Moog Inc 10-Q for FY2024 Q1

Moog Inc. (MOG-A)

10-Q 2024-01-26 For: 2023-12-30

Added on April 04, 2026

About this 10-Q

Moog Inc filed this 10-Q on January 26, 2024, covering the quarter ended December 30, 2023 (FY2024 Q1).

Headline figures

Quarter ended December 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $856.85M; up 12.7% from $760.1M a year earlier
Net income: $47.81M; up 3.9% from net income of $46.02M a year earlier
Diluted EPS: $1.48; up 2.8% from $1.44 a year earlier

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Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock	MOG.A	New York Stock Exchange
Class B common stock	MOG.B	New York Stock Exchange


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


	Three Months Ended
(dollars in thousands, except share and per share data)		December 30, 2023		December 31, 2022
Net sales		$	856,850	$	760,103
Cost of sales		623,651		556,417

Gross profit		233,199		203,686
Research and development		30,579		23,862
Selling, general and administrative		118,725		113,165
Interest		16,694		13,132

Restructuring		1,889		1,078

Gain on sale of buildings		—		(9,503)
Other		2,701		1,651
Earnings before income taxes		62,611		60,301
Income taxes		14,799		14,285




Net earnings		$	47,812	$	46,016

Net earnings per share
Basic		$	1.50	$	1.45
Diluted		$	1.48	$	1.44

Weighted average common shares outstanding
Basic		31,902,101		31,746,001
Diluted		32,249,313		31,874,718
See accompanying Notes to Consolidated Condensed Financial Statements.


	Three Months Ended
(dollars in thousands)		December 30, 2023		December 31, 2022
Net earnings		$	47,812	$	46,016
Other comprehensive income ("OCI"), net of tax:
Foreign currency translation adjustment		31,013		50,735
Retirement liability adjustment		1,678		1,199
Change in accumulated loss on derivatives		318		1,919
Other comprehensive income, net of tax		33,009		53,853



Comprehensive income		$	80,821	$	99,869
See accompanying Notes to Consolidated Condensed Financial Statements.


(dollars in thousands)	December 30, 2023		September 30, 2023
ASSETS
Current assets
Cash and cash equivalents	$	126,398	$	68,959
Restricted cash	430		185
Receivables, net	381,609		434,723
Unbilled receivables	760,561		706,601
Inventories, net	788,040		724,002
Prepaid expenses and other current assets	59,577		50,862
Total current assets	2,116,615		1,985,332
Property, plant and equipment, net	842,682		814,696
Operating lease right-of-use assets	59,489		56,067
Goodwill	833,413		821,301
Intangible assets, net	72,663		71,637
Deferred income taxes	9,284		8,749
Other assets	53,809		50,254
Total assets	$	3,987,955	$	3,808,036
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities


Accounts payable	$	261,155	$	264,573
Accrued compensation	64,099		111,154
Contract advances and progress billings	445,706		377,977

Accrued liabilities and other	238,871		211,769
Total current liabilities	1,009,831		965,473
Long-term debt, excluding current installments	920,103		863,092
Long-term pension and retirement obligations	160,825		157,455
Deferred income taxes	35,214		37,626
Other long-term liabilities	154,765		148,303
Total liabilities	2,280,738		2,171,949


Shareholders’ equity
Common stock - Class A	43,826		43,822
Common stock - Class B	7,454		7,458
Additional paid-in capital	673,261		608,270
Retained earnings	2,536,172		2,496,979
Treasury shares	(1,065,654)		(1,057,938)
Stock Employee Compensation Trust	(146,373)		(114,769)
Supplemental Retirement Plan Trust	(119,869)		(93,126)
Accumulated other comprehensive loss	(221,600)		(254,609)
Total shareholders’ equity	1,707,217		1,636,087


Total liabilities and shareholders’ equity	$	3,987,955	$	3,808,036
See accompanying Notes to Consolidated Condensed Financial Statements.


