MOG.B Moog Inc

Moog Inc. (NYSE: MOG.A and MOG.B), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal first quarter 2025 diluted earnings per share of $1.64 and adjusted diluted earnings per share of $1.78, which includes an out-of-period warranty expense.

(in millions, except per share results)

Three Months Ended

 

Q1 2025

Q1 2024

Deltas

Net sales

$

910

 

$

857

 

 

6

%

Operating margin(1)

 

11.1

%

 

11.0

%

10 bps

Adjusted operating margin(1)

 

11.8

%

 

11.3

%

50 bps

Diluted net earnings per share(2)

$

1.64

 

$

1.48

 

 

11

%

Adjusted diluted net earnings per share(2)

$

1.78

 

$

1.53

 

 

16

%

Net cash provided (used) by operating activities

$

(132

)

$

60

 

$

(193

)

Free cash flow

$

(165

)

$

(2

)

$

(163

)

See the reconciliations of adjusted financial results and free cash flow to reported results included in the financial statements herein for the periods ended December 28, 2024 and December 30, 2023.

(1) Q1 2025 includes 80 basis points for an out-of-period warranty expense.

(2) Q1 2025 includes $0.18 for an out-of-period warranty expense.

Quarter Highlights

• Net sales increased due to growth in aerospace and defense businesses, while sales declined in the Industrial segment, in part due to divestitures.
• Operating margin increased due to benefits of simplification initiatives and improved operations, mostly offset by higher restructuring and other charges. Adjusted operating margin, excluding these charges, expanded across all of our segments.
• Commercial Aircraft operating profit includes an $8 million out-of-period warranty expense.
• Diluted earnings per share increased due to the incremental operating profit from higher sales.
• Adjusted diluted earnings per share increased due to the incremental operating profit from both higher sales and margin enhancement across all of our segments.
• Free cash flow use was driven by working capital requirements.
• Bookings of $1.3 billion were driven by record orders in Space and Defense and strong orders in Commercial Aircraft.
• Twelve-month backlog remained steady at $2.5 billion, as growth in Space and Defense was offset by declines in Industrial due to the impact of the divestitures and weaker foreign currencies.

"We have delivered a great quarter with strong sales growth, impressive bookings and solid margin enhancement," said Pat Roche, CEO. "We are delivering value for our customers and are being rewarded with significant program wins. Our operational initiatives will deliver continued margin enhancement and strong free cash flow in the second half of 2025."

Segment Results

Sales in the first quarter of 2025 increased compared to the first quarter of 2024, driven by defense growth in Space and Defense and in Military Aircraft, and by aftermarket demand in Commercial Aircraft. These increases were partially offset by a sales decline in Industrial. Space and Defense sales increased 8% to $248 million, supported by broad-based demand. Military Aircraft sales increased 15% to $213 million, driven by the ramp-up of activity on the FLRAA program and new production programs. Commercial Aircraft sales increased 14% to $221 million, reflecting strong repair activity and initial provisioning of spares. Industrial sales decreased 7% to $228 million, half due to the lost sales associated with our portfolio shaping activities.

Operating margin increased 10 basis points to 11.1% in the first quarter of 2025 compared to the first quarter of 2024. Space and Defense operating margin increased 50 basis points to 11.5% due to sales growth, partially offset by investments to prepare for upcoming major programs. Military Aircraft operating margin increased 20 basis points to 10.7%, driven by increased activity on the FLRAA program and lower research and development expenses, partially offset by an unfavorable sales mix. Commercial Aircraft operating margin increased 40 basis points to 11.0%, driven by higher levels of aftermarket sales, offset by a 340 basis-point out-of-period warranty expense. Excluding this warranty expense, Commercial Aircraft operating margin would have been 14.4% in the first quarter of 2025. Industrial operating margin decreased 60 basis points to 11.2%, due to restructuring and other charges.

Adjusted operating margin excludes $6 million and $2 million in restructuring and other charges in the first quarter of 2025 and 2024, respectively. Industrial adjusted operating margin increased 60 basis points to 13.2% in the first quarter of 2025 compared to the first quarter of 2024, driven by simplification initiatives.

Free Cash Flow Results

Free cash flow in the first quarter was a use of cash of $165 million driven by working capital requirements. Physical inventories grew to support future sales growth. In addition, free cash flow was negatively impacted by the timing of collections and compensation payments.

2025 Financial Guidance

"Fiscal year 2025 is shaping up to be another strong year, with growth in sales, continued operating margin expansion and enhanced free cash flow generation," said Jennifer Walter, CFO. "Both pricing and simplification will drive our operating margin expansion this year, while our focus on optimizing our planning and sourcing activities will contribute to our significant cash generation in the back half of the year."

