Moog Inc. (NYSE:MOG), a worldwide designer, manufacturer and systems integrator of high-performance precision motion and fluid controls and control systems, today reported fiscal third quarter 2024 diluted earnings per share of $1.74 and adjusted diluted earnings per share of $1.91.

"We delivered a solid performance in the third quarter of 2024, with significant improvements in our financial results," said Pat Roche, CEO. "Our teams continue to execute well, driving both top-line growth and margin expansion across our businesses. Our commitment to achieving our Investor Day targets remains strong, with clear progress in our pricing and simplification initiatives. With this momentum we are confident in our continued success and growth."

(in millions, except per share results)	Three Months Ended
	Q3 2024			Q3 2023			Deltas
Net sales	$	905		$	850			6	%
Operating margin		11.6	%		9.9	%	170 bps
Adjusted operating margin		12.3	%		10.2	%	210 bps
Diluted net earnings per share	$	1.74		$	1.32			32	%
Adjusted diluted net earnings per share	$	1.91		$	1.37			39	%
Net cash provided by operating activities	$	30		$	16		$	14
Free cash flow	$	(2	)	$	(19	)	$	17
See the reconciliations of adjusted financial results and free cash flow to reported results included in the financial statements herein for the quarters ended June 29, 2024 and July 1, 2023.

Quarter Highlights

Net sales of $905 million increased 6% compared to the prior year's quarter, with increases in our aerospace and defense businesses, while Industrial was slightly down.
Operating margin of 11.6% increased 170 basis points, driven by improved performance in Space and Defense, Commercial Aircraft and Military Aircraft, while Industrial declined 130 basis points.
Adjusted operating margin of 12.3% increased 210 basis points, reflecting improved business performance across all segments.
Diluted earnings per share of $1.74 increased 32% due to higher operating profit, partially offset by restructuring charges and a higher tax rate.
Adjusted diluted earnings per share of $1.91 increased 39%, driven by operating margin expansion and incremental profit from higher sales.
Free cash flow improved by $17 million as compared to last year.

Quarter Results

Sales in the third quarter of 2024 increased compared to the third quarter of 2023, with notable growth in Military Aircraft, Space and Defense and Commercial Aircraft. Military Aircraft sales increased 18% to $207 million due to the ramp of the FLRAA program and other OEM production programs. Space and Defense sales increased 7% to $258 million driven by strong U.S. and European defense demand. Commercial Aircraft sales increased 6% to $189 million due to the increased production in our widebody business. Industrial segment sales decreased 1% to $250 million due to a slowdown in orders for industrial automation applications, partially offset by higher product demand in other markets.

Operating margin increased 170 basis points to 11.6% in the third quarter of 2024 compared to the third quarter of 2023. Space and Defense operating margin increased 490 basis points to 12.6% due to improved performance on space vehicle development programs. Commercial Aircraft operating margin increased 190 basis points to 12.9%, driven by higher sales volume and pricing initiatives, as well as mix. Military Aircraft operating margin increased 130 basis points to 11.6%, driven by cost absorption on the FLRAA program. Industrial operating margin decreased 130 basis points to 9.8%, impacted by higher restructuring and inventory write-down charges.

Adjusted operating margin in the third quarter of 2024 increased 210 basis points to 12.3% compared to the third quarter of 2023. The only segment with significant adjustments was Industrial, whose adjusted operating margin increased as the benefits of pricing more than offset an unfavorable sales mix and planned product transfers.

Twelve-month backlog remains robust, increasing 7% to $2.5 billion, driven by strong product demand across the aerospace and defense businesses.

Free cash flow in the third quarter was a use of cash of $2 million, an improvement of $17 million year-over-year, driven by higher net cash from operating activities and lower capital expenditures.

2024 Financial Guidance

"Fiscal year 2024 is measuring up to be a great step towards achieving our long-term financial targets," said Jennifer Walter, CFO. "This year, our sales will grow by 8%, our adjusted operating margin will expand by 150 basis points and our adjusted earnings per share will increase by 20%."