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Three Months Ended
(share data)		December 30, 2023	December 31, 2022
COMMON STOCK - CLASS A
Beginning of period		43,822,344	43,806,835
Conversion of Class B to Class A		3,573	—
End of period		43,825,917	43,806,835
COMMON STOCK - CLASS B
Beginning of period		7,457,369	7,472,878
Conversion of Class B to Class A		(3,573)	—
End of period		7,453,796	7,472,878
TREASURY SHARES - CLASS A COMMON STOCK
Beginning of period		(14,657,897)	(14,614,444)

Class A shares issued related to compensation		18,411	35,550
Class A shares purchased		(7,533)	(87,614)
End of period		(14,647,019)	(14,666,508)
TREASURY SHARES - CLASS B COMMON STOCK
Beginning of period		(2,896,845)	(3,020,291)
Class B shares issued related to compensation		64,263	72,740
Class B shares purchased		(59,112)	(44,350)
End of period		(2,891,694)	(2,991,901)
SECT - CLASS A COMMON STOCK



Beginning and end of period		(425,148)	(425,148)
SECT - CLASS B COMMON STOCK
Beginning of period		(592,128)	(611,942)
Issuance of shares		37,308	30,069
Purchase of shares		(29,780)	(20,727)
End of period		(584,600)	(602,600)
SERP - CLASS B COMMON STOCK



Beginning and end of period		(826,170)	(826,170)
See accompanying Notes to Consolidated Condensed Financial Statements.


	December 30, 2023		September 30, 2023
Unbilled receivables	$	760,561	$	706,601
Contract advances and progress billings	445,706		377,977
Net contract assets	$	314,855	$	328,624


	December 30, 2023		September 30, 2023
Accounts receivable	$	369,853	$	426,804



Other	15,467		11,929
Less allowance for credit losses	(3,711)		(4,010)
Receivables, net	$	381,609	$	434,723


	December 30, 2023		September 30, 2023
Raw materials and purchased parts	$	292,483	$	270,305
Work in progress	405,599		368,277
Finished goods	89,958		85,420
Inventories, net	$	788,040	$	724,002


	December 30, 2023		September 30, 2023
Land	$	32,107	$	31,417
Buildings and improvements	672,924		646,079
Machinery and equipment	849,330		827,257
Computer equipment and software	228,926		228,284
Property, plant and equipment, at cost	1,783,287		1,733,037
Less accumulated depreciation and amortization	(940,605)		(918,341)
Property, plant and equipment, net	$	842,682	$	814,696


	December 30, 2023			September 30, 2023
Operating Leases:
Operating lease right-of-use assets	$	59,489		$	56,067

Accrued liabilities and other	$	11,687		$	11,283
Other long-term liabilities	59,306			56,398
Total operating lease liabilities	$	70,993		$	67,681

Finance Leases:
Property, plant, and equipment, at cost	$	89,862		$	85,324
Accumulated depreciation	(13,256)			(10,913)
Property, plant, and equipment, net	$	76,606		$	74,411

Accrued liabilities and other	$	5,968		$	5,621
Other long-term liabilities	73,661			71,225
Total finance lease liabilities	$	79,629		$	76,846

Weighted average remaining lease term in years:
Operating leases	6.7			6.9
Finance leases	23.0			23.1

Weighted average discount rates:
Operating leases	5.2		%	5.0		%
Finance leases	6.5		%	6.5		%


	December 30, 2023
	Operating Leases		Finance Leases
2024	$	11,378	$	7,749
2025	13,772		10,150
2026	13,093		9,866
2027	11,804		9,112
2028	9,708		8,113
Thereafter	24,359		139,269
Total lease payments	84,114		184,259
Less: imputed interest	(13,121)		(104,630)
Total	$	70,993	$	79,629


	Space and Defense		Military Aircraft		Commercial Aircraft		Industrial		Total
Balance at September 30, 2023	$	259,475	$	111,276	$	92,612	$	357,938	$	821,301
Acquisition	—		2,689		—		—		2,689


Foreign currency translation	(473)		2,390		—		7,506		9,423
Balance at December 30, 2023	$	259,002	$	116,355	$	92,612	$	365,444	$	833,413


	Three Months Ended
(dollars in thousands)	December 30, 2023		December 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	47,812	$	46,016
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation	20,927		18,392
Amortization	2,720		2,992
Deferred income taxes	(4,547)		(1,342)
Equity-based compensation expense	4,165		2,974


Gain on sale of buildings	—		(9,503)

Other	(2,478)		1,145
Changes in assets and liabilities providing (using) cash:
Receivables	58,887		(27,387)
Unbilled receivables	(51,015)		(26,570)
Inventories	(46,852)		(44,435)
Accounts payable	(5,752)		(9,679)
Contract advances and progress billings	64,171		72,889
Accrued expenses	(31,814)		(35,186)
Accrued income taxes	12,324		12,632
Net pension and post retirement liabilities	2,957		3,988
Other assets and liabilities	(11,114)		1,157
Net cash provided by operating activities	60,391		8,083
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired	(5,212)		—
Purchase of property, plant and equipment	(37,416)		(30,125)
Net proceeds from businesses sold	—		1,124
Net proceeds from buildings sold	—		7,432
Other investing transactions	(479)		(3,724)
Net cash used by investing activities	(43,107)		(25,293)
CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from revolving lines of credit	279,500		241,000
Payments on revolving lines of credit	(223,000)		(160,300)

