Moog Reports Third Quarter Results EAST AURORA,

EAST AURORA, NY--(Marketwired - Jul 29, 2016) -  Moog Inc. ( NYSE : MOG.A ) ( NYSE : MOG.B ) announced today third quarter earnings per share of $1.00, up 6% from a year ago on slightly lower sales of $613 million. Cash flow from operating activities was strong in the quarter, at $82 million, while net earnings were flat at $36 million.

Total Aircraft Controls sales in the quarter were $274 million, up 1% from a year ago. Commercial aircraft sales of $140 million were up 8%. Sales of OEM products to Airbus increased 45%, to $28 million, on the A350 production ramp up. Boeing OEM product sales were 13% higher, at $66 million, on increased sales across all platforms. Commercial aftermarket revenues of $27 million were down 12% due to lower initial provisioning of 787 spares and softer business jet activity. 

Military aircraft sales of $134 million were 5% lower year over year. OEM sales were down 6%, to $84 million, due to declines in V-22 tilt rotor and Black Hawk helicopter sales. F-35 production sales were 7% higher. Military aftermarket sales were down 4%, to $50 million, as the C-5M Super Galaxy upgrade program winds down. F-35 aftermarket sales were higher on increased depot repair activity.

Space and Defense segment sales were $91 million, 5% lower than last year. Space sales were $44 million, a decrease of 8% due to lower sales of avionics and components. Defense sales were $47 million, down marginally due to slower military vehicle sales.

Sales in the Company's Industrial Systems segment were flat at $130 million. Energy market sales were 8% higher, at $33 million, helped by higher sales of wind energy products into Europe and China. Industrial automation sales were $69 million, off 3%. Simulation and test product sales were $28 million, also off 3%, reflecting strong prior year sales of test equipment.

Components segment sales, at $92 million, were 18% lower than last year. Sales of aerospace and defense products were $42 million, down 14%, on softer OEM program and aftermarket sales. Sales into energy, industrial and medical markets continued to experience weakness across a range of products and programs.

The Medical Devices segment had sales of $26 million, up 1%, on increased sales of enteral pumps and administration sets. Through the first nine months of the year, excluding the previously divested life sciences business, organic growth in the segment is 8% year over year.

The current backlog is $1.2 billion. 

The Company updated its projections for fiscal 2016, ending October 1, 2016, to include sales of $2.42 billion. The earnings per share midpoint is unchanged, at $3.35, and the range has been narrowed to plus or minus $.10 per share. 

"Overall we had a good third quarter," said John Scannell, Chairman and CEO. "Sales were slightly down but EPS was ahead of our guidance and we had strong cash flow. In addition, our aircraft team celebrated the flawless operation of our flight controls as part of the successful first flight of the Embraer E2 jet. With one quarter left to go, we're refining our sales forecast for the year, while keeping our EPS forecast unchanged from 90 days ago."

In conjunction with today's release, Moog will host a conference call beginning at 10:00 a.m. ET, which will be broadcast live over the Internet. John Scannell, Chairman and CEO, and Don Fishback, CFO, will host the call. Supplemental financial data will be available on the webcast web page approximately 60 minutes prior to the conference call. Listeners can access the call live or in replay mode at www.moog.com/investors/communications .

Moog Inc. is a worldwide designer, manufacturer, and integrator of precision control components and systems. Moog's high-performance systems control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles, automated industrial machinery, wind energy, marine and medical equipment. Additional information about the Company can be found at www.moog.com .

Cautionary Statement

Information included or incorporated by reference in this report that does not consist of historical facts, including statements accompanied by or containing words such as "may," "will," "should," "believes," "expects," "expected," "intends," "plans," "projects," "approximate," "estimates," "predicts," "potential," "outlook," "forecast," "anticipates," "presume" and "assume," are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. These important factors, risks and uncertainties include:

• the markets we serve are cyclical and sensitive to domestic and foreign economic conditions and events, which may cause our operating results to fluctuate;
• we operate in highly competitive markets with competitors who may have greater resources than we possess;
• we depend heavily on government contracts that may not be fully funded or may be terminated, and the failure to receive funding or the termination of one or more of these contracts could reduce our sales and increase our costs;
• we make estimates in accounting for long-term contracts, and changes in these estimates may have significant impacts on our earnings;
• we enter into fixed-price contracts, which could subject us to losses if we have cost overruns;
• 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.

