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Name | Symbol | Market | Type |
---|---|---|---|
Moat A Shares | LSE:MOGB | London | Exchange Traded Fund |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.59 | -1.35% | 43.02 | 43.05 | 43.10 | 43.49 | 42.745 | 43.38 | 6,711 | 16:35:13 |
Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and controls systems, today reported fiscal year 2023 diluted earnings per share of $5.34 and adjusted diluted earnings per share of $6.15.
(in millions, except per share results)
Three Months Ended
Twelve Months Ended
Q4 2023
Q4 2022
Deltas
Q4 2023
Q4 2022
Deltas
Net sales
$
872
$
768
14
%
$
3,319
$
3,036
9
%
Operating margin
10.1
%
8.6
%
150 bps
10.3
%
9.3
%
100 bps
Adjusted operating margin
12.5
%
10.4
%
210 bps
10.9
%
10.2
%
70 bps
Diluted net earnings per share
$
1.23
$
0.92
34
%
$
5.34
$
4.83
11
%
Adjusted diluted net earnings per share
$
2.10
$
1.36
54
%
$
6.15
$
5.56
11
%
Adjusted free cash flow
$
105
$
19
$
86
$
(37
)
$
7
$
(45
)
See the reconciliations of adjusted financial results to reported results included in the financial statements herein for the quarters ended September 30, 2023 and October 1, 2022.
Quarter Highlights
Year Highlights
"We had an exceptional quarter that rounded out a great year for our company," said Pat Roche, CEO. "Sales were very strong, and margin enhancement through our pricing and simplification initiatives are delivering results. We are on-track to deliver our long-term Investor Day financial targets."
Quarter Results
Sales in the fourth quarter of 2023 increased across all segments compared to the fourth quarter of 2022. Aircraft Controls' sales increased 16% to $377 million, as the continued market recovery in OEM widebody aircraft and business jet activity increased commercial aircraft sales 42%. Sales in Space and Defense Controls increased 11% to $241 million due to higher demand for defense products in both space and defense applications. Industrial Systems' sales increased 12% to $254 million due to higher demand for industrial automation programs and flight simulation systems.
Adjusted operating margin increased 210 basis points to 12.5% in the fourth quarter of 2023 compared to the fourth quarter of 2022. Aircraft Controls' adjusted operating margin increased 210 basis points driven by retroactive pricing and 80/20 initiatives. These benefits were tempered by additional charges on near-complete funded development programs. Space and Defense Controls' adjusted operating margin expanded 340 basis points due to lower charges associated with our space vehicles development programs and pricing benefits. Adjusted operating margin for Industrial Systems increased 110 basis points as a result of pricing initiatives.
Non-operating expenses in the fourth quarter of 2023 included the benefits of a favorable litigation settlement and lower effective tax rate, which were not anticipated in our prior guidance. These benefits were moderated by incremental interest expense.
Year Results
Sales in fiscal 2023 increased across all segments compared to fiscal 2022. Aircraft Controls' sales increased 11% to $1.4 billion, reflecting the commercial recovery, partially offset by lower funded development activities for military programs. Space and Defense Controls' sales of $947 million increased 11%, after adjusting for the divestiture of the security business last year, due to growth in defense programs across our product portfolio. Industrial Systems' sales of $983 million increased 12%, excluding last year's sonar business divestiture and foreign exchange impacts, due to increased demand for industrial automation and flight simulation programs.
Adjusted operating margin increased 70 basis points to 10.9% compared to 2022. Adjusted operating margin increased 200 basis points in Industrial Systems and increased 70 basis points in Aircraft Controls due largely to pricing benefits. Also within Aircraft Controls, margin expansion was impacted by additional charges for military funded development programs. Space and Defense Controls' adjusted operating margin decreased 40 basis points as charges associated with our space vehicles development programs more than offset underlying stronger operational results.
Free Cash Flow Results
Free cash flow was $105 million in the fourth quarter of 2023. Higher collections from customers and the timing of compensation and vendor payments contributed to the reduction in working capital. Capital expenditures were $48 million in the quarter. Free cash flow in 2023 was a cash use of $37 million, as growing customer demand as well as supply chain constraints drove working capital pressures, primarily in physical inventories. Capital expenditures were $173 million in the year, reflecting necessary investments in facilities and equipment to support customer demand.
2024 Financial Guidance
"Fiscal year 2024 will be another positive step on our journey towards our long-term financial targets," said Jennifer Walter, CFO. "Our operating margin will expand by over 100 basis points and earnings per share will increase over 10%."
(in millions, except per share results)
FY 2024 Guidance
Initial
Net sales
$
3,450
Operating margin
12.0
%
Diluted net earnings per share
$
6.80
Earnings per share figures are forecasted to be within range of +/- $0.20.
