MOOG INC

Previous wording

Under ASC 606, 63% of revenue was recognized over time for the quarter ended December 30, 2023, using the cost-to-cost method of accounting. The over-time method of revenue recognition is predominantly used in Space and Defense, Military Aircraft and Commercial Aircraft. We use this method for U.S. Government contracts and repair and overhaul arrangements as we are creating or enhancing assets that the customer controls. In addition, many of our large commercial contracts qualify for over-time accounting as our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed to date.

Current wording

Under ASC 606, 64% of revenue was recognized over time for the quarter ended March 30, 2024, using the cost-to-cost method of accounting. The over-time method of revenue recognition is predominantly used in Space and Defense, Military Aircraft and Commercial Aircraft. We use this method for U.S. Government contracts and repair and overhaul arrangements as we are creating or enhancing assets that the customer controls. In addition, many of our large commercial contracts qualify for over-time accounting as our performance does not create an asset with an alternative use and we have an enforceable right to payment for performance completed to date.

Previous wording

For the quarter ended December 30, 2023, 37% of revenue was recognized at the point in time control transferred to the customer. This method of revenue recognition is used most frequently in Industrial. We use this method for commercial contracts in which the asset being created has an alternative use. We determine the point in time control transfers to the customer by weighing the five indicators provided by ASC 606. When control has transferred to the customer, profit is generated as cost of sales is recorded and as revenue is recognized.

Current wording

For the quarter ended March 30, 2024, 36% of revenue was recognized at the point in time control transferred to the customer. This method of revenue recognition is used most frequently in Industrial. We use this method for commercial contracts in which the asset being created has an alternative use. We determine the point in time control transfers to the customer by weighing the five indicators provided by ASC 606. When control has transferred to the customer, profit is generated as cost of sales is recorded and as revenue is recognized.

Previous wording

Our fundamental long-term strategies that will help us achieve our financial objectives center around pricing and simplification initiatives. Our pricing initiatives focus on receiving fair recognition for the value we deliver to our customers across all of our markets. Our simplification initiatives include:

Current wording

Our fundamental long-term strategies that will help us achieve our financial objectives center around pricing and simplification initiatives. Our pricing initiatives focus on receiving recognition for the value we deliver to our customers across all of our markets. Our simplification initiatives include:

Previous wording

On October 20, 2023, we acquired Data Collection Limited ("DCL") based in Auckland, New Zealand for a purchase price, net of acquired cash, of $6 million, consisting of $5 million in cash and a working capital adjustment to be paid of approximately $1 million. DCL specializes in manufacturing and operating pavement surveying equipment and providing innovative solutions for measuring and managing pavements. This operation is included in our Military Aircraft segment. The purchase price allocation is subject to adjustments as we obtain additional information for our estimates during the measurement period.

Current wording

On October 20, 2023, we acquired Data Collection Limited ("DCL") based in Auckland, New Zealand for a purchase price, net of acquired cash, of $6 million. DCL specializes in manufacturing and operating pavement surveying equipment and providing innovative solutions for measuring and managing pavements. This operation is included in our Military Aircraft segment. The purchase price allocation is subject to adjustments as we obtain additional information for our estimates during the measurement period.

Previous wording

Net sales increased across all of our segments in the first quarter of 2024 compared to the first quarter of 2023 due to the continued commercial aircraft recovery and due to higher product demand across all segments.

Current wording

Net sales increased across all of our segments in the second quarter and in the first half of 2024 compared to the second quarter and the first half of 2023.

Previous wording

Research and development expenses in the first quarter of 2024 increased compared to the same period of 2023. Higher activity supporting our new growth programs in both Space and Defense and Industrial drove the increase.

Current wording

Research and development expenses in the first half of 2024 increased compared to the same period of 2023. Activity supporting our new growth programs in both Space and Defense and in Industrial increased research and development expense $11 million, and was partially offset by a $3 million reduction in Military Aircraft.

Previous wording

Selling, general and administrative expenses as a percentage of sales decreased in the first quarter of 2024 compared to the first quarter of 2023, reflecting the incremental benefit of higher sales volume.