These factors are not exhaustive. New factors, risks and uncertainties may emerge from time to time that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. We disclaim any obligation to update the forward-looking statements made in this report.

Moog Inc.

CONSOLIDATED STATEMENTS OF EARNINGS

(dollars in thousands, except per share data)

			Three Months Ended							Nine Months Ended
			July 2,  2016				July 4,  2015			July 2,  2016				July 4,  2015
Net sales			$	613,260			$	634,539		$	1,792,859			$	1,902,308
Cost of sales				429,598				443,963			1,268,550				1,354,264
Gross profit				183,662				190,576			524,309				548,044
	Research and development			36,006				34,157			110,535				96,882
	Selling, general and administrative			88,553				90,733			254,318				280,718
	Interest			8,662				7,916			25,919				20,953
	Restructuring			(39	)			6,604			8,303				6,604
	Other			(1,082	)			442			(2,600	)			1,327
Earnings before income taxes				51,562				50,724			127,834				141,560
Income taxes				15,916				14,393			35,121				37,871
Net earnings attributable to common shareholders and noncontrolling interest			$	35,646			$	36,331		$	92,713			$	103,689
Net earnings (loss) attributable to noncontrolling interest				(665	)			--			(889	)			--
Net earnings attributable to common shareholders			$	36,311			$	36,331		$	93,602			$	103,689
Net earnings per share attributable to common shareholders
	Basic		$	1.01			$	0.95		$	2.57			$	2.62
	Diluted		$	1.00			$	0.94		$	2.55			$	2.59
Average common shares outstanding
	Basic			36,038,340				38,389,629			36,411,428				39,555,423
	Diluted			36,267,975				38,744,620			36,663,165				39,963,142

Moog Inc.

CONSOLIDATED SALES AND OPERATING PROFIT

(dollars in thousands)

			Three Months Ended								Nine Months Ended
			July 2,  2016				July 4,  2015				July 2,  2016				July 4,  2015
Net sales:
	Aircraft Controls		$	274,175			$	270,339			$	804,779			$	811,103
	Space and Defense Controls			90,764				95,266				262,579				288,477
	Industrial Systems			130,103				130,581				383,526				393,092
	Components			92,285				112,630				265,673				335,396
	Medical Devices			25,933				25,723				76,302				74,240
Net sales			$	613,260			$	634,539			$	1,792,859			$	1,902,308
Operating profit:
	Aircraft Controls		$	30,532			$	28,401			$	67,705			$	75,195
				11.1	%			10.5	%			8.4	%			9.3	%
	Space and Defense Controls			13,747				6,149				38,920				19,784
				15.1	%			6.5	%			14.8	%			6.9	%
	Industrial Systems			11,534				13,068				38,437				38,972
				8.9	%			10.0	%			10.0	%			9.9	%
	Components			10,754				14,966				23,839				47,828
				11.7	%			13.3	%			9.0	%			14.3	%
	Medical Devices			2,182				3,506				8,015				6,558
				8.4	%			13.6	%			10.5	%			8.8	%
Total operating profit				68,749				66,090				176,916				188,337
				11.2	%			10.4	%			9.9	%			9.9	%
Deductions from operating profit:
	Interest expense			8,662				7,916				25,919				20,953
	Equity-based compensation expense			875				603				2,794				4,569
	Corporate and other expenses, net			7,650				6,847				20,369				21,255
Earnings before income taxes			$	51,562			$	50,724			$	127,834			$	141,560

Moog Inc.