(in millions, except per share results)	FY 2024 Guidance
	Current			Previous
Net sales	$	3,575		$	3,550
Operating margin		11.8	%		11.9	%
Adjusted operating margin		12.4	%		12.4	%
Diluted net earnings per share*	$	6.85		$	6.87
Adjusted diluted net earnings per share*	$	7.40		$	7.25
*Diluted net earnings per share figures for 2024 are forecasted to be within range of +/- $0.10.

When the company provides adjusted, non-GAAP figures on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort.

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 live, or in replay mode, at www.moog.com/investors/communications. Supplemental financial data will be available on the website approximately 90 minutes prior to the conference call.

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				Nine Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Net sales	$	904,735	$	850,176	$	2,691,888	$	2,447,071
Cost of sales		651,672		627,543		1,938,673		1,799,437
Inventory write-down		1,600		—		1,775		—
Gross profit		251,463		222,633		751,440		647,634
Research and development		27,791		26,502		86,752		77,107
Selling, general and administrative		126,361		121,935		370,047		351,795
Interest		18,153		17,256		52,850		45,351
Asset impairment		112		435		6,862		1,654
Restructuring		3,984		1,642		12,623		4,737
Gain on sale of buildings		—		—		—		(10,030	)
Other		4,157		4,525		10,041		10,077
Earnings before income taxes		70,905		50,338		212,265		166,943
Income taxes		14,545		7,951		48,090		35,527
Net earnings	$	56,360	$	42,387	$	164,175	$	131,416

Net earnings per share
Basic	$	1.76	$	1.33	$	5.14	$	4.13
Diluted	$	1.74	$	1.32	$	5.08	$	4.11

Weighted average common shares outstanding
Basic		31,960,165		31,838,961		31,943,365		31,811,034
Diluted		32,409,370		32,067,391		32,342,700		31,995,340


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						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
As Reported:
Earnings before income taxes	$	70,905		$	50,338		$	212,265		$	166,943
Income taxes		14,545			7,951			48,090			35,527
Effective income tax rate		*20.5*	%		15.8	%		*22.7*	%		21.3	%
Net earnings		56,360			42,387			164,175			131,416
Diluted net earnings per share	$	1.74		$	1.32		$	5.08		$	4.11

Restructuring and Other Charges:
Earnings before income taxes	$	5,817		$	1,642		$	15,296		$	5,786
Income taxes		1,502			386			3,852			1,303
Net earnings		4,315			1,256			11,444			4,483
Diluted net earnings per share	$	0.13		$	0.04		$	0.35		$	0.14

Asset Impairment:
Earnings before income taxes	$	112		$	435		$	6,862		$	1,654
Income taxes (benefit)		(1,223	)		66			370			349
Net earnings		1,335			369			6,492			1,305
Diluted net earnings per share	$	0.04		$	0.01		$	0.20		$	0.04

Gain on Sale of Buildings:
Earnings before income taxes	$	—		$	—		$	—		$	(10,030	)
Income taxes		—			—			—			(2,086	)
Net earnings		—			—			—			(7,944	)
Diluted net earnings per share	$	—		$	—		$	—		$	(0.25	)