(in millions, except per share results)

 

 

 

FY 2025 Guidance

 

Current

Previous

Net sales

$

3,700

 

$

3,700

 

Operating margin

 

12.9

%

 

13.0

%

Adjusted operating margin

 

13.0

%

 

13.0

%

Diluted net earnings per share(1)

$

8.06

 

$

8.20

 

Adjusted diluted net earnings per share

$

8.20

 

$

8.20

 

Free cash flow conversion

 

50 - 75

%

 

50 - 75

%

(1) Diluted net earnings per share figures are forecasted to be within range of +/- $0.20.

Diluted net earnings per share for the second quarter of 2025 is forecasted to be $1.75, plus or minus $0.10.

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 and supplemental financial materials at www.moog.com/investors/communications.

Cautionary Statement

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by words such as: “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “approximate,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume,” “assume” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology). These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, are neither historical facts nor 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.

Although it is not possible to create a comprehensive list of all factors that may cause our 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 are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the Securities and Exchange Commission (“SEC”) and include, but are not limited to, risks relating to: (i) our operation in highly competitive markets with competitors who may have greater resources than we possess; (ii) our operation in cyclical markets that are sensitive to domestic and foreign economic conditions and events; (iii) our heavy dependence on government contracts that may not be fully funded or may be terminated; (iv) supply chain constraints and inflationary impacts on prices for raw materials and components used in our products; (v) failure of our subcontractors or suppliers to perform their contractual obligations; and (vi) our accounting estimations for over-time contracts and any changes we need to make thereto. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties.

While we believe we have identified and discussed in our SEC filings 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 we make 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 press release, except as required by applicable law.

 

Moog Inc.

CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

(dollars in thousands, except per share data)

 

 

 

Three Months Ended

 

 

December 28, 2024

 

December 30, 2023

Net sales

 

$

910,315

 

$

856,850

Cost of sales

 

 

668,040

 

 

623,651

Gross profit

 

 

242,275

 

 

233,199

Research and development

 

 

23,605

 

 

30,579

Selling, general and administrative

 

 

127,781

 

 

118,725

Interest

 

 

17,002

 

 

16,694

Restructuring

 

 

3,784

 

 

1,889

Other

 

 

1,524

 

 

2,701

Earnings before income taxes

 

 

68,579

 

 

62,611

Income taxes

 

 

15,466

 

 

14,799

Net earnings

 

$

53,113

 

$

47,812

 

 

 

 

 

Net earnings per share

 

 

 

 

Basic

 

$

1.66

 

$

1.50

Diluted

 

$

1.64

 

$

1.48

 

 

 

 

 

Weighted average common shares outstanding

 

 

 

 

Basic

 

 

31,971,462

 

 

31,902,101

Diluted

 

 

32,407,293

 

 

32,249,313

 

Moog Inc.

RECONCILIATION TO ADJUSTED NET EARNINGS BEFORE TAXES, INCOMES TAXES, NET EARNINGS AND DILUTED NET EARNINGS PER SHARE (UNAUDITED)

(dollars in thousands)

 

 

Three Months Ended

 

 

December 28, 2024

 

December 30, 2023

As Reported:

 

 

 

 

Earnings before income taxes

 

$

68,579

 

 

$

62,611

 

Income taxes

 

 

15,466

 

 

 

14,799

 

Effective income tax rate

 

 

22.6

%

 

 

23.6

%

Net earnings

 

 

53,113

 

 

 

47,812

 

Diluted net earnings per share

 

$

1.64

 

 

$

1.48

 

 

 

 

 

 

Restructuring and Other Charges:

 

 

 

Earnings before income taxes

 

$

6,056

 

 

$

1,889

 

Income taxes

 

 

1,512

 

 

 

498

 

Net earnings

 

 

4,544

 

 

 

1,391

 

Diluted net earnings per share

 

$

0.14

 

 

$

0.04

 

 

 

 

 

 

As Adjusted:

 

 

 

 

Earnings before income taxes

 

$

74,635

 

 

$

64,500

 

Income taxes

 

 

16,978

 

 

 

15,297

 

Effective income tax rate

 

 

22.7

%

 

 

23.7

%

Net earnings

 

 

57,657

 

 

 

49,203

 

Diluted net earnings per share

 

$

1.78

 

 

$

1.53

 

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 restructuring and other charges related to continued portfolio shaping and footprint rationalization activities. 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

 

 

December 28, 2024

 

December 30, 2023

Net sales:

 

 

 

 

Space and Defense

 

$

247,784

 

 

$

230,128

 

Military Aircraft

 

 

213,420

 

 

 

186,244

 

Commercial Aircraft

 

 

220,923

 

 

 

194,222

 

Industrial

 

 

228,188

 

 

 

246,256

 

Net sales

 

