Home> Press Releases> MOOG’S FOURTH QUARTER NET EARNINGS UP 19%

MOOG’S FOURTH QUARTER NET EARNINGS UP 19%

11/12/2002

Moog Inc. (NYSE:MOG.A and MOG.B ) announced today fourth quarter earnings of $10.3 million, an increase of 19% over last year’s comparable fourth quarter. Earnings per share were $.67.

Sales for the quarter of $186 million were up $1 million compared with last year. A $13 million increase in military aircraft sales more than offset sales declines in other parts of Moog’s business.

The dramatic increase in military aircraft sales reflected, first and foremost, the design and development phase of the F-35 Joint Strike Fighter. Moog’s revenues in the quarter were $6 million on the F-35 and continue to build. The quarter also benefited from continued growth in repair and overhaul of equipment on military aircraft in service. In addition, sales increased on the V-22 Osprey, the Blackhawk Helicopter, and the F-15 Eagle programs. Commercial aircraft revenues continue to reflect the decreasing production rate at Boeing and reduced aftermarket sales, while increased sales to Raytheon and Bombardier boosted revenues in the business jet category. All in all, sales in the Aircraft segment increased by a net of $5 million and margins continued to be at very high levels.

In the Space segment, a break in production on the Hellfire missile and the completion of the AGM-142 Program, taken together with slower commercial satellite sales, resulted in a $4 million decrease in revenues. Margins in the Space segment also declined, reflecting the lower sales volume.

Industrial sales were essentially flat for the quarter. Increased sales of industrial equipment used for combat controls on military vehicles offset the continuing decline in delivery of turbine controls. Moog’s Industrial segment has been coping with relatively weak economic conditions and, in this environment, stable revenues are a positive sign. In addition, margins in the quarter began to show improvement over previous quarters. A broad range of product improvements and cost reduction initiatives are beginning to impact industrial margins and this trend should continue into fiscal 2003.

For the fiscal year 2002, Moog’s net earnings were $37.6 million, an increase of 16% over last year. Earnings per share were $2.50 for the year. This earnings increase is all the more remarkable since sales increased by only 2% to $719 million. As was the case in the fourth quarter, a substantial shift in the mix of sales was partly responsible for the increased earnings. Although total sales increased by only $15 million, military aircraft revenues increased by $44 million, and overwhelmed declines in commercial airplane revenues and a relatively weak industrial economy. In addition, very strong margins in the Aircraft segment offset lower margins in the other segments.

Year-end backlog of $365 million was level with a year ago.

The Company is reaffirming its earnings target for fiscal 2003 of $42.4 million, or $2.75 per share, a 10% earnings increase on a per-share basis. Continued growth in military aircraft sales on the F-35, the V-22, and in the military aftermarket will drive total sales to $760 million, an increase of 6% over fiscal 2002.

“As a management team, we are more than satisfied with the results that our Company achieved in fiscal 2002,” said R. T. Brady, Chairman and C.E.O., “particularly in view of what happened during the year in commercial aircraft, commercial space and the overall industrial economy. Certainly, we played to our strength in the military business. The start-up of the Joint Strike Fighter Development Program, taken together with a 26% increase in military aftermarket, allowed us to achieve earnings targets that were set before 9/11. We expect this pattern to continue through fiscal 2003. Another $47 million increase in 2003 military aircraft revenues will allow us to adjust to the current realities in commercial aircraft and commercial space, while we prepare for a rebound in the industrial economy.”

Moog Inc. is a worldwide manufacturer of precision control components and systems. Moog’s high-performance actuation products control military and commercial aircraft, satellites and space vehicles, launch vehicles, missiles and automated industrial machinery.

Moog Inc. Cautionary Statement

This news release (the foregoing remarks) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Information, included herein or incorporated by reference, that are not historical facts, including statements accompanied by or containing words such as “believes,” “expects,” “intends,” “plans,” “projects,” “estimates,” “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 (i) fluctuations in general business cycles, demand for capital goods and government funding of procurement programs in which the Company participates, (ii) the dependency on certain major customers, such as Boeing and certain U.S. Government contractors, for a significant percentage of its sales, (iii) intense competition in the Company’s business which, depending on product line, may require the Company to compete by lowering prices or by advancing its technologies; several of the Company’s competitors are substantially larger than the Company and have greater financial resources with which to compete, (iv) the potential for substantial fines and penalties or debarment from future contracts in the event the Government’s procurement rules are not followed, (v) the potential for cost overruns on development jobs and actual results that may differ from estimates used in contract accounting, (vi) the possibility of a catastrophic loss of one or more of the Company’s manufacturing facilities, (vii) the impact of product liability claims related to the Company’s products used in applications where failure can result in significant property damage, injury and death, and (viii) foreign currency fluctuations in those countries in which the Company does business which can adversely affect the Company’s results of operations and financial condition. The factors identified above 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 risks, factors and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. The Company disclaims any obligation to update the forward-looking statements made herein. Additional information about the Company’s quarter ended September 28, 2002 can be found on its website, including a text of its prepared conference call remarks.