$
|
3,441
|
|
Non-U.S. defined contribution plans
|
|
1,360
|
|
|
1,638
|
|
||
Total pension expense for defined contribution plans
|
|
$
|
5,030
|
|
|
$
|
5,079
|
|
|
|
U.S. Plans
|
|
Non-U.S. Plans
|
|
Total
|
||||||
Actual
|
|
$
|
10,857
|
|
|
$
|
1,179
|
|
|
$
|
12,036
|
|
Anticipated
|
|
52,671
|
|
|
6,091
|
|
|
58,762
|
|
|||
Total expected contributions
|
|
$
|
63,528
|
|
|
$
|
7,270
|
|
|
$
|
70,798
|
|
|
Aircraft Controls
|
Space and Defense Controls
|
Industrial Systems
|
Components
|
Corporate
|
Total
|
||||||||||||
Balance at October 1, 2016
|
$
|
1,474
|
|
$
|
665
|
|
$
|
3,611
|
|
$
|
369
|
|
$
|
1,727
|
|
$
|
7,846
|
|
Adjustments to provision
|
—
|
|
(44
|
)
|
(20
|
)
|
—
|
|
—
|
|
(64
|
)
|
||||||
Cash payments - 2014 plan
|
—
|
|
(125
|
)
|
—
|
|
—
|
|
—
|
|
(125
|
)
|
||||||
Cash payments - 2015 plan
|
(110
|
)
|
—
|
|
(91
|
)
|
—
|
|
—
|
|
(201
|
)
|
||||||
Cash payments - 2016 plan
|
(52
|
)
|
—
|
|
(347
|
)
|
(281
|
)
|
(86
|
)
|
(766
|
)
|
||||||
Foreign currency translation
|
(58
|
)
|
(3
|
)
|
(98
|
)
|
—
|
|
—
|
|
(159
|
)
|
||||||
Balance at December 31, 2016
|
$
|
1,254
|
|
$
|
493
|
|
$
|
3,055
|
|
$
|
88
|
|
$
|
1,641
|
|
$
|
6,531
|
|
|
|
Accumulated foreign currency translation
|
|
Accumulated retirement liability
|
|
Accumulated gain (loss) on derivatives
|
|
Total
|
||||||||
AOCIL at October 1, 2016
|
|
$
|
(110,626
|
)
|
|
$
|
(321,094
|
)
|
|
$
|
(3,341
|
)
|
|
$
|
(435,061
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
(40,538
|
)
|
|
2,563
|
|
|
(714
|
)
|
|
(38,689
|
)
|
||||
Amounts reclassified from AOCIL
|
|
(971
|
)
|
|
6,009
|
|
|
1,288
|
|
|
6,326
|
|
||||
Other comprehensive income (loss)
|
|
(41,509
|
)
|
|
8,572
|
|
|
574
|
|
|
(32,363
|
)
|
||||
AOCIL at December 31, 2016
|
|
$
|
(152,135
|
)
|
|
$
|
(312,522
|
)
|
|
$
|
(2,767
|
)
|
|
$
|
(467,424
|
)
|
|
|
|
|
Net deferral in AOCIL - effective portion
|
||||||
|
|
|
|
Three Months Ended
|
||||||
|
|
Statement of earnings classification
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
Foreign currency contracts
|
|
Sales
|
|
$
|
(762
|
)
|
|
$
|
(234
|
)
|
Foreign currency contracts
|
|
Cost of sales
|
|
(1,024
|
)
|
|
(268
|
)
|
||
Interest rate swaps
|
|
Interest
|
|
694
|
|
|
447
|
|
||
Net loss
|
|
|
|
(1,092
|
)
|
|
(55
|
)
|
||
Tax effect
|
|
|
|
378
|
|
|
(68
|
)
|
||
Net deferral in AOCIL of derivatives
|
|
$
|
(714
|
)
|
|
$
|
(123
|
)
|
|
|
Three Months Ended
|
||||
|
|
December 31,
2016 |
|
January 2,
2016 |
||
Basic weighted-average shares outstanding
|
|
35,869,052
|
|
|
36,713,949
|
|
Dilutive effect of equity-based awards
|
|
403,715
|
|
|
314,382
|
|