Current wording

Selling, general and administrative expenses as a percentage of sales decreased in the second quarter and in the first half of 2024 compared to the second quarter and the first half of 2023, reflecting the higher sales volume.

Previous wording

The twelve-month backlog increased in the first quarter of 2024 compared with the first quarter of 2023. Within Space and Defense, we had higher orders across our satellite and launch vehicle programs, as well as across our defense programs. We also had higher orders across our Military Aircraft programs including the F-35 and various funded development programs. Partially offsetting these increases was a decline in Industrial's twelve-month backlog due to lower orders across our industrial automation programs.

Current wording

Twelve-month backlog increased in the second quarter of 2024 compared with the second quarter of 2023. Within Commercial Aircraft, we had higher orders in our aftermarket and OEM programs. In Space and Defense, we had higher orders for our new space vehicle programs, as well as across our U.S. and European defense programs. In Military Aircraft, we also had higher orders across various legacy programs as well as for the F-35 program. Partially offsetting these increases was a decline in Industrial's twelve-month backlog due to lower orders across our industrial automation and our medical device programs.

Previous wording

Operating profit, as presented below, is net sales less cost of sales and other operating expenses, excluding interest expense, equity-based compensation expense, non-service pension expense and other corporate expenses. Cost of sales and other operating expenses are directly identifiable to the respective segment or allocated on the basis of sales, manpower or profit. Operating profit is reconciled to earnings before income taxes in Note 20 - Segments in the Notes to Consolidated Condensed Financial Statements included in this report.

Current wording

Operating profit, as presented below, is net sales less cost of sales and other operating expenses, excluding interest expense, equity-based compensation expense, non-service pension expense and other corporate expenses. Cost of sales and other operating expenses are directly identifiable to the respective segment or allocated on the basis of sales, headcount or profit. Operating profit is reconciled to earnings before income taxes in Note 20 - Segments in the Notes to Consolidated Condensed Financial Statements included in this report.

Previous wording

Space and Defense net sales increased in the first quarter of 2024 compared to the first quarter of 2023 driven by higher demand for both defense and space applications.

Current wording

Space and Defense net sales increased in the second quarter and in the first half of 2024 compared to the second quarter and the first half of 2023 driven primarily by higher demand for defense applications.

Previous wording

In the first quarter of 2024, sales increased $9 million in our defense programs and $4 million in our space programs. Within our defense market, higher demand across most of our defense programs, including new defense pursuits, increased sales.

Current wording

In the second quarter of 2024, sales increased $19 million in our defense programs and $2 million in our space programs. Within our defense market, the ramp of new defense pursuits serving European needs, as well as emerging U.S. defense priorities, increased sales. We also had higher demand for our defense components products. Within our space market, higher activity for launch vehicles was partially offset by lower activity across our space vehicle programs.

Previous wording

Operating margin increased in the first quarter of 2024 compared to the first quarter of 2023. We benefited from production efficiencies associated with the higher sales volume. Also, benefits from our pricing initiatives increased operating margin. Partially offsetting the increase was $3 million of higher research and development expense associated with activity on new growth programs.

Current wording

Operating margin increased in the second quarter and in the first half of 2024 compared to the same periods of 2023. The increases are associated with improved performance on space vehicle programs and the benefit associated with the Employee Retention Credit. Also, the benefits of our pricing initiatives and the profit associated with the higher sales volume more than offset higher research and development expense associated with activity on new growth programs.

Previous wording

Military Aircraft net sales increased in the first quarter of 2024 compared to the first quarter of 2023 due to expanding demand in our OEM programs.

Current wording

Military Aircraft net sales increased in the second quarter and in the first half of 2024 compared to the second quarter and the first half of 2023.

Previous wording

In the first quarter of 2024, military OEM sales increased $9 million. A higher amount of activity on the V-280 program drove the sales growth. Higher production sales on the F-35 program was offset by lower amounts of funded development program activity.

Current wording

In the second quarter of 2024 compared to the second quarter of 2023, military OEM sales increased $15 million and military aftermarket sales increased $5 million. The ramp-up of activity continued on the FLRAA program, which increased OEM sales compared to the second quarter of 2023. Also, higher production sales on the F-35 program was mostly offset by lower amounts of funded development program activity. In military aftermarket, sales increased due to the sale of a mature product line as part of our simplification efforts.