Payments on long-term debt	—		(93)


		December 30, 2023				September 30, 2023
	Weighted- Average Life (years)	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Customer-related	11	$	134,739	$	(95,943)	$	133,269	$	(93,648)
Technology-related	9	71,978		(57,381)		69,242		(56,106)
Program-related	23	38,566		(22,751)		37,465		(21,672)
Marketing-related	8	22,644		(19,386)		21,890		(18,995)
Other	10	1,842		(1,645)		1,773		(1,581)
Intangible assets	12	$	269,769	$	(197,106)	$	263,639	$	(192,002)


	2024		2025		2026		2027		2028
Estimated future amortization of acquired intangible assets	$	10,900	$	9,800	$	9,600	$	8,300	$	7,500


	December 30, 2023		September 30, 2023
Moog Aircraft Service Asia	$	1,511	$	1,302
NOVI LLC	325		325
Suffolk Technologies Fund 1, L.P.	1,257		1,180
Net investment balance	$	3,093	$	2,807


	Three Months Ended
		December 30, 2023		December 31, 2022
Acquired intangible asset amortization		$	2,725	$	2,987


	December 30, 2023		September 30, 2023
U.S. revolving credit facility	$	423,000	$	334,500
SECT revolving credit facility	1,000		33,000
Senior notes 4.25%	500,000		500,000


Senior debt	924,000		867,500
Less deferred debt issuance cost	(3,897)		(4,408)

Long-term debt	$	920,103	$	863,092


	December 30, 2023		September 30, 2023
Employee benefits	$	57,677	$	47,653
Contract reserves	54,553		45,257
Warranty accrual	24,096		22,939
Accrued income taxes	42,011		29,631
Other	60,534		66,289
Other accrued liabilities	$	238,871	$	211,769


	Balance Sheets location	December 30, 2023		September 30, 2023
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets	$	123	$	295





Foreign currency contracts	Accrued liabilities and other	$	176	$	581





Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	$	968	$	93
Foreign currency contracts	Accrued liabilities and other	$	145	$	324


	Space and Defense		Military Aircraft		Industrial		Total
Balance at October 1, 2023	$	1,622	$	347	$	8,208	$	10,177

Charged to expense - 2023 plan	—		—		1,889		1,889

Adjustments to provision	(155)		—		(11)		(166)
Cash payments - 2023 plan	(727)		(72)		(1,238)		(2,037)
Cash payments - 2022 plan	—		—		(79)		(79)

Cash payments - 2018 plan	—		—		(94)		(94)
Foreign currency translation	—		—		288		288
Balance at December 30, 2023	$	740	$	275	$	8,963	$	9,978


	Accumulated foreign currency translation		Accumulated retirement liability		Accumulated gain (loss) on derivatives		Total
AOCIL at September 30, 2023	$	(140,486)	$	(113,605)	$	(518)	$	(254,609)
OCI before reclassifications	31,040		(366)		93		30,767
Amounts reclassified from AOCIL	(27)		2,044		225		2,242
OCI, net of tax	31,013		1,678		318		33,009
AOCIL at December 30, 2023	$	(109,473)	$	(111,927)	$	(200)	$	(221,600)


		Three Months Ended
	Statements of Earnings location		December 30, 2023		December 31, 2022
Retirement liability:
Prior service cost			$	14	$	13

Actuarial losses			2,658		2,877


Reclassification from AOCIL into earnings			2,672		2,890
Tax effect			(628)		(678)
Net reclassification from AOCIL into earnings			$	2,044	$	2,212
Derivatives:
Foreign currency contracts	Sales		$	—	$	306
Foreign currency contracts	Cost of sales		295		972

Reclassification from AOCIL into earnings			295		1,278
Tax effect			(70)		(287)
Net reclassification from AOCIL into earnings			$	225	$	991


	Three Months Ended
Market Type		December 30, 2023		December 31, 2022
Net sales:
Space		$	99,610	$	95,885
Defense		130,518		121,900
Space and Defense		230,128		217,785
Original Equipment Manufacturers		141,371		132,768
Aftermarket		44,873		45,032
Military Aircraft		186,244		177,800
Original Equipment Manufacturers		129,702		80,675
Aftermarket		64,520		51,784
Commercial Aircraft		194,222		132,459
Energy		32,770		31,570
Industrial Automation		116,415		111,118
Simulation and Test		37,505		28,325
Medical		59,566		61,046
Industrial		246,256		232,059
Net sales		$	856,850	$	760,103


