MOGB Vaneck Esg Moat

Reiterates full year adjusted 2023 earnings per share guidance

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 second quarter 2023 diluted earnings per share of $1.34 and adjusted diluted earnings per share of $1.42.

(in millions, except per share results)

 

 

 

 

Q2 2023

Q2 2022

Deltas

Net sales

$

837

 

$

771

 

 

9

%

Operating margin

 

10.0

%

 

7.4

%

260 bps

Adjusted operating margin

 

10.4

%

 

10.6

%

-20 bps

Diluted net earnings per share

$

1.34

 

$

0.91

 

 

47

%

Adjusted diluted net earnings per share

$

1.42

 

$

1.49

 

 

(5

) %

Adjusted free cash flow

$

(101

)

$

(24

)

$

(76

)

See the reconciliations of adjusted financial results to reported results included in the financial statements herein for the quarters ended April 1, 2023 and April 2, 2022.

Quarter Highlights

• Net sales were $837 million, an increase of 9% compared to the second quarter from a year ago, with increases across all three reporting segments. Excluding divestitures and foreign exchange impacts, sales increased 11%.

• Adjusted operating margin of 10.4% was relatively unchanged from a year ago. Stronger operational performance was offset by several program charges and an unfavorable sales mix.

• Adjusted diluted earnings per share decreased 5%, as $7 million of higher interest expense was partially offset by increased operating profit.

• Adjusted free cash flow use in the second quarter of $101 million was driven by working capital consumption and elevated capital expenditures.

"Our sales were remarkable this quarter, a proud record for our company," said Pat Roche, CEO. "Adjusted operating margin performance through the first half of the year was better than prior year and will be stronger in the second half of FY23. We took a big step in our simplification journey by moving away from a matrixed structure in Aircraft Controls towards two separate businesses. This change will drive greater clarity and performance.”

Segment Results

Aircraft Controls sales in the second quarter of 2023 increased 11%. Sales for commercial OEM programs increased significantly, up 56%, driven by market recovery in widebody aircraft and business jet activity. Commercial aftermarket increased 21% due to higher spares volume. Military OEM sales were down 5% reflecting lower funded development activity. Military aftermarket was down 18% compared to a very strong quarter a year ago. Adjusted operating margin was 9.5%, a 50 basis-point decrease, the result of an unfavorable sales mix in the quarter.

Space and Defense Controls sales increased 10% in the second quarter of 2023, mostly driven by increased activity in the avionics business and the ramp to full-rate production for the reconfigurable turret. Adjusting for the divestiture of the security business last year, segment sales increased 12%. Adjusted operating margin was 11.7%, 10 basis points higher than last year’s second quarter. Benefits associated with higher sales and improvements in the core business were mostly offset by additional charges on our space vehicle development programs.

Industrial Systems sales increased 3%. Excluding foreign currency movements and last year’s sonar business divestiture, sales increased 8%. The underlying sales growth was related to continued recovery in industrial automation products. Sales of medical products were mostly unchanged while simulation and test products were lower on order timing. Adjusting for last year’s divestiture, energy sales were unchanged. Adjusted operating margin of 10.4% decreased 10 basis points, reflecting operational charges taken in the quarter, offset by incremental sales volume.

Free Cash Flow Results

Adjusted free cash flow in the second quarter was a use of cash of $101 million. Capital expenditures were $60 million in the quarter and included $28 million for the purchase of a building to support business growth. Working capital pressure was tied to receivables growth associated with higher sales, supply chain constraints, and the work-down of customer advances for defense programs.

2023 Financial Guidance

“We are increasing our sales guidance slightly to $3.2 billion," said Jennifer Walter, CFO. "In addition, we are reiterating our fiscal year 2023 guidance for the company’s adjusted operating margin and adjusted earnings per share. Overall, we had a good first half of the year and our outlook for the rest of the year looks strong."