Previous wording

Operating margin increased in the first quarter of 2024 compared to the first quarter of 2023. The increased activity on the V-280 program, as we approached full staffing levels, as well as a more favorable sales mix, increased operating margin.

Current wording

Operating margin increased in the first half of 2024 compared to the first half of 2023. In addition to the factors in the second quarter, we also benefited from increased activity on the FLRAA program as we achieved full staffing levels, and we benefited from a more favorable sales mix.

Previous wording

Commercial Aircraft net sales increased in the first quarter of 2024 compared to the first quarter of 2023 due to the market recoveries across all of our programs.

Current wording

Commercial Aircraft net sales increased in the second quarter and in the first half of 2024 compared to the second quarter and the first half of 2023 driven by the continued market demand for our widebody and other programs.

Previous wording

Operating margin decreased in the first quarter of 2024 compared to the first quarter of 2023, as favorable retrofit activity from last year did not repeat, offsetting the benefits of our pricing initiatives.

Current wording

Operating margin increased in the first half of 2024 compared to the first half of 2023 due largely to the same factors as the second quarter. Partially offsetting the operating margin is the absence of favorable retrofit activity from last year.

Previous wording

2024 Outlook –We expect higher sales in 2024, driven by the continued market recovery in our aerospace and defense markets. However in Industrial, an anticipated slowdown of orders will reduce sales. We also expect operating margin will increase due to the continued benefits of our pricing and simplification initiatives. Partially offsetting the incremental profit is expected higher interest expense and a higher tax rate. We expect adjusted diluted earnings per share will range between $6.70 and $7.10, with a midpoint of $6.90. Management believes that the adjusted outlook may be useful in evaluating the financial condition and results of operations of the Company

Current wording

2024 Outlook –We expect higher sales in 2024, driven by the continued growth in our aerospace and defense markets. However in Industrial, a slowdown of orders will reduce sales. We also expect operating margin will increase due to the continued benefits of our pricing and simplification initiatives, as well as the Employee Retention Credit. Partially offsetting the incremental profit is expected higher interest expense and a higher tax rate. Excluding the impairment and restructuring charges in the first half of 2024, we expect adjusted diluted earnings per share will range between $7.05 and $7.45, with a midpoint of $7.25. Management believes that the adjusted outlook may be useful in evaluating the financial condition and results of operations of the Company.

Previous wording

2024 Outlook for Space and Defense – In 2024, we expect sales growth across both of our space and defense markets, primarily driven by the increased investment in defense spending. We expect operating margin will increase due to the absence of the prior year's charges associated with our space vehicle programs, and due to the benefits of our pricing initiatives.

Current wording

2024 Outlook for Space and Defense – In 2024, we expect sales growth across both of our space and defense markets, primarily driven by the increased investment in defense spending in the U.S and in Europe. We expect operating margin will increase due to improved performance in our space vehicle programs and the benefit of the Employee Retention Credit.

Previous wording

2024 Outlook for Military Aircraft –In 2024, we expect sales growth in our OEM programs, in particular sales for the V-280 program. Partially offsetting the increase is an expected sales decline in military aftermarket programs as defense funding shifts from legacy refurbishments to product modernization. We expect operating margin will increase due to having a full year of activity on the V-280 program, and due to lower amounts of charges associated with funded development contracts which are winding down.

Current wording

2024 Outlook for Military Aircraft –In 2024, we expect sales growth in our OEM programs, in particular sales for the FLRAA program. We expect operating margin will increase due to having a full year of activity on the FLRAA program, the lower amounts of charges associated with funded development contracts which are winding down and the benefit from the sale of a mature product line. Partially offsetting the increase in operating margin are the higher amounts of impairment and restructuring charges in 2024 compared to 2023.

Previous wording

2024 Outlook for Commercial Aircraft –In 2024, we expect sales growth from our widebody OEM programs as build rates continue to ramp. However, we expect lower sales in commercial aftermarket as the prior year's retrofit activity won't repeat, which will also reduce our operating margin in 2024.

