Financial Performance - Net sales for the fiscal year ended October 2, 2021, were $2,851,993, a decrease of 1.1% from $2,884,554 in the previous year[212]. - Gross profit increased to $775,723 for the fiscal year ended October 2, 2021, compared to $743,696 in the prior year, reflecting a gross margin of approximately 27.2%[212]. - Net earnings for the fiscal year ended October 2, 2021, were $157,220, significantly higher than $9,205 in the previous year, resulting in a net earnings per share of $4.90[212]. - Cash provided by operating activities was $293.23 million, compared to $279.18 million in the prior year, reflecting a year-over-year increase of approximately 5.4%[226]. - The company reported a net cash used by financing activities of $86.99 million, a decrease from $142.77 million in the previous year, indicating improved cash management[226]. Backlog and Sales - The twelve-month backlog was $2.1 billion as of October 2, 2021, representing a 24% increase compared to the previous year[16]. - As of October 2, 2021, the total backlog was $4.8 billion, representing confirmed orders expected to be recognized as revenue[65]. - In 2021, sales under U.S. Government contracts represented 44% of total sales, primarily within Aircraft Controls and Space and Defense Controls[63]. - Aerospace and defense OEM customers represented 58% of total sales in 2021, while industrial OEM sales accounted for 31%[44]. - Sales to Boeing and Lockheed Martin each accounted for 12% of total sales in 2021, with Boeing's commercial aircraft orders decreasing due to reduced global air traffic[64]. Research and Development - Research and development expenses were at least $110 million in each of the last three years, accounting for approximately 4% of sales in 2021[20]. - The company has incurred significant research and development expenses to maintain a leadership position in the high-performance, precision controls market[59]. - The company maintains a patent portfolio related to various technologies, including medical devices, which is significant for future revenue opportunities[19]. Employee and Workforce - In 2021, the company hired 1,348 new regular employees globally[27]. - The average voluntary attrition rate over the last four years was just below 5%[36]. - The company has implemented flexible working arrangements, including remote work and hybrid schedules, in response to employee feedback[35]. - The company issued 39,227 Class A shares related to compensation, compared to 31,943 in the previous year, indicating a focus on employee retention[223]. - Equity-based compensation expense rose to $7.46 million from $5.66 million, reflecting increased incentives for employees[226]. Financial Position and Liabilities - Total current assets increased to $1,718,780 as of October 2, 2021, compared to $1,613,487 in the previous year[217]. - Total liabilities rose to $2,033,025 as of October 2, 2021, up from $1,982,748 in the prior year[217]. - Shareholders' equity increased to $1,400,144 as of October 2, 2021, compared to $1,243,083 in the previous year[220]. - The company incurred $77.60 million in acquisitions of businesses, net of cash acquired, indicating a strategic investment in growth[226]. - The company has incurred significant indebtedness, which may limit operational and financial flexibility[72]. Risks and Challenges - The company has experienced lower customer demand and reduced manufacturing activities due to the COVID-19 pandemic, impacting overall financial performance[55]. - The uncertain length of the COVID-19 pandemic may shift the commercial market away from wide-body aircraft, affecting future sales[62]. - The company faces risks related to supply chain disruptions, including shortages of industry-wide parts and increased freight costs[55]. - Future levels of defense spending beyond 2021 are uncertain and subject to congressional debate, which could adversely impact sales and cash flow[63]. - The company relies on government contracts that may not be fully funded or may be terminated, potentially reducing sales and increasing costs[63]. Asset Management - As of October 2, 2021, the company's goodwill was $852 million and other intangible assets were $106 million, representing a significant portion of total assets of $3.4 billion[75]. - The company reported an impairment charge of $1.50 million related to long-lived assets, reflecting challenges in the Space and Defense Controls segment[226]. - The projected benefit obligation for U.S. defined benefit pension plans increased to $704,989 in 2021 from $688,689 in 2020, while the fair value of plan assets rose to $640,513 from $615,872[322]. - The accumulated benefit obligation for all defined benefit pension plans was $832,053 in 2021, down from $868,316 in 2020, with fair values of plan assets totaling $768,279[323]. - The company recorded a one-time settlement charge of $121,324 due to the purchase of a group annuity contract, which reduced the projected benefit obligation by $486,615[320]. Market and Economic Conditions - The company’s international operations are primarily in Europe and the Asia-Pacific region, facing typical risks associated with international trade[45]. - The company is exposed to currency, political, and trade risks due to its operations in foreign countries[78]. - Future catastrophic events, such as natural disasters or terrorist attacks, could negatively impact the company's business and financial condition[83]. - The transition away from LIBOR as an interest rate benchmark may negatively affect the company's debt agreements and financial position[73]. - Changes in discount rates and pension assumptions could adversely affect the company's earnings and increase pension funding requirements[74].
Moog(MOG_A) - 2021 Q4 - Annual Report