___________________________________________________________________________
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ______________
Commission File Number: 1-5129
MOOG INC.
(Exact name of registrant as specified in its charter)
New York State 16-0757636
___________________________________________________________________________
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
East Aurora, New York 14052-0018
___________________________________________________________________________
(Address of principal executive offices) (Zip code)
Telephone number including area code: (716) 652-2000
___________________________________________________________________________
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
The number of shares outstanding of each class of common stock as of May 5,
1997 were:
Class A Common Stock, $1.00 par value 5,406,845 shares
Class B Common Stock, $1.00 par value 1,586,275 shares
<PAGE>
MOOG INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION 3-13
Item 1. Consolidated Condensed Balance Sheets
as of March 31, 1997 and September 30,
1996 3
Consolidated Condensed Statements of
Income for the Three and Six Months Ended
March 31, 1997 and 1996 4
Consolidated Condensed Statements of
Cash Flows for the Six Months Ended
March 31, 1997 and 1996 5
Notes to Consolidated Condensed
Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9
PART II. OTHER INFORMATION 14
SIGNATURES 15
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
MOOG INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(dollars in thousands)
Unaudited Audited
As of As of
March 31, September 30,
1997 1996
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,967 $ 9,639
Receivables 151,094 155,972
Inventories (note 3) 104,420 99,318
Deferred income taxes 18,776 19,708
Prepaid expenses and other current assets 3,112 2,939
_______ _______
TOTAL CURRENT ASSETS 284,369 287,576
PROPERTY, PLANT AND EQUIPMENT, net 134,290 131,371
INTANGIBLE ASSETS, net (note 2) 51,935 16,024
OTHER ASSETS 14,040 14,587
_______ _______
TOTAL ASSETS $484,634 $449,558
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 1,497 $ 3,420
Current installments of long-term debt 12,559 10,491
Accounts payable 19,312 21,597
Accrued salaries, wages and commissions 23,992 24,504
Contract loss reserves 6,289 10,966
Accrued interest 7,832 6,160
Other accrued liabilities 16,434 14,208
Customer advances 5,229 8,259
_______ _______
TOTAL CURRENT LIABILITIES 93,144 99,605
LONG-TERM DEBT, excluding current installments
Senior debt 116,915 77,351
Senior subordinated notes 120,000 120,000
OTHER LONG-TERM LIABILITIES 46,686 47,859
_______ _______
TOTAL LIABILITIES 376,745 344,815
_______ _______
SHAREHOLDERS' EQUITY (note 4)
Preferred stock 100 100
Common stock 9,134 9,134
Other shareholders' equity 98,655 95,509
_______ _______
TOTAL SHAREHOLDERS' EQUITY 107,889 104,743
_______ _______
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $484,634 $449,558
======= =======
See accompanying Notes to Consolidated Condensed Financial Statements.
<PAGE>
MOOG INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(dollars in thousands except per share data)
Three Months Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
NET SALES $ 109,805 $ 106,822 $ 213,655 $ 200,055
OTHER INCOME 387 838 906 1,356
__________ __________ __________ __________
110,192 107,660 214,561 201,411
__________ __________ __________ __________
COSTS AND EXPENSES
Cost of sales 74,802 74,498 145,601 139,205
Research and
development 4,364 4,680 8,565 8,685
Selling, general and
administrative 20,362 19,629 39,881 37,443
Interest 5,816 4,344 11,173 8,301
Other expenses 333 78 600 120
__________ __________ __________ __________
105,677 103,229 205,820 193,754
__________ __________ __________ __________
EARNINGS BEFORE
INCOME TAXES 4,515 4,431 8,741 7,657
INCOME TAXES 1,256 1,387 2,523 2,263
__________ __________ __________ __________
NET EARNINGS $ 3,259 $ 3,044 $ 6,218 $ 5,394
========== ========== ========== ==========
NET EARNINGS PER
COMMON AND COMMON
EQUIVALENT SHARE $ 0.45 $ 0.40 $ 0.86 $ 0.70
========== ========== ========== ==========
AVERAGE COMMON AND
COMMON EQUIVALENT
SHARES OUTSTANDING
(note 5) 7,227,732 7,673,405 7,215,989 7,700,456
========== ========== ========== ==========
See accompanying Notes to Consolidated Condensed Financial
Statements.