Current wording

2024 Outlook for Commercial Aircraft –In 2024, we expect sales growth from our widebody OEM and aftermarket programs as build rates continue to ramp and as airlines increase their spares demand. We expect operating margin will decrease due to an unfavorable sales mix from higher amounts of lower margin OEM sales and as the prior year's favorable retrofit sales will not repeat.

Previous wording

2024 Outlook for Industrial –In 2024, we expect a decrease in sales due to lower orders in our industrial automation market consistent with macroeconomic indicators for capital spending. We also expect a sales decrease associated with the lost sales associated with our footprint and portfolio initiatives. We expect operating margin will increase due to the benefits of our pricing initiatives and the savings from our simplified operations.

Current wording

2024 Outlook for Industrial –In 2024, we expect a decrease in sales in our industrial automation market consistent with the reduction in incoming orders. We expect operating margin will increase due to the benefits of our pricing initiatives, the savings from our simplified operations and the benefit of the Employee Retention Credit.

Previous wording

Net cash provided by operating activities in the first quarter of 2024 increased compared to the first quarter of 2023. Accounts receivable provided $86 million more of cash, driven by strong collections, primarily in our aircraft segments. Also, accounts receivable increased $25 million due to the expansion of our Receivables Purchase Agreement. Partially offsetting the source of cash was inventories and unbilled receivables, which combined used $27 million more of cash, as our aerospace and defense segments grew inventory to support the business growth.

Current wording

Net cash from operating activities increased in the first half of 2024 compared to the first half of 2023. Accounts receivable provided $28 million more of cash, primarily due to the expansion of our Receivables Purchase Agreement by $25 million. Also, net earnings provided more cash. Partially offsetting these sources of cash were unbilled receivables and inventory, which together, used $25 million more of cash, driven primarily by Commercial Aircraft's business growth.

Previous wording

Net cash used by investing activities in the first quarter of 2024 included $37 million of capital expenditures and $5 million associated with the acquisition of DCL.

Current wording

Net cash used by investing activities in the first half of 2024 included $78 million of capital expenditures and $6 million associated with the acquisition of DCL.

Previous wording

Net cash used by investing activities in the first quarter of 2023 included $30 million of capital expenditures, which was partially offset by the proceeds from the sale of a building.

Current wording

Net cash used by investing activities in the first half of 2023 included $90 million of capital expenditures, including a $28 million building purchase, as we continue to prioritize internal investments to support core business growth. The first half of 2023 also included $20 million of proceeds from the sales of buildings and businesses.

Previous wording

Net cash provided by financing activities in the first quarter of 2024 included $57 million of net borrowings on our credit facilities. Financing activities also included $9 million of cash dividends.

Current wording

Net cash provided by financing activities in the first half of 2024 included $85 million of net borrowings on our credit facilities. Financing activities also included $18 million of cash dividends.

Previous wording

Net cash provided by financing activities in the first quarter of 2023 included $81 million of net borrowings on our credit facilities. Additionally, financing activities included $8 million of share repurchases and an additional $8 million of cash dividends.

Current wording

Net cash provided by financing activities in the first half of 2023 included $122 million of net borrowings on our credit facilities. Additionally, financing activities used $17 million of cash for dividend payments and $8 million for share repurchases.

Previous wording

At December 30, 2023, our cash balances were $127 million, which includes $106 million held outside of the U.S. by foreign operations. We regularly assess our cash needs, including repatriation of foreign earnings which may be subject to regulatory approvals and withholding taxes, where applicable by law.

Current wording

At March 30, 2024, our cash balances were $60 million, all of which was held outside of the U.S. by foreign operations. We regularly assess our cash needs, including repatriation of foreign earnings which may be subject to regulatory approvals and withholding taxes, where applicable by law.

Previous wording

Our U.S. revolving credit facility, which matures on October 27, 2027, has a capacity of $1.1 billion and also provides an expansion option, which permits us to request an increase of up to $400 million to the credit facility upon satisfaction of certain conditions. The weighted-average interest rate on the majority of the outstanding credit facility borrowings was 6.84% and is principally based on SOFR plus the applicable margin, which was 1.60% at December 30, 2023.