Diluted weighted-average shares outstanding
|
|
36,272,767
|
|
|
37,028,331
|
|
|
|
Three Months Ended
|
||||||
|
|
December 31,
2016 |
|
January 2,
2016 |
||||
Net sales:
|
|
|
|
|
||||
Aircraft Controls
|
|
$
|
268,450
|
|
|
$
|
253,957
|
|
Space and Defense Controls
|
|
92,930
|
|
|
83,518
|
|
||
Industrial Systems
|
|
112,399
|
|
|
125,179
|
|
||
Components
|
|
115,891
|
|
|
105,803
|
|
||
Net sales
|
|
$
|
589,670
|
|
|
$
|
568,457
|
|
Operating profit:
|
|
|
|
|
||||
Aircraft Controls
|
|
$
|
23,111
|
|
|
$
|
18,432
|
|
Space and Defense Controls
|
|
7,096
|
|
|
11,515
|
|
||
Industrial Systems
|
|
10,701
|
|
|
13,633
|
|
||
Components
|
|
11,454
|
|
|
7,979
|
|
||
Total operating profit
|
|
52,362
|
|
|
51,559
|
|
||
Deductions from operating profit:
|
|
|
|
|
||||
Interest expense
|
|
8,486
|
|
|
8,322
|
|
||
Equity-based compensation expense
|
|
2,168
|
|
|
936
|
|
||
Corporate and other expenses, net
|
|
5,220
|
|
|
6,646
|
|
||
Earnings before income taxes
|
|
$
|
36,488
|
|
|
$
|
35,655
|
|
•
|
Defense market - primary and secondary flight controls for military aircraft, stabilization and automatic ammunition loading controls for armored combat vehicles, tactical and strategic missile steering controls and gun aiming controls.
|
•
|
Commercial aircraft market - primary and secondary flight controls for commercial aircraft.
|
•
|
Commercial space market - satellite positioning controls and thrust vector controls for space launch vehicles.
|
•
|
Industrial automation market - injection molding, metal forming, heavy industry, material and automotive testing and pilot training simulators.
|
•
|
Energy market - wind energy, power generation and oil and gas exploration.
|
•
|
Medical market - enteral clinical nutrition and infusion therapy pumps, CT scanners and ultrasonic sensors and surgical handpieces.
|
•
|
superior technical competence in delivering mission-critical solutions,
|
•
|
a focused customer-intimacy approach,
|
•
|
a diverse base of customers and end markets served by a broad product portfolio, and
|
•
|
a well-established international presence serving customers worldwide.
|
•
|
maintaining our technological excellence by building upon our systems integration capabilities while solving our customers’ most demanding technical problems in applications "When Performance Really Matters
®
,"
|
•
|
utilizing our global capabilities and strong engineering heritage to expand our product offerings,
|
•
|
maximizing customer value by implementing lean enterprise principles, and
|
•
|
investing in talent development to strengthen our leadership capability and employee performance.