<PAGE>
MOOG INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31
(Unaudited)
(dollars in thousands)
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $ 6,218 $ 5,394
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation and amortization 10,660 9,913
Other (5,428) (6,535)
______ ______
NET CASH PROVIDED BY OPERATING ACTIVITIES 11,450 8,772
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of businesses (note 2) (48,589) (5,012)
Purchase of property, plant and equipment (6,391) (4,775)
Other 343 214
______ ______
NET CASH USED BY INVESTING ACTIVITIES (54,637) (9,573)
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES
Net repayments of notes payable (1,834) (1,956)
Net proceeds from revolving lines of credit 31,000 7,475
Proceeds from issuance of long-term debt 18,035 3,194
Payments on long-term debt (6,360) (3,990)
Common stock repurchase - (1,600)
Other (519) 25
______ ______
NET CASH PROVIDED BY FINANCING ACTIVITIES 40,322 3,148
______ ______
Effect of exchange rate changes on cash 193 (174)
______ ______
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,672) 2,173
Cash and cash equivalents at beginning of period 9,639 7,576
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,967 $ 9,749
====== ======
CASH PAID FOR:
Interest $ 9,142 $ 5,940
Income taxes 2,436 1,608
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Leases capitalized, net of leases terminated $ 196 $ 597
See accompanying Notes to Consolidated Condensed Financial Statements.
<PAGE>
MOOG INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED MARCH 31, 1997
(Unaudited)
(dollars in thousands)
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared by management and in the opinion of
management contain all adjustments, consisting of normal
recurring adjustments, necessary to present fairly the financial
position of Moog Inc. as of March 31, 1997, the results of its
operations for the three and six months ended March 31, 1997 and
1996 and its cash flows for each of the six month periods ended
March 31, 1997 and 1996. The results of operations for the three
and six month periods ended March 31, 1997 are not necessarily
indicative of the results expected for the full year.
2. Acquisition
On October 26, 1996, the Company acquired the assets of and
assumed certain liabilities related to the industrial hydraulic
servocontrols business (the U.S. Industrial Hydraulics Business)
of International Motion Control Inc., (IMC), an unrelated third
party. The purchase price was $48,600. The U.S. Industrial
Hydraulics Business, which operated under the name Moog Controls
Inc., was spun off by the Company in February 1988. The
acquisition has been accounted for under the purchase method, and
accordingly, the operating results for the U.S. Industrial
Hydraulics Business have been included in the Consolidated
Condensed Statement of Income since the date of acquisition. The
acquisition was principally financed with proceeds from the
Company's U.S. Revolving Credit and Term Loan Facility. The
acquisition resulted in intangible assets of approximately
$37,700, the majority of which are being amortized over 30 years.
In a related transaction, the Company acquired a manufacturing
facility which IMC originally intended for use by the U.S.
Industrial Hydraulics Business. The Company completed the sale
of the building during the second quarter to a third party
resulting in no gain or loss.