$

910,315

 

 

$

856,850

 

Operating profit:

 

 

 

 

Space and Defense

 

$

28,539

 

 

$

25,297

 

 

 

 

11.5

%

 

 

11.0

%

Military Aircraft

 

 

22,916

 

 

 

19,589

 

 

 

 

10.7

%

 

 

10.5

%

Commercial Aircraft

 

 

24,204

 

 

 

20,626

 

 

 

 

11.0

%

 

 

10.6

%

Industrial

 

 

25,498

 

 

 

29,024

 

 

 

 

11.2

%

 

 

11.8

%

Total operating profit

 

 

101,157

 

 

 

94,536

 

 

 

 

11.1

%

 

 

11.0

%

Deductions from operating profit:

 

 

 

 

Interest expense

 

 

17,002

 

 

 

16,694

 

Equity-based compensation expense

 

 

4,325

 

 

 

4,165

 

Non-service pension expense

 

 

1,946

 

 

 

3,187

 

Corporate and other expenses, net

 

 

9,305

 

 

 

7,879

 

Earnings before income taxes

 

$

68,579

 

 

$

62,611

 

 

Moog Inc.

RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED)

(dollars in thousands)

 

 

Three Months Ended

 

 

December 28, 2024

 

December 30, 2023

Space and Defense operating profit - as reported

 

$

28,539

 

 

$

25,297

 

Restructuring and other

 

 

930

 

 

 

—

 

Space and Defense operating profit - as adjusted

 

$

29,469

 

 

$

25,297

 

 

 

 

11.9

%

 

 

11.0

%

 

 

 

 

 

Military Aircraft operating profit - as reported

 

$

22,916

 

 

$

19,589

 

Restructuring and other

 

 

591

 

 

 

—

 

Military Aircraft operating profit - as adjusted

 

$

23,507

 

 

$

19,589

 

 

 

 

11.0

%

 

 

10.5

%

 

 

 

 

 

Commercial Aircraft operating profit - as reported and adjusted

 

$

24,204

 

 

$

20,626

 

 

 

 

11.0

%

 

 

10.6

%

 

 

 

 

 

Industrial operating profit - as reported

 

$

25,498

 

 

$

29,024

 

Restructuring and other

 

 

4,535

 

 

 

1,889

 

Industrial operating profit - as adjusted

 

$

30,033

 

 

$

30,913

 

 

 

 

13.2

%

 

 

12.6

%

 

 

 

 

 

Total operating profit - as adjusted

 

$

107,213

 

 

$

96,425

 

 

 

 

11.8

%

 

 

11.3

%

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 BALANCE SHEETS (UNAUDITED)

(dollars in thousands)

 

 

 

December 28, 2024

 

September 28, 2024

ASSETS

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

73,448

 

 

$

61,694

 

Restricted cash

 

 

360

 

 

 

123

 

Receivables, net

 

 

472,310

 

 

 

419,971

 

Unbilled receivables

 

 

735,759

 

 

 

709,014

 

Inventories, net

 

 

886,088

 

 

 

863,702

 

Prepaid expenses and other current assets

 

 

77,783

 

 

 

86,245

 

Total current assets

 

 

2,245,748

 

 

 

2,140,749

 

Property, plant and equipment, net

 

 

934,087

 

 

 

929,357

 

Operating lease right-of-use assets

 

 

56,744

 

 

 

52,591

 

Goodwill

 

 

818,503

 

 

 

833,764

 

Intangible assets, net

 

 

59,469

 

 

 

63,479

 

Deferred income taxes

 

 

24,219

 

 

 

20,991

 

Other assets

 

 

54,242

 

 

 

52,695

 

Total assets

 

$

4,193,012

 

 

$

4,093,626

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

$

267,054

 

 

$

292,988

 

Accrued compensation

 

 

68,366

 

 

 

101,127

 

Contract advances and progress billings

 

 

293,550

 

 

 

299,732

 

Accrued liabilities and other

 

 

284,849

 

 

 

305,180

 

Total current liabilities

 

 

913,819

 

 

 

999,027

 

Long-term debt, excluding current installments

 

 

1,104,151

 

 

 

874,139

 

Long-term pension and retirement obligations

 

 

162,222

 

 

 

167,161

 

Deferred income taxes

 

 

26,080

 

 

 

27,738

 

Other long-term liabilities

 

 

171,962

 

 

 

164,928

 

Total liabilities

 

 

2,378,234

 

 

 

2,232,993

 

Shareholders’ equity

 

 

 

 

Common stock - Class A

 

 

43,844

 

 

 

43,835

 

Common stock - Class B

 

 

7,436

 

 

 

7,445

 

Additional paid-in capital

 

 

777,060

 

 

 

784,509

 

Retained earnings

 

 