As Adjusted:
Earnings before income taxes	$	76,834		$	52,415		$	234,423		$	164,353
Income taxes		14,824			8,403			52,312			35,093
Effective income tax rate		*19.3*	%		16.0	%		*22.3*	%		21.4	%
Net earnings		62,010			44,012			182,111			129,260
Diluted net earnings per share	$	1.91		$	1.37		$	5.63		$	4.04
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 activities, asset impairments and other charges due to program termination and the devaluation of an investment, as well as impacts from the sale of buildings. 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						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Net sales:
Space and Defense	$	258,409		$	242,402		$	755,324		$	706,040
Military Aircraft		207,177			176,217			595,921			536,770
Commercial Aircraft		189,365			178,808			591,181			475,518
Industrial		249,784			252,749			749,462			728,743
Net sales	$	904,735		$	850,176		$	2,691,888		$	2,447,071
Operating profit:
Space and Defense	$	32,635		$	18,585		$	100,175		$	66,386
		*12.6*	%		7.7	%		*13.3*	%		9.4	%
Military Aircraft		23,965			18,143			60,323			49,525
		*11.6*	%		10.3	%		*10.1*	%		9.2	%
Commercial Aircraft		24,367			19,745			69,838			49,943
		*12.9*	%		11.0	%		*11.8*	%		10.5	%
Industrial		24,413			28,035			81,592			89,183
		*9.8*	%		11.1	%		*10.9*	%		12.2	%
Total operating profit		105,380			84,508			311,928			255,037
		*11.6*	%		9.9	%		*11.6*	%		10.4	%
Deductions from operating profit:
Interest expense		18,153			17,256			52,850			45,351
Equity-based compensation expense		4,089			2,356			11,301			8,121
Non-service pension expense		3,188			3,124			9,566			9,338
Corporate and other expenses, net		9,045			11,434			25,946			25,284
Earnings before income taxes	$	70,905		$	50,338		$	212,265		$	166,943

Moog Inc. RECONCILIATION TO ADJUSTED OPERATING PROFIT AND MARGINS (UNAUDITED) (dollars in thousands)
	Three Months Ended						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Space and Defense operating profit - as reported	$	32,635		$	18,585		$	100,175		$	66,386
Asset impairment		112			—			416			219
Restructuring and other		—			273			—			1,554
Space and Defense operating profit - as adjusted	$	32,747		$	18,858		$	100,591		$	68,159
		*12.7*	%		7.8	%		*13.3*	%		9.7	%

Military Aircraft operating profit - as reported	$	23,965		$	18,143		$	60,323		$	49,525
Inventory write-down		—			—			175			—
Asset impairment		—			97			6,446			1,097
Restructuring and other		609			275			4,397			275
Military Aircraft operating profit - as adjusted	$	24,574		$	18,515		$	71,341		$	50,897
		*11.9*	%		10.5	%		*12.0*	%		9.5	%

Commercial Aircraft operating profit - as reported	$	24,367		$	19,745		$	69,838		$	49,943
Asset impairment		—			338			—			338
Restructuring		408			—			408			—
Commercial Aircraft operating profit - as adjusted	$	24,775		$	20,083		$	70,246		$	50,281
		*13.1*	%		11.2	%		*11.9*	%		10.6	%

Industrial operating profit - as reported	$	24,413		$	28,035		$	81,592		$	89,183
Inventory write-down		1,600			—			1,600			—
Gain on sale of buildings		—			—			—			(10,030	)
Restructuring and other		3,200			1,094			8,716			3,957
Industrial operating profit - as adjusted	$	29,213		$	29,129		$	91,908		$	83,110
		*11.7*	%		11.5	%		*12.3*	%		11.4	%

Total operating profit - as adjusted	$	111,309		$	86,585		$	334,086		$	252,447
		*12.3*	%		10.2	%		*12.4*	%		10.3	%

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)
	June 29, 2024			September 30, 2023
ASSETS
Current assets
Cash and cash equivalents	$	50,572		$	68,959
Restricted cash		946			185
Receivables, net		452,967			434,723
Unbilled receivables		766,445			706,601
Inventories, net		831,377			724,002
Prepaid expenses and other current assets		70,081			50,862
Total current assets		2,172,388			1,985,332
Property, plant and equipment, net		886,013			814,696
Operating lease right-of-use assets		57,669			56,067
Goodwill		827,319			821,301
Intangible assets, net		66,422			71,637
Deferred income taxes		9,050			8,749
Other assets		48,887			50,254
Total assets	$	4,067,748		$	3,808,036
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	266,294		$	264,573
Accrued compensation		98,981			111,154
Contract advances and progress billings		353,496			377,977
Accrued liabilities and other		269,633			211,769
Total current liabilities		988,404			965,473
Long-term debt, excluding current installments		958,127			863,092
Long-term pension and retirement obligations		160,635			157,455
Deferred income taxes		13,668			37,626
Other long-term liabilities		153,122			148,303
Total liabilities		2,273,956			2,171,949
Shareholders' equity
Common stock - Class A		43,835			43,822
Common stock - Class B		7,445			7,458
Additional paid-in capital		726,656			608,270
Retained earnings		2,634,633			2,496,979
Treasury shares		(1,073,027	)		(1,057,938	)
Stock Employee Compensation Trust		(167,757	)		(114,769	)
Supplemental Retirement Plan Trust		(140,449	)		(93,126	)
Accumulated other comprehensive loss		(237,544	)		(254,609	)
Total shareholders' equity		1,793,792			1,636,087
Total liabilities and shareholders' equity	$	4,067,748		$	3,808,036