3. Inventories
Inventories are stated at the lower of cost or market using the
first-in, first-out (FIFO) method of valuation. Inventories are
comprised of the following:
March 31, September 30,
1997 1996
Raw materials and purchased parts $ 31,634 $30,609
Work in process 61,663 55,789
Finished goods 11,123 12,920
________ _______
$104,420 $99,318
======== =======
<PAGE>
4. Shareholders' Equity
The changes in shareholders' equity for the six months ended March 31, 1997
are summarized as follows:
Number of Shares
----------------
Class A Class B
Preferred Common Common
Amount Shares Stock Stock
------ --------- ------- -------
PREFERRED STOCK
Beginning and end of period $ 100 100,000
-------
COMMON STOCK
Beginning and end of period 9,134 6,629,245 2,504,878
------- --------- ---------
ADDITIONAL PAID-IN CAPITAL
Beginning of period 47,611
Issuance of Treasury shares
at less than cost (10)
-------
End of period 47,601
-------
RETAINED EARNINGS
Beginning of period 74,825
Net earnings 6,218
Preferred stock dividends (5)
-------
End of period 81,038
-------
TREASURY STOCK
Beginning of period (31,803) (5,114) (1,219,050) (936,603)
Treasury stock issued 340 6,150 18,000
Treasury shares acquired (250) (11,200)
------- ------ ----------- ---------
End of period (31,713) (1,224,100) (918,603)
------- ----------- ---------
EQUITY ADJUSTMENTS
Beginning of period 5,377
Foreign currency translation (2,963)
-------
End of period 2,414
-------
LOAN TO SAVINGS AND STOCK
OWNERSHIP PLAN (SSOP)
Beginning of period (501)
Payments received on loan
to SSOP 98
Other (282)
-------
End of period (685)
-------
TOTAL SHAREHOLDERS' -------- -------- ---------- ---------
EQUITY $107,889 94,886 5,405,145 1,586,275
-------- -------- ---------- ---------
<PAGE>
5. Per Share Data
Average common and common equivalent shares outstanding include
254,088 and 245,828 common equivalent shares related to stock
options for the three and six months ended March 31, 1997,
respectively. There were no common equivalent shares included in
the calculation for the same periods in the prior year.
6. Accounting Changes
During the first quarter of fiscal 1997, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of" and SFAS No. 123, "Accounting for
Stock-Based Compensation."
The Company's previous policy on impairment was not materially
different than that prescribed by SFAS No. 121. The adoption of
SFAS No. 121 on October 1, 1996 did not require any impairment to
be recognized for the six months ended March 31, 1997.
As permitted by SFAS No. 123, the Company will continue to apply
its current accounting policy under Accounting Principles Board
Opinion No. 25 with respect to stock-based compensation. The
adoption of SFAS No. 123 on October 1, 1996, therefore, had no
effect on the Company's consolidated financial position or
results of operations for the six months ended March 31, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
On October 26, 1996, the Company acquired the assets of and assumed
certain liabilities related to the industrial hydraulic servocontrols
business (the U.S. Industrial Hydraulics Business) of International Motion
Control Inc., (IMC), an unrelated third party. The purchase price for the
U.S. Industrial Hydraulics Business was $48.6 million. The U.S. Industrial
Hydraulics Business, which operated under the name Moog Controls Inc., was
spun off by the Company in February 1988. The acquisition was accounted for
under the purchase method, and accordingly, the operating results for the
U.S. Industrial Hydraulics Business are included in the Consolidated
Condensed Statement of Income from the date of acquisition. The
acquisition was principally financed with proceeds from the Company's U.S.
Revolving Credit and Term Loan Facility. The acquisition resulted in
intangible assets of approximately $37.7 million, the majority of which are
being amortized over 30 years. In a related transaction, the Company
acquired a manufacturing facility which IMC originally intended for use by
the U.S. Industrial Hydraulics Business. The Company completed the sale of
the building during the second quarter to a third party resulting in no
gain or loss.
For the three months ended March 31, 1997, the Company generated net
earnings of $3.3 million ($.45 per share) on net sales of $109.8 million,
compared with $3.0 million ($.40 per share) on net sales of $106.8 million
in the comparable period of the prior year. For the six months ended March
31, 1997, the Company earned $6.2 million ($.86 per share) on net sales of
$213.7 million, compared with net earnings of $5.4 million ($.70 per share)
on net sales of $200.1 million in the same period in fiscal 1996.