(in millions, except per share results)

 

 

 

FY 2023 Guidance

 

Current

Previous

Net sales

$

3,190

 

$

3,175

 

Operating margin

 

11.1

%

 

11.2

%

Adjusted operating margin

 

11.0

%

 

11.0

%

Diluted net earnings per share

$

5.81

 

$

5.89

 

Adjusted diluted net earnings per share

$

5.70

 

$

5.70

 

Free cash flow

$

—

 

$

100

 

Earnings per share figures are forecasted to be within range of +/- $0.20.

 

 

Free cash flow guidance is now zero. This change reflects an increase in working capital requirements largely due to the second quarter pressures, and investments to support the business.

In conjunction with today’s release, Moog Inc. will host a conference call today beginning at 10:00 a.m. ET, which will be broadcast live over the Internet. Pat Roche, CEO, and Jennifer Walter, CFO, will host the call. Listeners can access the call live or in replay mode at www.moog.com/investors/communications. Supplemental financial data will be available on the webcast web page 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

• We operate in highly competitive markets with competitors who may have greater resources than we possess;
• Our research and development and innovation efforts are substantial and may not be successful, which could reduce our sales and earnings;
• If we are unable to adequately enforce and protect our intellectual property or defend against assertions of infringement, our business and our ability to compete could be harmed; and
• Our sales and earnings may be affected if we cannot identify, acquire or integrate strategic acquisitions, or as we conduct divestitures.

Market condition risks

• 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 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;
• The loss of The Boeing Company or Lockheed Martin as a customer or a significant reduction in sales to either company could adversely impact our operating results; and
• We may not realize the full amounts reflected in our backlog as revenue, which could adversely affect our future revenue and growth prospects.

Operational risks

• A reduced supply, as well as inflated prices, across various raw materials and third-party provided components and sub-assemblies within our supply chain could have a material impact on our ability to manufacture and ship our products, in addition to adversely impacting our operating profit and balance sheet;
• We face various risks related to health pandemics, such as the COVID-19 pandemic, which have had material adverse consequences on our operations, financial position, cash flows, and those of our customers and suppliers;
• 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;
• We face, and may continue to face, risks related to information systems interruptions, intrusions or new software implementations, which may adversely affect our business operations;
• We may not be able to prevent, or timely detect, issues with our products and our manufacturing processes, which may adversely affect our operations and our earnings; and
• 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.

Financial risks

• We make estimates in accounting for over-time 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;
• Our indebtedness and restrictive covenants under our credit facilities and indenture governing our senior notes 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; and
• Unforeseen exposure to additional income tax liabilities may affect our operating results.

Legal and compliance risks

• Contracting on government programs is subject to significant regulation, including rules related to bidding, billing and accounting standards, and any false claims or non-compliance could subject us to fines, penalties or possible debarment;
• Our operations in foreign countries expose us to currency, political and trade risks and adverse changes in local legal and regulatory environments could impact our results of operations;
• Government regulations could limit our ability to sell our products outside the United States and otherwise adversely affect our business;
• We are involved in various legal proceedings, the outcome of which may be unfavorable to us;
• Our operations are subject to environmental laws and complying with those laws may cause us to incur significant costs; and
• We may face reputational, regulatory or financial risks from a perceived, or an actual, failure to achieve our sustainability goals.

General risks

• Future terror attacks, war, natural disasters or other catastrophic events beyond our control could negatively impact our business; and
• Our performance could suffer if we cannot maintain our culture as well as attract, retain and engage our employees.

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

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

 

April 1, 2023

 

April 2, 2022

Net sales

 

$

836,792

 

 

$

770,787

 

$

1,596,895

 

 

$

1,494,873

 

Cost of sales

 

 

615,477

 

 

 

556,070

 

 

1,171,894

 

 

 

1,085,776

 

Inventory write-down

 

 

—

 

 

 

1,705

 

 

—

 

 

 

3,205

 

Gross profit

 

 

221,315

 

 

 

213,012

 

 

425,001

 

 

 

405,892

 

Research and development

 

 

26,743

 

 

 

30,720

 

 

50,605

 

