John R. Scannell, Chairman and CEO of Moog (MOG.A, MOG.B) spoke Wednesday morning at the Cowen & Co. 35th Annual Aerospace/Defense & Transportation Conference at the InterContinental New York Barclay in New York City. The presentation also included CFO Don Fishback and can be heard here.
Scannell says Moog is the world leader in customized, high-performance control systems and components. Moog has a long-term, consistent growth record and continues to move to increase shareholder value.
CFO Fishback noted Moog has averaged 6% annually growth over the last decade and a half, with total growth including acquisition of about 12%. This year, however, the company will experience about 1% growth, much of which is acquisition-driven.
Acquisitions by Moog have been soft over the last year as part of an effort to make sure the acquisitions deliver. The company is being more selective in making strategic acquisitions to complement organic growth.
Moog’s capital deployment currently is geared toward a share buyback program of up to 4 million shares over a 12-month period. The company is not currently considering paying a dividend.
Scannell said the China market has been challenging for Moog for the last three to four years. Moog’s other emerging market, Brazil, is doing well.
Moog is continuing its strategic review of the medical portion of the business and considering all options, including a potential sale. The company hopes to announce the results of that review in the next quarter.
Over next 18 months the biggest risk is military spending, particularly the military aftermarket, however opportunity is there if the industrial business improves. Scannell does not see adequate momentum in the global economies for it to pick up, but noted there is real upside in terms of margins and contributions if it does.
To view the presentation on the company website, click here.
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