Current wording

Our U.S. revolving credit facility, which matures on October 27, 2027, has a capacity of $1.1 billion and also provides an expansion option, which permits us to request an increase of up to $400 million to the credit facility upon satisfaction of certain conditions. The weighted-average interest rate on the majority of the outstanding credit facility borrowings was 6.85% and is principally based on SOFR plus the applicable margin, which was 1.60% at March 30, 2024.

Previous wording

The SECT has a revolving credit facility with a borrowing capacity of $35 million, maturing on October 26, 2025. Interest was 7.58% as of December 30, 2023 and is based on SOFR plus a margin of 2.23%.

Current wording

The SECT has a revolving credit facility with a borrowing capacity of $35 million, maturing on October 26, 2025. Interest was 7.56% as of March 30, 2024 and is based on SOFR plus a margin of 2.23%.

Previous wording

At December 30, 2023, we had $656 million of unused capacity, including $622 million from the U.S. revolving credit facility after considering standby letters of credit and other limitations.

Current wording

At March 30, 2024, we had $679 million of unused capacity, including $646 million from the U.S. revolving credit facility after considering standby letters of credit and other limitations.

Previous wording

Our Receivables Purchase Agreement, which matures on December 11, 2026, allows the Receivables Subsidiary to sell receivables to the Purchasers in amounts up to a $125 million limit so long as certain conditions are satisfied. The receivables are sold to the Purchasers in consideration for the Purchasers making payments of cash. Each Purchaser’s share of capital accrues yield at a variable rate plus an applicable margin, which totaled 6.35% as of December 30, 2023.

Current wording

Our Receivables Purchase Agreement, which matures on December 11, 2026, allows the Receivables Subsidiary to sell receivables to the Purchasers in amounts up to a $125 million limit so long as certain conditions are satisfied. The receivables are sold to the Purchasers in consideration for the Purchasers making payments of cash. Each Purchaser’s share of capital accrues yield at a variable rate plus an applicable margin, which totaled 6.38% as of March 30, 2024.

Previous wording

Our aerospace and defense businesses represented 70% of our 2023 sales. Within the defense market, our programs are directly affected by funding levels, which has recently increased. Our commercial aircraft market, which represented less than 20% of our 2023 sales, is aligning with our customers' growing demand. While domestic travel has recovered, global international travel remains slightly below pre-pandemic levels.

Current wording

Our aerospace and defense businesses represented 70% of our 2023 sales. Within the defense market, our programs are directly affected by funding levels, which has recently increased. Our commercial aircraft market, which represented 20% of our 2023 sales, is aligning with our customers' growing demand. While domestic travel has recovered, global international travel remains slightly below pre-pandemic levels.

Previous wording

The defense market is dependent on military spending for development and production programs. We have a growing development program order book for future generation aircraft and turret programs, and we strive to embed our technologies within these high-performance military programs of the future, including the Textron Bell V-280 Valor. Aircraft production programs are typically long-term in nature, offering predictable capacity needs and future revenues. We maintain positions on numerous high priority programs, including the Lockheed Martin F-35 Lightning II. The large installed base of our products leads to attractive aftermarket sales and service opportunities. The tactical and strategic missile, missile defense and defense controls markets are dependent on many of the same market conditions as military aircraft, including overall military spending and program funding levels. At times when there are perceived threats to national security, U.S. defense spending can increase; at other times, defense spending can decrease. Future levels of defense spending have increased in the near-term given the current global tensions, and are subject to presidential and congressional approval.

Current wording

The defense market is dependent on military spending for development and production programs. We have a growing development program order book for future generation aircraft and turret programs, and we strive to embed our technologies within these high-performance military programs of the future, including the Textron Bell FLRAA. Aircraft production programs are typically long-term in nature, offering predictable capacity needs and future revenues. We maintain positions on numerous high priority programs, including the Lockheed Martin F-35 Lightning II. The large installed base of our products leads to attractive aftermarket sales and service opportunities. The tactical and strategic missile, missile defense and defense controls markets are dependent on many of the same market conditions as military aircraft, including overall military spending and program funding levels. At times when there are perceived threats to national security, U.S. defense spending can increase; at other times, defense spending can decrease. Future levels of defense spending have increased in the near-term given the current global tensions, and are subject to presidential and congressional approval.