Segment Operating Review Three Months Ended Six Month Ended
(dollars in thousands) March 31, March 31,
1997 1996 1997 1996
---- ---- ---- ----
Sales:
Domestic Controls:
Segment $ 79,847 $ 75,167 $154,586 $142,159
Intersegment (3,132) (3,595) (5,388) (6,998)
--------- --------- --------- ---------
76,715 71,572 149,198 135,161
--------- --------- --------- ---------
International Controls:
Segment 34,877 39,791 68,061 72,951
Intersegment (1,787) (4,541) (3,604) (8,057)
---------- --------- --------- ---------
33,090 35,250 64,457 64,894
---------- --------- --------- ---------
Net Sales $109,805 $106,822 $213,655 $200,055
---------- -------- --------- ---------
Operating profit:
Domestic Controls $ 9,858 $ 8,324 $ 19,353 $ 16,118
International Controls 2,458 2,957 4,963 5,265
Eliminations 55 (340) (161) (846)
---------- --------- --------- ---------
$ 12,371 $ 10,941 $ 24,155 $ 20,537
---------- --------- --------- ---------
<PAGE>
Net earnings:
Domestic Controls $ 2,406 $ 1,844 $ 4,822 $ 3,742
International Controls 806 1,451 1,507 2,203
Eliminations 47 (251) (111) (551)
---------- --------- --------- ---------
$ 3,259 $ 3,044 $ 6,218 $ 5,394
---------- --------- --------- ---------
Backlog:
Domestic Controls $231,561 $202,049
International Controls 40,814 45,211
--------- ---------
$272,375 $247,260
--------- ---------
<PAGE>
Domestic Controls
Domestic Controls net sales increased by 7.2% to $76.7
million in the second quarter of fiscal 1997 as compared with the
same period in the prior year. The increase is primarily
attributable to the aforementioned acquisition of the U.S.
Industrial Hydraulics Business which provided approximately $7.5
million of incremental sales in the second quarter. In addition,
the Domestic Controls segment experienced continued growth in its
commercial aircraft product line and increased volume in controls
for entertainment simulators, which together, helped to partially
offset expected volume declines in military aircraft controls
resulting from lower sales on development programs.
Year-to-date, Domestic Controls net sales increased 10.4% to
$149.2 million. The Domestic Controls segment continues to
benefit from its strategy of generating a greater share of its
revenues from commercial markets. The acquisition of the U.S.
Industrial Hydraulics Business added approximately $12.0 million
to Domestic Controls year-to-date sales, while increased
production rates for commercial aircraft, communication-related
satellites, space propulsion products, as well as entertainment
simulators, more than offset expected volume declines in military
aircraft controls.
Operating profit for the Domestic Controls segment was $9.9
million (12.3% of segment sales) in the second quarter of fiscal
1997, up 18.4% from fiscal 1996 results of $8.3 million (11.1% of
segment sales). The increase is due in part to increased sales
and favorable product mix in the commercial aircraft product line
and the acquisition of the U.S. Industrial Hydraulics Business,
which generated approximately $1.5 million in incremental
operating profit in the second quarter. Although sales declined
within the military aircraft product line, a favorable shift in
product mix resulted in improved operating margins as compared to
a year ago. These increases in operating income were tempered by
increased selling expenses related to activities aimed at
generating increased volume within the commercial aircraft
product line.
For the first half of fiscal 1997, operating profit was up
20.1% to $19.4 million (12.5% of segment sales) compared with
$16.1 million (11.3% of segment sales) in the same period of
fiscal 1997. Increased sales in the commercial aircraft and
communication-related satellite product lines, favorable product
mix in commercial and military aircraft controls and the U.S.
Industrial Hydraulics Business acquisition, which added
approximately $2.0 million of operating profit, accounted for the
improvement. The results for the first half of fiscal 1997
include higher selling expenses associated with sales
opportunities in the commercial aircraft product line.
Backlog for the Domestic Controls segment was $231.6 million
at March 31, 1997 as compared to $205.5 million at September 30,
1996 and $202.0 million at March 31, 1996. The increase from a
year ago is due to growth in orders in the commercial aircraft,
missile systems and entertainment simulation product lines and
<PAGE>
the acquisition of the U.S. Industrial Hydraulics Business.
Backlog consists of that portion of open orders for which sales
are expected to be recognized over the next twelve months.
International Controls
Net sales in the International Controls segment decreased
6.1% to $33.1 million in the second quarter of fiscal 1997 as
compared to a year ago. The decline is due primarily to the
strengthening of the U.S. dollar against certain foreign
currencies, particularly the German Mark and the Japanese Yen.