 

 

58,428

 

Selling, general and administrative

 

 

116,695

 

 

 

111,019

 

 

229,860

 

 

 

222,816

 

Interest

 

 

14,963

 

 

 

8,263

 

 

28,095

 

 

 

16,245

 

Asset impairment

 

 

1,219

 

 

 

15,236

 

 

1,219

 

 

 

15,236

 

Restructuring

 

 

2,017

 

 

 

7,793

 

 

3,095

 

 

 

7,793

 

Gain on sale of businesses

 

 

—

 

 

 

—

 

 

—

 

 

 

(16,146

)

Gain on sale of buildings

 

 

(527

)

 

 

—

 

 

(10,030

)

 

 

—

 

Other

 

 

3,901

 

 

 

1,268

 

 

5,552

 

 

 

1,384

 

Earnings before income taxes

 

 

56,304

 

 

 

38,713

 

 

116,605

 

 

 

100,136

 

Income taxes

 

 

13,291

 

 

 

9,626

 

 

27,576

 

 

 

24,784

 

Net earnings

 

$

43,013

 

 

$

29,087

 

$

89,029

 

 

$

75,352

 

 

 

 

 

 

 

 

 

 

Net earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

1.35

 

 

$

0.91

 

$

2.80

 

 

$

2.35

 

Diluted

 

$

1.34

 

 

$

0.91

 

$

2.79

 

 

$

2.34

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

31,848,140

 

 

 

31,984,674

 

 

31,797,071

 

 

 

32,021,036

 

Diluted

 

 

32,043,910

 

 

 

32,120,726

 

 

31,959,315

 

 

 

32,154,442

 

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

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

 

April 1, 2023

 

April 2, 2022

As Reported:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

56,304

 

 

$

38,713

 

 

$

116,605

 

 

$

100,136

 

Income taxes

 

 

13,291

 

 

 

9,626

 

 

 

27,576

 

 

 

24,784

 

Effective income tax rate

 

 

23.6

%

 

 

24.9

%

 

 

23.6

%

 

 

24.8

%

Net earnings

 

 

43,013

 

 

 

29,087

 

 

 

89,029

 

 

 

75,352

 

Diluted net earnings per share

 

$

1.34

 

 

$

0.91

 

 

$

2.79

 

 

$

2.34

 

 

 

 

 

 

 

 

 

 

Loss (Gain) on Sale of Business:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(16,146

)

Income taxes

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,273

)

Net earnings

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(11,873

)

Diluted net earnings per share

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(0.37

)

 

 

 

 

 

 

 

 

 

Loss (Gain) on Sale of Buildings:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

(527

)

 

$

—

 

 

$

(10,030

)

 

$

—

 

Income taxes

 

 

(100

)

 

 

—

 

 

 

(2,086

)

 

 

—

 

Net earnings

 

 

(427

)

 

 

—

 

 

 

(7,944

)

 

 

—

 

Diluted net earnings per share

 

$

(0.01

)

 

$

—

 

 

$

(0.25

)

 

$

—

 

 

 

 

 

 

 

 

 

 

Other Charges:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

3,830

 

 

$

24,734

 

 

$

5,363

 

 

$

26,234

 

Income taxes

 

 

926

 

 

 

5,883

 

 

 

1,200

 

 

 

6,237

 

Net earnings

 

 

2,904

 

 

 

18,851

 

 

 

4,163

 

 

 

19,997

 

Diluted net earnings per share

 

$

0.09

 

 

$

0.59

 

 

$

0.13

 

 

$

0.62

 

 

 

 

 

 

 

 

 

 

As Adjusted:

 

 

 

 

 

 

 

 

Earnings before income taxes

 

$

59,607

 

 

$

63,447

 

 

$

111,938

 

 

$

110,224

 

Income taxes

 

 

14,117

 

 

 

15,509

 

 

 

26,690

 

 

 

26,748

 

Effective income tax rate

 

 

23.7

%

 

 

24.4

%

 

 