Conference call information
In conjunction with today’s release, Pat Roche, CEO, and Jennifer Walter, CFO, will host a conference call today beginning at 10:00 a.m. ET, which will be simultaneously broadcast live online. Listeners can access the call live, or in replay mode, at www.moog.com/investors/communications. Supplemental financial data will be available on the website approximately 90 minutes prior to the conference call.
Cautionary Statement
Information included or incorporated by reference in this press release 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 forward-looking 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. In evaluating these forward-looking statements, you should carefully consider the factors set forth below.
Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the SEC and include the following:
Strategic risks
Market condition risks
Operational risks
Financial risks
Legal and compliance risks
General risks
While we believe we have identified and discussed above the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial 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. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this report, except as required by law.
Moog Inc.
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(dollars in thousands, except per share data)
Three Months Ended
Twelve Months Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net sales
$
872,051
$
767,999
$
3,319,122
$
3,035,783
Cost of sales
623,808
564,642
2,423,245
2,211,384
Inventory write-down
4,345
191
4,345
3,598
Gross profit
243,898
203,166
891,532
820,801
Research and development
29,444
25,209
106,551
109,527
Selling, general and administrative
118,041
111,829
469,836
448,531
Interest
18,227
11,381
63,578
36,757
Asset impairment
12,974
2,125
14,628
18,053
Restructuring
3,260
1,140
7,997
9,509
Loss on sale of businesses
900
19,492
900
3,346
Gain on sale of buildings
—
(9,075
)
(10,030
)
(9,075
)
Pension settlement
12,542
—
12,542
—
Other
(599
)
(1,969
)
9,478
1,174
Earnings before income taxes
49,109
43,034
216,052
202,979
Income taxes
9,527
13,618
45,054
47,802
Net earnings
$
39,582
$
29,416
$
170,998
$
155,177
Net earnings per share
Basic
$
1.24
$
0.92
$
5.37
$
4.85
Diluted
$
1.23
$
0.92
$
5.34
$
4.83
Average common shares outstanding
Basic
31,893,646
31,945,478
31,831,687
31,977,482
Diluted
32,187,501
32,086,583
32,044,226
32,117,028
Moog Inc.
RECONCILIATION TO ADJUSTED NET EARNINGS BEFORE TAXES, INCOMES TAXES, NET EARNINGS AND DILUTIVE NET EARNINGS PER SHARE (UNAUDITED)
(dollars in thousands)
Three Months Ended
Twelve Months Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
As Reported:
Earnings before income taxes
$
49,109
$
43,034
$
216,052
$
202,979
Income taxes
9,527
13,618
45,054
47,802
Effective income tax rate
19.4
%
31.6
%
20.9
%
23.6
%
Net earnings
39,582
29,416
170,998
155,177
Diluted net earnings per share
$
1.23
$
0.92
$
5.34
$
4.83
Loss on Sale of Businesses:
Earnings before income taxes
$
900
$
19,492
$
900
$
3,346
Income taxes
212
970
212
(3,303
)
Net earnings
688
18,522
688
6,649
Diluted net earnings per share
$
0.02
$
0.58
$
0.02
$
0.21
Gain on Sale of Buildings:
Earnings before income taxes
$
—
$
(9,075
)
$
(10,030
)
$
(9,075
)
Income taxes
—
(2,142
)
(2,086
)
(2,142
)
Net earnings
—
(6,933
)
(7,944
)
(6,933
)
Diluted net earnings per share
$
—
$
(0.22
)
$
(0.25
)
$
(0.22
)
Pension Settlement:
Earnings before income taxes
$
12,542
$
—
$
12,542
$
—
Income taxes
2,960
—
2,960
—
Net earnings
9,582
—
9,582
—
Diluted net earnings per share
$
0.30
$
—
$
0.30
$
—
Asset Impairment:
Earnings before income taxes
$
12,974
$
2,125
$
14,628
$
18,053
Income taxes
937
502
1,285
4,219
Net earnings
12,037
1,623
13,343
13,834
Diluted net earnings per share
$
0.37
$
0.05
$
0.42
$
0.43
Inventory Write-down, Restructuring and Other:
Earnings before income taxes
$
7,605
$
1,332
$
13,391
$
13,107
Income taxes
1,746
343
3,050
3,228
Net earnings
5,859
989
10,341
9,879
Diluted net earnings per share
$
0.18
$
0.03
$
0.32
$
0.31
As Adjusted:
Earnings before income taxes
$
83,130
$
56,908
$
247,483
$
228,410
Income taxes
15,382
13,291
50,475
49,804
Effective income tax rate
18.5
%
23.4
%
20.4
%
21.8
%
Net earnings
67,748
43,617
197,008
178,606
Diluted net earnings per share
$
2.10
$
1.36
$
6.15
$
5.56
The diluted net earnings per share associated with the adjustments in the table above may not reconcile when totaled due to rounding.