Excluding the effect of changing currency values, current quarter
sales of the International Controls segment were level with the
same period last year. Increased demand for military aircraft
controls and industrial electric controls in Europe was offset by
volume declines for industrial hydraulics in the United Kingdom.
This decline was due primarily to shifts in delivery schedules
resulting in unusually high sales in the second quarter of fiscal
1996.
Year-to-date, sales of the International Controls segment
of $64.5 million approximated fiscal 1996 levels despite
unfavorable currency movements. Sales improvements associated
with increased demand for industrial hydraulics in certain
Pacific Rim countries and military aircraft and industrial
electric controls in Europe were offset by unfavorable currency
movements. Excluding the impact of changes in currency values,
sales for the first six months of fiscal 1997 increased
approximately 5% over last year.
International Controls second quarter operating profit
decreased 16.9% to $2.5 million (7.0% of segment sales) as
compared to $3.0 million (7.4% of segment sales) a year ago. The
decline is due primarily to the aforementioned decrease in sales.
The operating margin was negatively affected during the quarter
by the movement of certain currencies in European countries where
the Company's products are manufactured relative to currency
changes in the countries where the products are sold. In
addition, the decline in operating margin can be attributed to
unfavorable changes in product mix in Germany, specifically, a
temporary shift away from higher margin industrial hydraulic
products to lower margin industrial electric controls.
For the first six months of fiscal 1997, operating income
was $5.0 million (7.3% of segment sales) compared to $5.3 million
(7.2% of segment sales). The decrease is due principally to the
aforementioned changes in foreign currency values and unfavorable
product mix in Germany, partially offset by improved margins in
the industrial hydraulics product line in certain Pacific Rim
countries.
Backlog at March 31, 1997 for the International Controls
segment was $40.8 million compared to $37.8 million at September
30, 1996 and $45.2 million at March 31, 1996. The decline from a
year ago was primarily attributable to lower relative currency
values in certain European and Pacific Rim countries.
<PAGE>
Non-Operating Review
Interest expense increased by $1.5 million to $5.8 million
in the second quarter of fiscal 1997 and $2.9 million to $11.2
million for the six months ended March 31, 1997. The increases
are due primarily to additional indebtedness outstanding in
connection with the aforementioned acquisition of the U.S.
Industrial Hydraulics Business. To a lesser extent, the
increases are due to a recapitalization initiated by the Company
in May 1996, which included the issuance of $120 million Senior
Subordinated Notes, the repayment of certain existing
indebtedness, and the purchasing of 714,600 Class A common
shares. The recapitalization enhanced the Company's long-term
capital base and provided additional senior debt capacity to fund
growth, while having the effect of increasing the Company's
average interest rate.
The effective tax rate for the three and six months ended
March 31, 1997 were 27.8% and 28.9%, respectively. The current
year rates reflect anticipated benefits resulting from
distributions of earnings from the Company's German subsidiary
and tax incentives associated with U.S. export sales, partially
offset by increased tax expense related to the current year
earnings of the German operations which are now fully taxable.
Effective October 1, 1996, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of," and SFAS No. 123, "Accounting for Stock-Based
Compensation." The adoption of these standards had no effect on
the Company's consolidated financial position or results of
operations for the six months ended March 31, 1997.
Financial Condition and Liquidity
Cash provided by operating activities was $11.5 million in
the first half of fiscal 1997 compared to $8.8 million last year.
The increase in cash provided is due to increased earnings and
improved working capital management.
Long-term senior debt increased from September 30, 1996 by
$39.6 million to $116.9 million at March 31, 1997 primarily due
to the acquisition of the U.S. Industrial Hydraulics Business,
which was principally financed with proceeds from the Company's
U.S. Revolving Credit and Term Loan Facility. The percentage of
long-term debt to capitalization at March 31, 1997 was 68.7% as
compared to 65.3% at September 30, 1996.
Available credit facilities at March 31, 1997 were $74.2
million, along with cash and cash equivalents of $7.0 million.
Management believes that Moog's credit facilities and cash flow
from operations will continue to be sufficient to meet its near-
term operating needs.