2,712,875

 

 

 

2,668,723

 

Treasury shares

 

 

(1,141,242

)

 

 

(1,082,240

)

Stock Employee Compensation Trust

 

 

(186,219

)

 

 

(194,049

)

Supplemental Retirement Plan Trust

 

 

(156,865

)

 

 

(163,821

)

Accumulated other comprehensive loss

 

 

(242,111

)

 

 

(203,769

)

Total shareholders’ equity

 

 

1,814,778

 

 

 

1,860,633

 

Total liabilities and shareholders’ equity

 

$

4,193,012

 

 

$

4,093,626

 

Moog Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(dollars in thousands)

 

 

Three Months Ended

 

 

December 28, 2024

 

December 30, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net earnings

 

$

53,113

 

 

$

47,812

 

Adjustments to reconcile net earnings to net cash provided (used) by operating activities:

 

 

 

 

Depreciation

 

 

23,478

 

 

 

20,927

 

Amortization

 

 

2,323

 

 

 

2,720

 

Deferred income taxes

 

 

(3,577

)

 

 

(4,547

)

Equity-based compensation expense

 

 

4,325

 

 

 

4,165

 

Other

 

 

2,708

 

 

 

(2,478

)

Changes in assets and liabilities providing (using) cash:

 

 

 

 

Receivables

 

 

(63,037

)

 

 

58,887

 

Unbilled receivables

 

 

(31,073

)

 

 

(51,015

)

Inventories

 

 

(48,711

)

 

 

(46,852

)

Accounts payable

 

 

(22,973

)

 

 

(5,752

)

Contract advances and progress billings

 

 

(1,314

)

 

 

64,171

 

Accrued expenses

 

 

(29,372

)

 

 

(31,814

)

Accrued income taxes

 

 

(9,698

)

 

 

12,324

 

Net pension and post retirement liabilities

 

 

1,555

 

 

 

2,957

 

Other assets and liabilities

 

 

(10,031

)

 

 

(11,114

)

Net cash provided (used) by operating activities

 

 

(132,284

)

 

 

60,391

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Acquisitions of businesses, net of cash acquired

 

 

—

 

 

 

(5,212

)

Purchase of property, plant and equipment

 

 

(32,778

)

 

 

(37,416

)

Net proceeds from businesses sold

 

 

13,487

 

 

 

—

 

Other investing transactions

 

 

169

 

 

 

(479

)

Net cash provided (used) by investing activities

 

 

(19,122

)

 

 

(43,107

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from revolving lines of credit

 

 

426,500

 

 

 

279,500

 

Payments on revolving lines of credit

 

 

(197,000

)

 

 

(223,000

)

Payments on finance lease obligations

 

 

(2,745

)

 

 

(1,286

)

Payment of dividends

 

 

(8,961

)

 

 

(8,619

)

Proceeds from sale of treasury stock

 

 

—

 

 

 

581

 

Purchase of outstanding shares for treasury

 

 

(55,692

)

 

 

(8,711

)

Proceeds from sale of stock held by SECT

 

 

9,665

 

 

 

5,001

 

Purchase of stock held by SECT

 

 

(8,087

)

 

 

(4,561

)

Other financing transactions

 

 

(439

)

 

 

—

 

Net cash provided (used) by financing activities

 

 

163,241

 

 

 

38,905

 

Effect of exchange rate changes on cash

 

 

(2,564

)

 

 

1,495

 

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

 

 

9,271

 

 

 

57,684

 

Cash, cash equivalents and restricted cash at beginning of year (1)

 

 

64,537

 

 

 

69,144

 

Cash, cash equivalents and restricted cash at end of period

 

$

73,808

 

 

$

126,828

 

(1) Beginning of year cash balance at September 29, 2024 includes cash related to assets held for sale of $2,720.

 

Moog Inc.

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

(dollars in thousands)

 

Three Months Ended

 

 

December 28, 2024

 

December 30, 2023

Net cash provided (used) by operating activities

 

$

(132,284

)

 

$

60,391

 

Purchase of property, plant and equipment

 

 

(32,778

)

 

 

(37,416

)

Receivables Purchase Agreement

 

 

—

 

 

 

(25,000

)

Free cash flow

 

$

(165,062

)

 

$

(2,025

)

Adjusted net earnings

 

$

57,657

 

 

$

49,203

 

Free cash flow conversion

 

 

(286

)%

 

 

(4

)%

Free cash flow is defined as net cash provided (used) by operating activities, less purchase of property, plant and equipment, less the benefit from the Receivables Purchase Agreement. Free cash flow conversion is defined as free cash flow divided by adjusted net earnings. Free cash flow and free cash flow conversion 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 liquidity, 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/20250124319201/en/

Aaron Astrachan 716.687.4225