Financial Performance - Net sales for the three months ended April 2, 2022, were $770.8 million, an increase of 4.7% compared to $736.4 million for the same period in 2021[10] - Gross profit for the three months ended April 2, 2022, was $213.0 million, representing a gross margin of 27.6%, compared to $199.9 million and a gross margin of 27.1% in the prior year[10] - Net earnings for the three months ended April 2, 2022, were $29.1 million, a decrease of 40.4% from $48.7 million in the same period of 2021[10] - Basic net earnings per share for the three months ended April 2, 2022, were $0.91, down from $1.51 in the prior year[10] - Comprehensive income for the three months ended April 2, 2022, was $15.0 million, down from $39.4 million in the prior year[13] - Operating profit for the three months ended April 2, 2022, was $57.24 million, down from $72.48 million in the same period of 2021, indicating a decline of about 21%[102] - The company’s total operating profit for the six months ended April 2, 2022, was $137.64 million, compared to $143.35 million for the same period in 2021, a decrease of approximately 4%[102] - The company reported a net reclassification from AOCIL into earnings of $3.51 million for the three months ended April 2, 2022, compared to a negative reclassification of $2.23 million in the same period of 2021[97] Assets and Liabilities - Total assets as of April 2, 2022, were $3.44 billion, slightly up from $3.43 billion as of October 2, 2021[16] - Total liabilities decreased to $2.01 billion as of April 2, 2022, from $2.03 billion as of October 2, 2021[16] - Cash and cash equivalents increased to $120.4 million as of April 2, 2022, compared to $99.6 million as of October 2, 2021[16] - Goodwill balance as of April 2, 2022, was $842,203, down from $851,605 as of October 2, 2021, representing a decrease of 1.1%[70] - The company had $832,391 in long-term debt as of April 2, 2022, an increase from $823,355 as of October 2, 2021[73] Cash Flow and Investments - Net cash provided by operating activities increased to $180,197,000 for the six months ended April 2, 2022, compared to $137,367,000 for the same period in 2021, reflecting a growth of 31.1%[23] - Cash flow from operating activities for the first half of 2022 was $180 million, an increase of $43 million compared to the same period in 2021[153] - Net cash used by investing activities in the first half of 2022 included $74 million for capital expenditures and $12 million for the acquisition of TEAM Accessories[156] - Net cash used by financing activities in the first half of 2022 included $72 million of net paydown on credit facilities, $17 million of share repurchases, and $16 million of cash dividends[158] Research and Development - Research and development expenses for the three months ended April 2, 2022, were $30.7 million, consistent with $30.5 million in the same period of 2021[10] - Research and development expenses for the six months ended April 2, 2022, were $58.4 million, slightly down from $58.5 million in the same period in 2021[10] Dividends and Shareholder Returns - The company declared cash dividends of $0.26 per share for the three months ended April 2, 2022, compared to $0.25 per share in the same period of 2021[19] - The company declared and paid cash dividends of $0.25 and $0.26 per share on Class A and Class B common stock in the first and second quarters of 2022, respectively[174] Market and Segment Performance - Military segment net sales were $192.09 million for the three months ended April 2, 2022, down from $201.52 million in the same period of 2021, a decrease of about 4.7%[101] - Aircraft Controls net sales for military aircraft decreased by $9 million (5%) in Q2 2022 compared to Q2 2021, while commercial aircraft sales increased by $16 million (16%) in the same period[134] - Space and Defense Controls net sales increased by $17 million (8%) in Q2 2022 compared to Q2 2021, driven by growth in the defense market[139] - Industrial Systems net sales increased by $10 million (5%) in Q2 2022 compared to Q2 2021, supported by recoveries in simulation and test markets[144] Impairments and Charges - The company recorded impairment charges on long-lived assets in the Aircraft Controls segment due to a slower than expected recovery in the commercial aircraft business[28] - The company recorded impairment charges on inventory of $1,705 for the three months ended April 2, 2022, associated with Russian actions in Ukraine[60] - The company recognized impairment charges on property, plant, and equipment totaling $14,594 for the three months ended April 2, 2022[61] - The company incurred $15 million in asset impairments and $8 million in restructuring expenses in the second quarter of 2022, primarily in Aircraft Controls[131] Foreign Currency and Risks - The company reported a foreign currency translation adjustment loss of $18.3 million for the three months ended April 2, 2022, compared to a loss of $12.9 million in the same period in 2021[13] - The average foreign currency rates weakened against the U.S. dollar compared to 2021, impacting sales negatively[192] - The company faced various risks related to health pandemics, including the ongoing COVID-19 pandemic, which could adversely affect operations and financial position[194] Taxation - The effective tax rate for the three months ended April 2, 2022, was 24.9%, higher than the U.S. federal statutory tax rate of 21% due to taxes on foreign earnings[94] - The effective tax rate for the quarter was 24.9%, compared to 21.6% in the same quarter of 2021[128] Future Outlook - The company expects total net sales for 2022 to reach $3,035 million, an increase of $183 million (6%) compared to 2021[149] - Operating profit for Aircraft Controls is projected to increase by $27 million (28%) in 2022, reaching $123 million[149] - The adjusted operating margin for Aircraft Controls is expected to improve to 9.9% in 2022, up from 8.3% in 2021[149] - The company anticipates adjusted earnings per share to range between $5.30 and $5.70 for 2022, with a midpoint of $5.50[149]
Moog(MOG_B) - 2022 Q2 - Quarterly Report