MOOG TAKES RESTRUCTURING CHARGE
MOOG TAKES RESTRUCTURING CHARGE EAST AURORA, N.Y., Feb. 11 /PRNewswire/ -- Moog Inc.
(NYSE: MOG.A, MOG.B) today reported a net loss for the first fiscal quarter of 1992 of $7.1 million or $.91 per share compared to earnings of $1.8 million or $.23 per share for the first quarter a year ago. The loss is the result of an after-tax charge for future restructuring costs of $7.2 million which the company has taken in response to program terminations, stretchouts, and the lack of new sales opportunities in the current defense budget environment. The restructuring charge includes severance benefits, the expense of relocating people and equipment, and the disposal of certain assets. On an operating basis, the company earned $172,000 or $.02 per share in the first fiscal quarter.
"The post-Soviet defense environment became clear in President Bush's State of the Union address," said Robert T. Brady, Moog Inc. president. "The Administration is pre-empting Congress by either cancelling or slowing down the kind of advanced technology programs in which Moog participates. We have to reshape our company to deal with this reality." Moog Inc. announced it will reduce its workforce in the United States by 500 people, or about 24 percent. As part of that reduction, the company's Engine Controls Division will be transferred from Clearwater, Fla., to East Aurora, N.Y. In addition, Moog will form a new Systems Group which will consolidate its Electronics and Systems, Missile Systems and Space Products Divisions into a combined operation which will share manufacturing facilities and business support infrastructure. The Systems Group will continue to maintain market- focused sales, engineering and assembly and test organizations. "The adjustment in staffing, reorganization and restructuring," Brady said, "will occur throughout most of this fiscal year and will allow us to operate profitably on a smaller base of defense business. "We have made a careful analysis of our workload looking out to 1995," Brady said. "We believe the adjustment that we're about to make will sufficiently reduce our capacity in line with declining U.S. defense procurements. Further adjustments will not be required." Moog expects to emerge from this transition with a much healthier balance of business in industrial automation, commercial airplane controls, satellite propulsion, Space Station activities, foreign military programs, and a smaller volume of U.S. military aircraft, missile and engine work. Consolidated net sales for the first fiscal quarter of $73.0 million were down 7 percent compared with net sales of $78.6 million a year ago. The sales decline was mostly a result of lower sales in the company's subsidiaries in Germany and England, reflecting general recessionary conditions in Europe. Sales were also lower in the company's Engine Controls Division, whose customers, manufacturers of aircraft engines, are attempting to reduce their inventories. Backlog of new orders at Dec. 31, 1991, was $219 million, down from $237 million a year earlier, reflecting the reduction in defense activity and the recession in Europe. Backlog is expected to bottom out at about $200 million. Brady said that he expects the company to return to profitability immediately. "With a reasonable recovery in our overseas industrial business," Brady said, "we expect to earn back most or all of the first quarter loss in the balance of this year." Moog Inc. manufactures precision controls for aerospace, defense and industrial applications. MOOG INC. AND SUBSIDIARIES Consolidated Statements of Earnings (Unaudited) (Dollars in thousands except per share data) Three months ended Dec. 31 1991 1990 Net sales $ 72,966 $ 78,589 Other income 844 1,128 Total 73,810 79,717 Costs and expenses: Cost of sales 53,056 56,251 R&D expenses 4,459 3,787 Selling, general and admin. expenses 12,422 12,573 Interest expense 3,288 3,934 Foreign currency exchange loss 170 154 Other expenses 171 40 Restructuring expense 10,061 -- Total 83,627 76,739 Earnings (loss) before income taxes (9,817) 2,978 Income taxes: Current (1,352) 1,285 Deferred (1,393) (94) Total (2,745) 1,191 Net earnings (loss) $ (7,072) $ 1,787 Net earnings (loss) per common share $ (.91) $ .23 Average common shares outstanding 7,730,676 7,914,872 -0- 2/11/92 /CONTACT: G. V. Boyler of Moog, 716-652-2000/ (MOG) CO: Moog Inc. ST: New York IN: SU: ERN
GK -- NY008 -- 8645 02/11/92 08:23 EST
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|Date:||Feb 11, 1992|
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