	Three Months Ended
Customer Type		December 30, 2023		December 31, 2022
Net sales:
Commercial		$	34,304	$	24,576
U.S. Government (including OEM)		176,402		179,435
Other		19,422		13,774
Space and Defense		230,128		217,785

U.S. Government (including OEM)		135,165		129,782
Other		51,079		48,018
Military Aircraft		186,244		177,800
Commercial		184,675		129,006

Other		9,547		3,453
Commercial Aircraft		194,222		132,459
Commercial		242,386		225,839
U.S. Government (including OEM)		2,840		1,280
Other		1,030		4,940
Industrial		246,256		232,059
Commercial		461,365		379,421
U.S. Government (including OEM)		314,407		310,497
Other		81,078		70,185
Net sales		$	856,850	$	760,103


	Three Months Ended
Revenue Recognition Method		December 30, 2023		December 31, 2022
Net sales:
Over-time		$	210,195	$	202,090
Point in time		19,933		15,695
Space and Defense		230,128		217,785
Over-time		151,956		143,290
Point in time		34,288		34,510
Military Aircraft		186,244		177,800
Over-time		142,903		103,566
Point in time		51,319		28,893
Commercial Aircraft		194,222		132,459
Over-time		31,750		33,056
Point in time		214,506		199,003
Industrial		246,256		232,059
Over-time		536,804		482,002
Point in time		320,046		278,101
Net sales		$	856,850	$	760,103


CONSOLIDATED RESULTS OF OPERATIONS

	Three Months Ended
(dollars and shares in millions, except per share data)		December 30, 2023			December 31, 2022			$ Variance		% Variance
Net sales		$	857		$	760		$	97	13	%
Gross margin		27.2		%	26.8		%
Research and development expenses		$	31		$	24		$	7	28	%
Selling, general and administrative expenses as a percentage of sales		13.9		%	14.9		%
Interest expense		$	17		$	13		$	4	27	%

Restructuring expense		$	2		$	1		$	1	75	%

Gain on sale of buildings		$	—		(10)			$	10	n/a
Other		$	3		$	2		$	1	n/a
Effective tax rate		23.6		%	23.7		%


Net earnings		$	48		$	46		$	2	4	%

Diluted earnings per share		$	1.48		$	1.44		$	0.04	3	%

Twelve-month backlog		$	2,500		$	2,300		$	200	9	%


	Three Months Ended
(dollars in millions)		December 30, 2023			December 31, 2022			$ Variance		% Variance
Net sales		$	230		$	218		$	12	6	%
Operating profit		$	25		$	20		$	5	25	%
Operating margin		11.0		%	9.3		%


							2024 vs. 2023
(dollars in millions, except per share data)	2024 Outlook			2023			$ Variance		% Variance
Net sales:
Space and Defense	$	1,015		$	947		$	68	7	%
Military Aircraft	745			720			25		3	%
Commercial Aircraft	815			669			146		22	%
Industrial	925			983			(58)		(6	%)
	$	3,500		$	3,319		$	181	5	%
Operating profit:
Space and Defense	$	137		$	96		$	41	43	%
Military Aircraft	87			60			26		43	%
Commercial Aircraft	83			84			(1)		(2	%)
Industrial	112			102			10		9	%
	$	418		$	343		$	75	22	%
Operating margin:
Space and Defense	13.5		%	10.1		%
Military Aircraft	11.6		%	8.4		%
Commercial Aircraft	10.2		%	12.6		%
Industrial	12.1		%	10.4		%
	12.0		%	10.3		%

Net earnings	$	222		$	171
Diluted earnings per share	$	6.86		$	5.34


Period	(a) Total Number of Shares Purchased (1) (2)(3)	(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 1, 2023 - October 28, 2023	6,732	$	114.38	—	2,172,081
October 29, 2023 - December 2, 2023	72,498	130.36		—	2,172,081
December 3, 2023 - December 30, 2023	17,195	143.20		—	2,172,081
Total	96,425	$	131.53	—	2,172,081


Earned PSUs:			The actual number of PSUs earned and payable will be based on achievement of performance goals and may range from 0% to 200% of the target number of PSUs awarded under this Agreement.
Vesting:			PSUs awarded under this Agreement will vest on the last day of the Performance Period specified below, subject to achievement of the Performance Goals set forth in this Appendix A.
Performance Period:			The 3-year fiscal period beginning on [___________] and ending on [___________].
Manner of Payment:			Shares of Class B Common Stock.