Results shown above have been adjusted to exclude impacts associated with the sale of our Navigation Aids business formerly in Aircraft Controls; the sale of buildings formerly used in Industrial Systems, a one-time pension settlement charge stemming from those participants that opted to take a one time lump sum distribution in lieu of continuing monthly payments; asset impairment resulting from inventory write-downs, an announced program retirement; as well as, restructuring and other charges related to the impact of continued portfolio shaping activities and the Ukraine crisis. While management believes that these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company, this information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
Moog Inc.
CONSOLIDATED SALES AND OPERATING PROFIT (UNAUDITED)
(dollars in thousands)
Three Months Ended
Twelve Months Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net sales:
Aircraft Controls
$
376,859
$
323,859
$
1,389,147
$
1,256,461
Space and Defense Controls
241,211
217,494
947,251
872,343
Industrial Systems
253,981
226,646
982,724
906,979
Net sales
$
872,051
$
767,999
$
3,319,122
$
3,035,783
Operating profit:
Aircraft Controls
$
45,335
$
34,811
$
144,803
$
123,620
12.0
%
10.7
%
10.4
%
9.8
%
Space and Defense Controls
29,563
16,102
95,949
86,844
12.3
%
7.4
%
10.1
%
10.0
%
Industrial Systems
12,982
14,986
102,165
72,384
5.1
%
6.6
%
10.4
%
8.0
%
Total operating profit
87,880
65,899
342,917
282,848
10.1
%
8.6
%
10.3
%
9.3
%
Deductions from operating profit:
Interest expense
18,227
11,381
63,578
36,757
Equity-based compensation expense
2,461
2,135
10,582
8,882
Pension settlement
12,542
—
12,542
—
Non-service pension expense
2,986
1,673
12,324
6,072
Corporate and other expenses, net
2,555
7,676
27,839
28,158
Earnings before income taxes
$
49,109
$
43,034
$
216,052
$
202,979
Moog Inc.
RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)
(dollars in thousands)
Three Months Ended
Twelve Months Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Aircraft Controls operating profit - as reported
$
45,335
$
34,811
$
144,803
$
123,620
Inventory write-down
1,616
—
1,616
202
Asset impairment
235
—
1,670
15,487
Loss (gain) on sale of business
900
—
900
(16,146
)
Restructuring and other
168
—
443
3,795
Aircraft Controls operating profit - as adjusted
$
48,254
$
34,811
$
149,432
$
126,958
12.8
%
10.7
%
10.8
%
10.1
%
Space and Defense Controls operating profit - as reported
$
29,563
$
16,102
$
95,949
$
86,844
Inventory write-down
—
192
—
1,692
Asset impairment
—
—
219
—
Loss on sale of business
—
4,112
—
4,112
Restructuring and other
1,348
139
2,902
2,063
Space and Defense Controls operating profit - as adjusted
$
30,911
$
20,545
$
99,070
$
94,711
12.8
%
9.4
%
10.5
%
10.9
%
Industrial Systems operating profit - as reported
$
12,982
$
14,986
$
102,165
$
72,384
Inventory write-down
2,729
—
2,729
1,705
Asset impairment
12,739
2,125
12,739
2,767
Loss on sale of business
—
15,379
—
15,379
Gain on sale of buildings
—
(9,075
)
(10,030
)
(9,075
)
Restructuring and other
1,744
1,001
5,701
3,450
Industrial Systems operating profit - as adjusted
$
30,194
$
24,416
$
113,304
$
86,610
11.9
%
10.8
%
11.5
%
9.5
%
Total operating profit - as adjusted
$
109,359
$
79,772
$
361,806
$
308,279
12.5
%
10.4
%
10.9
%
10.2
%
Moog Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
September 30, 2023
October 1, 2022
ASSETS
Current assets
Cash and cash equivalents
$
68,959
$
101,990
Restricted cash
185
15,338
Receivables, net
434,723
375,502
Unbilled receivables
706,601
614,760
Inventories, net
724,002
588,466
Prepaid expenses and other current assets
50,862
60,349
Total current assets
1,985,332
1,756,405
Property, plant and equipment, net
814,696
668,908
Operating lease right-of-use assets
56,067
69,072
Goodwill
821,301
805,320
Intangible assets, net
71,637
85,410
Deferred income taxes
8,749
8,630
Other assets
50,254
38,096
Total assets
$
3,808,036
$
3,431,841
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current installments of long-term debt
$
—
$
916
Accounts payable
264,573
232,104
Accrued compensation
111,154
93,141
Contract advances and progress billings
377,977
296,899
Accrued liabilities and other
211,769
215,376
Total current liabilities
965,473
838,436
Long-term debt, excluding current installments
863,092
836,872
Long-term pension and retirement obligations