CONSOLIDATED BALANCE SHEETS

(dollars in thousands)

				July 2,  2016			October 3,  2015
ASSETS
Current assets
	Cash and cash equivalents			$	394,429		$	309,853
	Receivables				647,987			698,419
	Inventories				500,734			493,360
	Deferred income taxes				93,121			91,210
	Prepaid expenses and other current assets				36,415			34,653
		Total current assets			1,672,686			1,627,495
Property, plant and equipment, net					518,233			536,756
Goodwill					746,590			737,212
Intangible assets, net					119,284			143,723
Other assets					43,932			41,285
Total assets				$	3,100,725		$	3,086,471
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
	Short-term borrowings			$	1,377		$	83
	Current installments of long-term debt				184			34
	Accounts payable				150,091			165,973
	Accrued salaries, wages and commissions				124,898			125,270
	Customer advances				174,700			167,423
	Contract loss reserves				31,413			30,422
	Other accrued liabilities				102,432			116,300
		Total current liabilities			585,095			605,505
Long-term debt, excluding current installments					1,108,438			1,075,067
Long-term pension and retirement obligations					288,732			348,239
Deferred income taxes					77,803			60,209
Other long-term liabilities					3,107			2,919
		Total liabilities			2,063,175			2,091,939
Commitment and contingencies					--			--
Redeemable noncontrolling interest					7,875			--
Shareholders' equity
	Common stock				51,280			51,280
	Other shareholders' equity				978,395			943,252
		Total shareholders' equity			1,029,675			994,532
Total liabilities and shareholders' equity				$	3,100,725		$	3,086,471

Moog Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
					Nine Months Ended
					July 2,  2016				July 4,  2015
CASH FLOWS FROM OPERATING ACTIVITIES
	Net earnings attributable to common shareholders and noncontrolling interest				$	92,713			$	103,689
	Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
		Depreciation				58,674				59,468
		Amortization				16,485				19,010
		Deferred income taxes				7,765				14,569
		Equity-based compensation expense				2,794				4,569
		Other				6,967				4,212
	Changes in assets and liabilities providing (using) cash:
		Receivables				43,214				51,547
		Inventories				(9,959	)			(4,763	)
		Accounts payable				(16,456	)			7,332
		Customer advances				9,689				(5,008	)
		Accrued expenses				(7,106	)			(21,182	)
		Accrued income taxes				686				(8,205	)
		Net pension and post retirement liabilities				(38,828	)			(23,817	)
		Other assets and liabilities				(5,858	)			5,407
			Net cash provided by operating activities			160,780				206,828
CASH FLOWS FROM INVESTING ACTIVITIES
	Acquisitions of businesses, net of cash acquired					(11,016	)			--
	Purchase of property, plant and equipment					(42,605	)			(57,712	)
	Other investing transactions					1,164				12,597
			Net cash used by investing activities			(52,457	)			(45,115	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Net short-term repayments					--				(3,337	)
	Proceeds from revolving lines of credit					274,670				335,185
	Payments on revolving lines of credit					(261,570	)			(425,185	)
	Proceeds from long-term debt					20,000				--
	Payments on long-term debt					(10,047	)			(5,250	)
	Proceeds from senior notes, net of issuance costs					--				294,430
	Proceeds from sale of treasury stock					2,229				11,437
	Purchase of outstanding shares for treasury					(42,203	)			(297,417	)
	Proceeds from sale of stock held by SECT					2,897				7,328
	Purchase of stock held by SECT					(1,634	)			(12,121	)
	Purchase of stock held by SERP Trust					(2,300	)			(7,328	)
	Excess tax benefits from equity-based payment arrangements					442				5,973
	Other financing transactions					(1,909	)			--
			Net cash used by financing activities			(19,425	)			(96,285	)
Effect of exchange rate changes on cash						(4,322	)			(19,276	)
Increase in cash and cash equivalents						84,576				46,152
	Cash and cash equivalents at beginning of period					309,853				231,292
	Cash and cash equivalents at end of period				$	394,429			$	277,444