|
CONSOLIDATED RESULTS OF OPERATIONS AND OUTLOOK
|
|||||||||||
|
|
|
|
|
|||||||
|
Three Months Ended
|
||||||||||
(dollars and shares in millions, except per share data)
|
December 31, 2016
|
January 2, 2016
|
$ Variance
|
% Variance
|
|||||||
Net sales
|
$
|
590
|
|
$
|
568
|
|
$
|
21
|
|
4
|
%
|
Gross margin
|
29.3
|
%
|
28.4
|
%
|
|
|
|||||
Research and development expenses
|
$
|
35
|
|
$
|
35
|
|
$
|
—
|
|
(1
|
%)
|
Selling, general and administrative expenses as a percentage of sales
|
14.4
|
%
|
14.6
|
%
|
|
|
|||||
Interest expense
|
$
|
8
|
|
$
|
8
|
|
$
|
—
|
|
2
|
%
|
Other
|
$
|
8
|
|
$
|
—
|
|
$
|
8
|
|
n/a
|
|
Effective tax rate
|
17.6
|
%
|
26.6
|
%
|
|
|
|||||
Net earnings attributable to Moog
|
$
|
31
|
|
$
|
26
|
|
$
|
4
|
|
16
|
%
|
Diluted average common shares outstanding
|
36
|
|
37
|
|
(1
|
)
|
(2
|
%)
|
|||
Diluted earnings per share attributable to Moog
|
$
|
0.84
|
|
$
|
0.71
|
|
$
|
0.13
|
|
18
|
%
|
|
Three Months Ended
|
||||||||||
(dollars in millions)
|
December 31, 2016
|
January 2, 2016
|
$ Variance
|
% Variance
|
|||||||
Net sales - military aircraft
|
$
|
128
|
|
$
|
120
|
|
$
|
8
|
|
6
|
%
|
Net sales - commercial aircraft
|
141
|
|
134
|
|
7
|
|
5
|
%
|
|||
|
$
|
268
|
|
$
|
254
|
|
$
|
14
|
|
6
|
%
|
Operating profit
|
$
|
23
|
|
$
|
18
|
|
$
|
5
|
|
25
|
%
|
Operating margin
|
8.6
|
%
|
7.3
|
%
|
|
|
|||||
Backlog
|
$
|
610
|
|
$
|
639
|
|
$
|
(29
|
)
|
(5
|
%)
|
|
Three Months Ended
|
||||||||||
(dollars in millions)
|
December 31, 2016
|
January 2, 2016
|
$ Variance
|
% Variance
|
|||||||
Net sales
|
$
|
93
|
|
$
|
84
|
|
$
|
9
|
|
11
|
%
|
Operating profit
|
$
|
7
|
|
$
|
12
|
|
$
|
(4
|
)
|
(38
|
%)
|
Operating margin
|
7.6
|
%
|
13.8
|
%
|
|
|
|||||
Backlog
|
$
|
278
|
|
$
|
238
|
|
$
|
41
|
|
17
|
%
|
|
Three Months Ended
|
||||||||||
(dollars in millions)
|
December 31, 2016
|
January 2, 2016
|
$ Variance
|
% Variance
|
|||||||
Net sales
|
$
|
112
|
|
$
|
125
|
|
$
|
(13
|
)
|
(10
|
%)
|
Operating profit
|
$
|
11
|
|
$
|
14
|
|
$
|
(3
|
)
|
(22
|
%)
|
Operating margin
|
9.5
|
%
|
10.9
|
%
|
|
|
|||||
Backlog
|
$
|
134
|
|
$
|
166
|
|
$
|
(31
|
)
|
(19
|
%)
|
|
Three Months Ended
|
||||||||||
(dollars in millions)
|
December 31, 2016
|
January 2, 2016
|
$ Variance
|
% Variance
|
|||||||
Net sales
|
$
|
116
|
|
$
|
106
|
|
$
|
10
|
|
10
|
%
|
Operating profit
|
$
|
11
|
|
$
|
8
|
|
$
|
3
|
|
44
|
%
|
Operating margin
|
9.9
|
%
|
7.5
|
%
|
|
|
|||||
Backlog
|
$
|
168
|
|
$
|
171
|
|
$
|
(3
|
)
|
(2
|
%)
|
|
Three Months Ended
|
||||||||||
(dollars in millions)
|
December 31,
2016 |
January 2,
2016 |
$ Variance
|
% Variance
|
|||||||
Net cash provided (used) by:
|
|
|
|
|
|||||||
Operating activities
|
$
|
51
|
|
$
|
—
|
|
$
|
51
|
|
n/a
|
|
Investing activities
|
(16
|
)
|
(22
|
)
|
6
|
|
(29
|
%)
|
|||
Financing activities
|
(13
|
)
|
44
|
|
(57
|
)
|
(129
|
%)
|
•
|
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;
|
•
|
we may not realize the full amounts reflected in our backlog as revenue, which could adversely affect our future revenue and growth prospects;
|
•
|
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 The Boeing Company as a customer or a significant reduction in sales to The Boeing Company 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 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;
|
•
|
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 otherwise adversely affect our business;
|
•
|
governmental regulations and customer demands related to conflict minerals may adversely impact our operating results;
|
•
|
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;
|
•
|
our operations are subject to environmental laws, and complying with those laws may cause us to incur significant costs; and
|
•
|
we are involved in various legal proceedings, the outcome of which may be unfavorable to us.