23.8

%

 

 

24.3

%

Net earnings

 

 

45,490

 

 

 

47,938

 

 

 

85,248

 

 

 

83,476

 

Diluted net earnings per share

 

$

1.42

 

 

$

1.49

 

 

$

2.67

 

 

$

2.60

 

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 the NavAids business in Aircraft Controls, sale of buildings formerly used in Industrial Systems, as well as, restructuring, inventory write-downs 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

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

 

April 1, 2023

 

April 2, 2022

Net sales:

 

 

 

 

 

 

 

 

Aircraft Controls

 

$

347,004

 

 

$

311,268

 

 

$

657,263

 

 

$

614,585

 

Space and Defense Controls

 

 

245,853

 

 

 

223,349

 

 

 

463,638

 

 

 

431,205

 

Industrial Systems

 

 

243,935

 

 

 

236,170

 

 

 

475,994

 

 

 

449,083

 

Net sales

 

$

836,792

 

 

$

770,787

 

 

$

1,596,895

 

 

$

1,494,873

 

Operating profit:

 

 

 

 

 

 

 

 

Aircraft Controls

 

$

31,862

 

 

$

12,441

 

 

$

61,580

 

 

$

54,356

 

 

 

 

9.2

%

 

 

4.0

%

 

 

9.4

%

 

 

8.8

%

Space and Defense Controls

 

 

27,507

 

 

 

24,075

 

 

 

47,801

 

 

 

45,374

 

 

 

 

11.2

%

 

 

10.8

%

 

 

10.3

%

 

 

10.5

%

Industrial Systems

 

 

24,397

 

 

 

20,723

 

 

 

61,148

 

 

 

37,914

 

 

 

 

10.0

%

 

 

8.8

%

 

 

12.8

%

 

 

8.4

%

Total operating profit

 

 

83,766

 

 

 

57,239

 

 

 

170,529

 

 

 

137,644

 

 

 

 

10.0

%

 

 

7.4

%

 

 

10.7

%

 

 

9.2

%

Deductions from operating profit:

 

 

 

 

 

 

 

 

Interest expense

 

 

14,963

 

 

 

8,263

 

 

 

28,095

 

 

 

16,245

 

Equity-based compensation expense

 

 

2,791

 

 

 

1,920

 

 

 

5,765

 

 

 

4,578

 

Non-service pension expense

 

 

3,115

 

 

 

1,472

 

 

 

6,214

 

 

 

2,957

 

Corporate and other expenses, net

 

 

6,593

 

 

 

6,871

 

 

 

13,850

 

 

 

13,728

 

Earnings before income taxes

 

$

56,304

 

 

$

38,713

 

 

$

116,605

 

 

$

100,136

 

Moog Inc.

RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)

(dollars in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

 

April 1, 2023

 

April 2, 2022

Aircraft Controls operating profit - as reported

 

$

31,862

 

 

$

12,441

 

 

$

61,580

 

 

$

54,356

 

Gain on sale of business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(16,146

)

Restructuring and other

 

 

1,000

 

 

 

18,826

 

 

 

1,000

 

 

 

18,826

 

Aircraft Controls operating profit - as adjusted

 

$

32,862

 

 

$

31,267

 

 

$

62,580

 

 

$

57,036

 

 

 

 

9.5

%

 

 

10.0

%

 

 

9.5

%

 

 

9.3

%

 

 

 

 

 

 

 

 

 

Space and Defense Controls operating profit - as reported

 

$

27,507

 

 

$

24,075

 

 

$

47,801

 

 

$

45,374

 

Inventory write-down

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,500

 

Restructuring and other

 

 

1,324

 

 

 

1,837

 

 

 

1,500

 

 

 

1,837

 

Space and Defense Controls operating profit - as adjusted

 

$

28,831

 

 

$

25,912

 

 

$

49,301

 

 

$

48,711

 

 

 

 

11.7

%

 

 

11.6

%

 

 

10.6

%

 

 

11.3

%

 

 

 

 