Working capital at March 31, 1997 was $191.2 million
compared with $188.0 million at September 30, 1996. The current
ratio was 3.1 at March 31, 1997 compared to 2.9 at September 30,
1996. The increase is due essentially to the acquisition of the
<PAGE>
U.S. Industrial Hydraulics Business, offset in part, by
unfavorable movements in foreign currency exchange rates.
Property, plant and equipment increased $2.9 million to
$134.3 million at March 31, 1997 due to the acquisition of the
U.S. Industrial Hydraulics Business. Capital expenditures for
the first six months of fiscal 1997 were $6.6 million compared to
$5.4 million last year, and depreciation and amortization were
$10.7 million and $9.9 million, respectively, for the same
periods. Capital expenditures for fiscal 1997 should approximate
$18 million.
Intangible assets increased $35.9 million from September 30,
1996 primarily resulting from the acquisition of the U.S.
Industrial Hydraulics Business.
Cautionary Statement
Forward looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act
of 1995. Statements under the "Outlook" heading are considered
forward looking statements that relate to future operating
periods and are subject to important risks and uncertainties that
could cause actual results to differ materially. These risks and
uncertainties include, but are not limited to, contracting with
various governments, changes in economic conditions, demand for
the Company's products, pricing pressures, intense competition in
the industries in which the Company operates, the need for the
Company to keep pace with technological developments and timely
response to changes in customer needs, and other factors
identified in the Company's Securities and Exchange Commission
filings including the Company's most recent Annual Report on Form
10-K for the fiscal year ended September 30, 1996 and its
Quarterly Report on Form 10-Q for the quarter ended December 31,
1996.
Outlook
The Company believes the Domestic Controls segment is well
positioned to benefit from the rapid growth forecasted in the
commercial aircraft and communication-related satellite markets
and continues its strategy of generating a greater share of its
revenues from commercial markets. Growth in incoming orders for
industrial hydraulics and entertainment simulation will add to
fiscal 1997 revenues. Although military aircraft revenues have
declined, the Company believes operating margins in this product
line will remain strong as a result of favorable product mix.
While its integration continues, the recently acquired U.S.
Industrial Hydraulics Business made a positive contribution to
earnings.
Excluding the impact of currency movements, increased sales
of military aircraft controls in Europe and industrial hydraulic
products in the Pacific Rim region offset industrial hydraulics
sales declines in Europe. The Company believes its operating
performance will benefit from the International Controls
segment's geographic and product line diversity.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security
Holders.
At the Company's Annual Meeting of
Shareholders held on February 12, 1997, the
nominees to the Board of Directors were re-
elected based upon the following results.
Withheld
Nominee For Authority
Class B
Richard A. Aubrecht 1,387,775 9,976
John D. Hendrick 1,382,644 15,107
Class A
Peter P. Poth 4,838,159 24,550
In addition, KPMG Peat Marwick was ratified
to continue as auditors based upon the
following votes: Class A: For, 4,850,997;
Against, 6,914; Abstain, 4,798; Class B: For
1,382,289; Against, 3,014; Abstain, 7,300.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits.
Exhibit 27 - Financial data schedule.
b. Reports on Form 8-K.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
Moog Inc.
___________________________________
(Registrant)
Date: May 12, 1997 By/S/Robert R. Banta
Robert R. Banta
Executive Vice President
Chief Financial Officer
(Principal Financial Officer)
Date: May 12, 1997 By/S/Donald R. Fishback
Donald R. Fishback
Controller
(Principal Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,967
<SECURITIES> 0
<RECEIVABLES> 151,094
<ALLOWANCES> 0
<INVENTORY> 104,420
<CURRENT-ASSETS> 284,369
<PP&E> 134,290
<DEPRECIATION> 0
<TOTAL-ASSETS> 484,634
<CURRENT-LIABILITIES> 93,144
<BONDS> 236,915
0
100
<COMMON> 56,735
<OTHER-SE> 51,054
<TOTAL-LIABILITY-AND-EQUITY> 484,634
<SALES> 213,655
<TOTAL-REVENUES> 214,561
<CGS> 145,601
<TOTAL-COSTS> 145,601
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</TABLE>
