Moog Inc. Q1 FY2025 earnings call

• Customer Focus: Secured record quarterly bookings over $450M in Space and Defense, including a $100M+ order from Lockheed for PAC-3, and initial bookings on collaborative combat aircraft. Commercial Aircraft had ~$400M in orders with ~60% aftermarket content.
• People, Community and Planet: Regained production capacity at Tewkesbury within 8 weeks, published a second sustainability report with CO2 reduction, water conservation efforts, and collaboration with JetZero on blended wing body demonstrator.
• Financial Strength: Drove margin enhancement through pricing and simplification, completed transfer of production from Radford, Virginia, entered consultation for UK site closure, expanded 80/20 deployment to 75% of business by sales.

In the first quarter, sales were $910 million, 6% higher than last year's first quarter. Military Aircraft sales were $213 million, up 15%; Commercial Aircraft sales were $221 million, up 14%; Space and Defense sales were $248 million, up 8%; Industrial sales were $228 million, down 7%. Military Aircraft and Commercial Aircraft had the most significant sales increases. Segment revenue contributions: Military Aircraft ~23.4% ($213M/$910M), Commercial Aircraft ~24.3% ($221M/$910M), Space and Defense ~27.3% ($248M/$910M), Industrial ~25.1% ($228M/$910M).

• Fiscal 2025 guidance unchanged: Solid revenue growth, adjusted operating margin expansion, and improved free cash flow. Revenue guide unchanged with minor segment updates. Margin guide unchanged. EPS guidance at $8.20 ± $0.20. Second quarter EPS forecast at $1.75 ± $0.10. Free cash flow conversion expected in 50%-75% range for FY 2025.

• Geopolitical challenges: Ongoing wars in Ukraine and tensions over Taiwan, undiminished threat from near-peer military capabilities.
• Tariffs: New administration likely to introduce tariffs, impact to be mitigated with customers and suppliers.

Q: Could you talk about Moog's involvement in CCA?

A: Moog has development activity underway on CCA programs, early stages, involved with 1 or 2 players.

Q: How about Boeing's investment in 787 production line?

A: Boeing aims for 10 per month 787 by fiscal '26, investment to enable that through Charleston facility.

Q: How did aftermarket orders fare with Tewkesbury down?

A: Repair work goes through other facilities, strong backlog, and direct spare provisioning helped boost sales; Tewkesbury production environment recovering.

Q: Why the warranty expense and its sustainability?

A: One-time out-of-period expense, not ongoing; aftermarket strength continues but not banking on repeat in subsequent quarters.

Q: Industrial book-to-bill >1x, what drove it?

A: Industrial automation stable, medical pumps strong, simulation and test helped; Industrial automation expected to be stable through FY '25.

Q: Medical device business window for record?

A: Window ~6-9 months, competitor issues causing record, likely stable as competitor catches up but fleet consumables keep business sticky.

Q: OE assumptions for Commercial?

A: Strong alignment with customer plans for wide-body programs, timing of orders caused short-term delay last year, now normalized with catch-up orders.