 

 

 

 

 

Industrial Systems operating profit - as reported

 

$

24,397

 

 

$

20,723

 

 

$

61,148

 

 

$

37,914

 

Inventory write-down

 

 

—

 

 

 

1,705

 

 

 

—

 

 

 

1,705

 

Gain on sale of buildings

 

 

(527

)

 

 

—

 

 

 

(10,030

)

 

 

—

 

Restructuring and other

 

 

1,506

 

 

 

2,366

 

 

 

2,863

 

 

 

2,366

 

Industrial Systems operating profit - as adjusted

 

$

25,376

 

 

$

24,794

 

 

$

53,981

 

 

$

41,985

 

 

 

 

10.4

%

 

 

10.5

%

 

 

11.3

%

 

 

9.3

%

 

 

 

 

 

 

 

 

 

Total operating profit - as adjusted

 

$

87,069

 

 

$

81,973

 

 

$

165,862

 

 

$

147,732

 

 

 

 

10.4

%

 

 

10.6

%

 

 

10.4

%

 

 

9.9

%

Moog Inc.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

 

 

 

April 1, 2023

 

October 1, 2022

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

107,012

 

 

$

103,895

 

Restricted cash

 

 

2,642

 

 

 

15,338

 

Receivables, net

 

 

1,079,980

 

 

 

990,262

 

Inventories, net

 

 

679,045

 

 

 

588,466

 

Prepaid expenses and other current assets

 

 

64,501

 

 

 

60,349

 

Total current assets

 

 

1,933,180

 

 

 

1,758,310

 

Property, plant and equipment, net

 

 

737,599

 

 

 

668,908

 

Operating lease right-of-use assets

 

 

62,569

 

 

 

69,072

 

Goodwill

 

 

826,498

 

 

 

805,320

 

Intangible assets, net

 

 

82,421

 

 

 

85,410

 

Deferred income taxes

 

 

9,327

 

 

 

8,630

 

Other assets

 

 

48,015

 

 

 

36,191

 

Total assets

 

$

3,699,609

 

 

$

3,431,841

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Current installments of long-term debt

 

$

728

 

 

$

916

 

Accounts payable

 

 

238,603

 

 

 

232,104

 

Accrued compensation

 

 

73,999

 

 

 

93,141

 

Contract advances

 

 

317,253

 

 

 

296,899

 

Accrued liabilities and other

 

 

212,267

 

 

 

215,376

 

Total current liabilities

 

 

842,850

 

 

 

838,436

 

Long-term debt, excluding current installments

 

 

958,414

 

 

 

836,872

 

Long-term pension and retirement obligations

 

 

148,693

 

 

 

140,602

 

Deferred income taxes

 

 

58,080

 

 

 

63,527

 

Other long-term liabilities

 

 

111,795

 

 

 

115,591

 

Total liabilities

 

 

2,119,832

 

 

 

1,995,028

 

Shareholders’ equity

 

 

 

 

Common stock - Class A

 

 

43,807

 

 

 

43,807

 

Common stock - Class B

 

 

7,473

 

 

 

7,473

 

Additional paid-in capital

 

 

576,506

 

 

 

516,123

 

Retained earnings

 

 

2,432,225

 

 

 

2,360,055

 

Treasury shares

 

 

(1,056,187

)

 

 

(1,047,012

)

Stock Employee Compensation Trust

 

 

(99,880

)

 

 

(73,602

)

Supplemental Retirement Plan Trust

 

 

(81,634

)

 

 

(58,989

)

Accumulated other comprehensive loss

 

 

(242,533

)

 

 

(311,042

)

Total shareholders’ equity

 

 

1,579,777

 

 

 

1,436,813

 

Total liabilities and shareholders’ equity

 

$

3,699,609

 

 

$

3,431,841

 

Moog Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

 

 

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net earnings

 

$

89,029

 

 

$

75,352

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

Depreciation

 

 

36,810

 

 

 

38,316

 

Amortization

 

 

5,862

 

 