157,455
140,602
Deferred income taxes
37,626
63,527
Other long-term liabilities
148,303
115,591
Total liabilities
2,171,949
1,995,028
Shareholders’ equity
Common stock - Class A
43,822
43,807
Common stock - Class B
7,458
7,473
Additional paid-in capital
608,270
516,123
Retained earnings
2,496,979
2,360,055
Treasury shares
(1,057,938
)
(1,047,012
)
Stock Employee Compensation Trust
(114,769
)
(73,602
)
Supplemental Retirement Plan Trust
(93,126
)
(58,989
)
Accumulated other comprehensive loss
(254,609
)
(311,042
)
Total shareholders’ equity
1,636,087
1,436,813
Total liabilities and shareholders’ equity
$
3,808,036
$
3,431,841
Moog Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Twelve Months Ended
September 30, 2023
October 1, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings
$
170,998
$
155,177
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation
78,692
75,238
Amortization
11,541
13,151
Deferred income taxes
(34,700
)
11,739
Equity-based compensation expense
10,582
8,882
Loss on sale of businesses
900
3,346
Gain on sale of buildings
(10,030
)
(9,075
)
Asset impairment and inventory write-down
18,973
21,651
Pension settlement
12,542
—
Other
6,244
6,818
Changes in assets and liabilities providing (using) cash:
Receivables
(56,575
)
7,668
Unbilled receivables
(87,915
)
(94,535
)
Inventories
(130,378
)
(28,677
)
Accounts payable
28,641
43,349
Contract advances and progress billings
79,983
42,097
Accrued expenses
(1,692
)
(4,445
)
Accrued income taxes
22,038
3,070
Net pension and post retirement liabilities
13,940
18,093
Other assets and liabilities
2,151
(26,745
)
Net cash provided by operating activities
135,935
246,802
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired
—
(11,832
)
Purchase of property, plant and equipment
(173,286
)
(139,431
)
Net proceeds from businesses sold
1,892
57,315
Net proceeds from buildings sold
19,702
13,297
Other investing transactions
(11,455
)
(4,573
)
Net cash used by investing activities
(163,147
)
(85,224
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving lines of credit
1,044,101
840,475
Payments on revolving lines of credit
(1,017,420
)
(827,801
)
Payments on long-term debt
(916
)
(80,364
)
Payments on finance lease obligations
(4,620
)
(2,524
)
Payment of dividends
(34,074
)
(32,970
)
Proceeds from sale of treasury stock
19,785
18,414
Purchase of outstanding shares for treasury
(29,306
)
(48,558
)
Proceeds from sale of stock held by SECT
15,713
13,250
Purchase of stock held by SECT
(14,251
)
(14,830
)
Other financing transactions
(2,027
)
—
Net cash used by financing activities
(23,015
)
(134,908
)
Effect of exchange rate changes on cash
2,043
(10,256
)
Increase (decrease) in cash, cash equivalents and restricted cash
(48,184
)
16,414
Cash, cash equivalents and restricted cash at beginning of period
117,328
100,914
Cash, cash equivalents and restricted cash at end of period
$
69,144
$
117,328
Moog Inc.
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (UNAUDITED)
(dollars in thousands)
Three Months Ended
Twelve Months Ended
September 30, 2023
October 1, 2022
September 30, 2023
October 1, 2022
Net cash provided by operating activities
$
153,032
$
62,538
$
135,935
$
246,802
Purchase of property, plant and equipment
(48,212
)
(32,718
)
(173,286
)
(139,431
)
Free cash flow
104,820
29,820
(37,351
)
107,371
Securitization
—
(10,900
)
—
(100,000
)
Adjusted free cash flow
$
104,820
$
18,920
$
(37,351
)
$
7,371
Amounts may not reconcile when totaled due to rounding.
Free cash flow is defined as net cash provided by operating activities less capital expenditures. Adjusted free cash flow is defined as free cash flow adjusted for securitization activity. The securitization under GAAP reduced 2022 receivables and net debt and increased cash flow from operations. Free cash flow and adjusted free cash flow are not measures determined in accordance with GAAP and may not be comparable with the measures as used by other companies, however management believes these adjusted financial measures may be useful in evaluating the financial condition and results of operations of the Company. This information should be considered supplemental and is not a substitute for financial information prepared in accordance with GAAP.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231103950835/en/
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