Moog Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (dollars in thousands)
	Nine Months Ended
	June 29, 2024			July 1, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings	$	164,175		$	131,416
Adjustments to reconcile net earnings to net cash provided (used) by operating activities:
Depreciation		64,302			56,780
Amortization		7,677			8,725
Deferred income taxes		(26,483	)		(26,680	)
Equity-based compensation expense		11,301			8,121
Gain on sale of buildings		—			(10,030	)
Asset impairment and inventory write-down		8,637			1,654
Other		5,374			5,083
Changes in assets and liabilities providing (using) cash:
Receivables		(18,677	)		(62,439	)
Unbilled receivables		(57,723	)		(100,820	)
Inventories		(105,629	)		(102,782	)
Accounts payable		918			8,514
Contract advances and progress billings		(26,882	)		65,746
Accrued expenses		36,928			(30,697	)
Accrued income taxes		9,832			21,568
Net pension and post retirement liabilities		8,783			11,199
Other assets and liabilities		(35,978	)		(2,455	)
Net cash provided (used) by operating activities		46,555			(17,097	)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses, net of cash acquired		(5,911	)		—
Purchase of property, plant and equipment		(109,616	)		(125,074	)
Net proceeds from businesses sold		1,627			959
Net proceeds from buildings sold		—			19,702
Other investing transactions		(646	)		(9,482	)
Net cash used by investing activities		(114,546	)		(113,895	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from revolving lines of credit		784,500			711,732
Payments on revolving lines of credit		(691,000	)		(536,826	)
Payments on long-term debt		—			(219	)
Payments on finance lease obligations		(4,468	)		(3,449	)
Payment of dividends		(26,521	)		(25,459	)
Proceeds from sale of treasury stock		7,579			12,765
Purchase of outstanding shares for treasury		(21,832	)		(23,133	)
Proceeds from sale of stock held by SECT		16,670			9,863
Purchase of stock held by SECT		(14,296	)		(10,035	)
Other financing transactions		—			(2,026	)
Net cash provided by financing activities		50,632			133,213
Effect of exchange rate changes on cash		(267	)		3,950
Increase (decrease) in cash, cash equivalents and restricted cash		(17,626	)		6,171
Cash, cash equivalents and restricted cash at beginning of period		69,144			119,233
Cash, cash equivalents and restricted cash at end of period	$	51,518		$	125,404

Moog Inc. RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) (dollars in thousands)
	Three Months Ended						Nine Months Ended
	June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Net cash provided (used) by operating activities	$	30,166		$	15,919		$	46,555		$	(17,097	)
Purchase of property, plant and equipment		(32,086	)		(35,331	)		(109,616	)		(125,074	)
Free cash flow	$	(1,920	)	$	(19,412	)	$	(63,061	)	$	(142,171	)

Free cash flow is defined as net cash provided (used) by operating activities less purchase of property, plant and equipment. Free cash flow is not a measure determined in accordance with GAAP and may not be comparable with the measures as used by other companies. However, management believes this adjusted financial measure 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.

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Moog Inc. Reports Strong Third Quarter 2024 Results with Further Margin Expansion