Financial Performance - Net sales for the fiscal year ended September 30, 2023, were $3,319.1 million, an increase of 9.4% from $3,035.8 million in the previous year[217]. - Gross profit for the same period was $891.5 million, representing a gross margin of approximately 26.8%, up from $820.8 million in the prior year[217]. - Net earnings increased to $171.0 million, a rise of 10.5% compared to $155.2 million in the previous year, resulting in diluted earnings per share of $5.34[217]. - The company reported comprehensive income of $227.4 million for the fiscal year, significantly higher than $91.7 million in the previous year[219]. - The company reported net cash provided by operating activities of $135,935,000 for the fiscal year ended September 30, 2023, a decrease from $246,802,000 in the prior year[231]. Sales and Market Segmentation - Aerospace and defense OEM customers accounted for 58% of total sales in 2023, while industrial market sales represented 30%[42]. - Sales under U.S. Government contracts constituted 39% of total sales in 2023, primarily within Aircraft Controls and Space and Defense Controls segments[44]. - Net sales to the five largest customers represented approximately 32% of total sales in 2023[43]. - Aftermarket sales accounted for 13% of total sales in 2023[42]. - Sales to The Boeing Company constituted 11% of total sales in 2023, with a significant portion tied to government defense spending[62]. Research and Development - Research and development expenses were at least $107 million in each of the last three years, representing approximately 3% of sales in 2023[21]. - The company has incurred substantial expenses associated with research and development to maintain a leadership position in the high-performance, precision controls market[56]. - Research and development expenses were $106.6 million, slightly down from $109.5 million in the previous year, indicating a focus on cost management[217]. - Research and development costs are expensed as incurred, including salaries, benefits, consulting, material costs, depreciation, and amortization[241]. Backlog and Future Revenue - The twelve-month backlog as of September 30, 2023, was $2.4 billion, reflecting a 4% increase compared to October 1, 2022[17]. - As of September 30, 2023, the total backlog was $5.1 billion, representing confirmed orders expected to be recognized as revenue[63]. - The aggregate amount of transaction price allocated to unsatisfied performance obligations was $5,100,000, with an expectation to recognize approximately 47% as sales over the next twelve months[279]. - The company may not realize the full revenue value of orders in its backlog due to uncertainties in government contracts[63]. Employment and Workforce - The company hired over 2,000 new regular employees globally in 2023[25]. - The average voluntary attrition rate over the last five years was approximately 6%[33]. Financial Position and Assets - Total assets increased to $3,808.0 million from $3,431.8 million year-over-year, reflecting growth in the company's financial position[223]. - Shareholders' equity rose to $1,636.1 million, up from $1,436.8 million, indicating improved financial health and retained earnings[223]. - As of September 30, 2023, the company reported goodwill of $821 million and other intangible assets of $72 million, representing a significant portion of total assets of $3.8 billion[75]. Risks and Challenges - The company experienced supply chain constraints and inflated prices for raw materials, impacting manufacturing and operating profit[64]. - Future levels of defense spending are uncertain and subject to congressional debate, which could adversely impact sales and operating profit[61]. - The company faces risks from competitors with greater resources, which may impact sales and operating margins[55]. - The company relies on subcontractors and suppliers for manufacturing, which poses risks to contract performance and future business opportunities[65]. - The company faces potential liabilities from product defects, which could lead to recalls and significant damages, impacting financial results and reputation[69]. Environmental and Governance - The company is assessing its environmental, social, and governance impact across 25 countries to establish sustainability goals[39]. - Compliance with environmental laws may require significant capital expenditures, especially if new regulations are introduced[81]. Debt and Liabilities - The company had $368 million in borrowings subject to variable interest rates as of September 30, 2023, with an average borrowing of $481 million during the year[211]. - Long-term debt increased from $836,872 million on October 1, 2022, to $863,092 million on September 30, 2023, an increase of about 3.1%[316]. - The weighted-average interest rate on outstanding credit facility borrowings was 6.93% as of September 30, 2023[316]. Pension and Benefits - Changes in pension assumptions could adversely affect earnings and funding requirements, despite the largest pension plan being well funded[74]. - The projected benefit obligation for U.S. plans decreased from $530,946 in 2022 to $494,876 in 2023, a reduction of approximately 6.5%[339]. - The funded status for U.S. plans worsened, with a deficit of $102,432 in 2023 compared to a deficit of $85,223 in 2022, indicating a deterioration of approximately 20.2%[339]. - The company recognized a one-time settlement charge of $12,542 due to the lump sum payment made in the U.S. defined benefit pension plan[339].
Moog(MOG_B) - 2023 Q4 - Annual Report