 

6,735

 

Deferred income taxes

 

 

(9,970

)

 

 

4,834

 

Equity-based compensation expense

 

 

5,765

 

 

 

4,578

 

Gain on sale of business

 

 

—

 

 

 

(16,146

)

Gain on sale of buildings

 

 

(10,030

)

 

 

—

 

Asset impairment and inventory write-down

 

 

1,219

 

 

 

18,441

 

Other

 

 

3,292

 

 

 

2,692

 

Changes in assets and liabilities providing (using) cash:

 

 

 

 

Receivables

 

 

(76,676

)

 

 

(4,223

)

Inventories

 

 

(72,346

)

 

 

6,951

 

Accounts payable

 

 

1,971

 

 

 

24,388

 

Contract advances

 

 

17,067

 

 

 

60,392

 

Accrued expenses

 

 

(33,030

)

 

 

(28,324

)

Accrued income taxes

 

 

11,965

 

 

 

8,217

 

Net pension and post retirement liabilities

 

 

7,119

 

 

 

8,927

 

Other assets and liabilities

 

 

(11,063

)

 

 

(30,933

)

Net cash provided (used) by operating activities

 

 

(33,016

)

 

 

180,197

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

—

 

 

 

(11,837

)

Purchase of property, plant and equipment

 

 

(89,743

)

 

 

(74,087

)

Net proceeds from businesses sold

 

 

959

 

 

 

38,611

 

Net proceeds from buildings sold

 

 

18,825

 

 

 

—

 

Other investing transactions

 

 

(4,241

)

 

 

(835

)

Net cash used by investing activities

 

 

(74,200

)

 

 

(48,148

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from revolving lines of credit

 

 

503,232

 

 

 

463,950

 

Payments on revolving lines of credit

 

 

(381,300

)

 

 

(455,476

)

Payments on long-term debt

 

 

(188

)

 

 

(80,181

)

Payments on finance lease obligations

 

 

(1,899

)

 

 

(1,085

)

Payment of dividends

 

 

(16,859

)

 

 

(16,351

)

Proceeds from sale of treasury stock

 

 

9,148

 

 

 

8,701

 

Purchase of outstanding shares for treasury

 

 

(20,457

)

 

 

(26,481

)

Proceeds from sale of stock held by SECT

 

 

9,795

 

 

 

7,574

 

Purchase of stock held by SECT

 

 

(7,221

)

 

 

(10,396

)

Other financing transactions

 

 

(2,024

)

 

 

—

 

Net cash provided (used) by financing activities

 

 

92,227

 

 

 

(109,745

)

Effect of exchange rate changes on cash

 

 

5,410

 

 

 

(1,087

)

Increase (decrease) in cash, cash equivalents and restricted cash

 

 

(9,579

)

 

 

21,217

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

119,233

 

 

 

100,914

 

Cash, cash equivalents and restricted cash at end of period

 

$

109,654

 

 

$

122,131

 

Moog Inc.

RECONCILIATION OF NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES TO FREE CASH FLOW AND ADJUSTED FREE CASH FLOW (UNAUDITED)

(dollars in thousands)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

April 1, 2023

 

April 2, 2022

 

April 1, 2023

 

April 2, 2022

Net cash provided (used) by operating activities

 

$

(41,099

)

 

$

23,012

 

 

$

(33,016

)

 

$

180,197

 

Purchase of property, plant and equipment

 

 

(59,618

)

 

 

(37,028

)

 

 

(89,743

)

 

 

(74,087

)

Free cash flow

 

 

(100,717

)

 

 

(14,016

)

 

 

(122,759

)

 

 

106,110

 

Securitization

 

 

—

 

 

 

(10,400

)

 

 

—

 

 

 

(100,000

)

Adjusted free cash flow

 

$

(100,717

)

 

$

(24,416

)

 

$

(122,759

)

 

$

6,110

 

Amounts may not reconcile when totaled due to rounding.

Free cash flow is defined as net cash provided (used) 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.

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