|
(a)
|
Disclosure Controls and Procedures. We carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report, to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
|
(b)
|
Changes in Internal Control over Financial Reporting. There have been no changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
|
(c)
|
The following table summarizes our purchases of our common stock for the quarter ended
December 31, 2016
.
|
Period
|
|
(a) Total
Number of Shares Purchased (1)(2) |
|
(b) Average
Price Paid Per Share |
|
(c) Total number
of Shares Purchased as Part of Publicly Announced Plans or Programs (3) |
|
(d) Maximum
Number (or Approx. Dollar Value) of Shares that May Yet Be Purchased Under Plans or Programs (3) |
|||||
October 2, 2016 - October 31, 2016
|
|
9,808
|
|
|
$
|
57.50
|
|
|
—
|
|
|
3,352,009
|
|
November 1, 2016 - November 30, 2016
|
|
126,972
|
|
|
67.86
|
|
|
—
|
|
|
3,352,009
|
|
|
December 1, 2016 - December 31, 2016
|
|
25,711
|
|
|
67.77
|
|
|
412
|
|
|
3,351,597
|
|
|
Total
|
|
162,491
|
|
|
$
|
67.22
|
|
|
412
|
|
|
3,351,597
|
|
(1)
|
Reflects purchases by the Moog Inc. Stock Employee Compensation Trust Agreement ("SECT") of shares of Class B common stock from the Moog Inc. Retirement Savings Plan ("RSP") at average prices as follows: 9,808 shares at $57.50 per share during October; 64,522 shares at $69.33 per share during November; and 10,111 shares at $66.44 per share during December.
|
(2)
|
In connection with the exercise of equity-based compensation awards, we accept delivery of shares to pay for the exercise price and withhold shares for tax withholding obligations. In November, we accepted delivery of 47,450 shares at $69.04 per share and in December, we accepted delivery of 15,188 shares at $68.69 per share, in connection with the exercise of equity-based awards. To administratively accommodate equity awards issued in November, we purchased 15,000 Class B shares from the SECT at $57.82 per share.
|
(3)
|
The Board of Directors has authorized a share repurchase program. This program has been amended from time to time to authorize additional repurchases up to an aggregate 13 million common shares. The program permits the purchase of shares of Class A or Class B common stock in open market or privately negotiated transactions at the discretion of management. In December, we purchased 412 Class B shares at an average price of $66.57 per share.
|
(a)
|
Exhibits
|
||
|
31.1
|
Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
31.2
|
Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
32.1
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
Interactive Date files (submitted electronically herewith)
|
(101.INS)
|
XBRL Instance Document
|
|
|
(101.SCH)
|
XBRL Taxonomy Extension Schema Document
|
|
|
(101.CAL)
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
(101.DEF)
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
(101.LAB)
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
(101.PRE)
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
Moog Inc.
|
|
|
|
|
|
|
|
|
|
|
|
(Registrant)
|
|
|
|
|
|
|
|
Date:
|
January 31, 2017
|
|
By
|
/s/ John R. Scannell
|
|
|
|
|
|
John R. Scannell
|
|
|
|
|
|
Chairman Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
|
|
|
Date:
|
January 31, 2017
|
|
By
|
/s/ Donald R. Fishback
|
|
|
|
|
|
Donald R. Fishback
|
|
|
|
|
|
Vice President
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
Date:
|
January 31, 2017
|
|
By
|
/s/ Jennifer Walter
|
|
|
|
|
|
Jennifer Walter
|
|
|
|
|
|
Controller (Principal Accounting Officer)
|
|
|
|
|
|
|
|
1 Year Moog Chart |
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