Previous wording

The commercial OEM aircraft market has depended on a number of factors, including both the last decade's increasing global demand for air travel and increasing fuel prices. Both factors contributed to the demand for new, more fuel-efficient aircraft with lower operating costs that led to large production backlogs for Boeing and Airbus. Domestic air travel has recovered from the impact of the COVID-19 pandemic, and international travel utilizing primarily widebody aircraft is close to 2019 levels. We believe Boeing and Airbus will continue to increase their widebody aircraft production rates with the post-pandemic air traffic volumes, which affects our demand for our flight control systems.

Current wording

The commercial OEM aircraft market has depended on a number of factors, including both the last decade's increasing global demand for air travel and increasing fuel prices. Both factors contributed to the demand for new, more fuel-efficient aircraft with lower operating costs that led to large production backlogs for Boeing and Airbus. Domestic air travel has recovered from the impact of the COVID-19 pandemic, and international travel utilizing primarily widebody aircraft is close to 2019 levels. Boeing and Airbus continue to increase their widebody aircraft production rates with the post-pandemic air traffic volumes, and any adjustments to their ramp schedules affects the demand for our flight control systems.

Previous wording

The commercial aftermarket is driven by usage and the age of the existing aircraft fleet for passenger and cargo aircraft, which drives the need for maintenance and repairs. We have seen a recovery in the demand volume for our maintenance services and spare parts after the COVID-19 pandemic. During the pandemic, there were very few new A350 and 787 entries into service. These delays had subsequent impacts on our aftermarket revenue, as sales are generated after the warranty period. Therefore, we expect aftermarket sales growth to be modest over the next few years.

Current wording

The commercial aftermarket is driven by usage and the age of the existing aircraft fleet for passenger and cargo aircraft, which drives the need for maintenance and repairs. We have seen a recovery in the demand volume for our maintenance services and spare parts after the COVID-19 pandemic. Since there were very few new A350 and 787 entries into service during the pandemic, our sales that are generated after the warranty period were delayed. However, the recent surge in demand for spares and repairs, driven by increased fleet utilization and limited availability of new aircraft, is increasing our aftermarket activity.

Previous wording

We are affected by the movement of foreign currencies compared to the U.S. dollar, particularly in Industrial, Military Aircraft and Commercial Aircraft. About one-sixth of our 2023 sales were denominated in foreign currencies. During the first three months of 2024, average foreign currency rates generally strengthened against the U.S. dollar compared to 2023. The translation of the results of our foreign subsidiaries into U.S. dollars increased sales by $6 million compared to the same period one year ago.

Current wording

We are affected by the movement of foreign currencies compared to the U.S. dollar, particularly in Industrial, Military Aircraft and Commercial Aircraft. About one-sixth of our 2023 sales were denominated in foreign currencies. During the first six months of 2024, average foreign currency rates generally strengthened against the U.S. dollar compared to 2023. The translation of the results of our foreign subsidiaries into U.S. dollars increased sales by $5 million compared to the same period one year ago.

Previous wording

Information included or incorporated by reference in this report that does not consist of historical facts, including statements accompanied by or containing words such as “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “approximate,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume” and “assume,” are forward-looking statements. Such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are not guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements. In evaluating these forward-looking statements, you should carefully consider the factors set forth below.

Current wording

Information included or incorporated by reference in this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which can be identified by words such as: “may,” “will,” “should,” “believes,” “expects,” “expected,” “intends,” “plans,” “projects,” “approximate,” “estimates,” “predicts,” “potential,” “outlook,” “forecast,” “anticipates,” “presume,” “assume” and other words and terms of similar meaning (including their negative counterparts or other various or comparable terminology). These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995, are neither historical facts nor guarantees of future performance and are subject to several factors, risks and uncertainties, the impact or occurrence of which could cause actual results to differ materially from the expected results described in the forward-looking statements.

Previous wording

Although it is not possible to create a comprehensive list of all factors that may cause actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties that arise from time to time are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the SEC and include the following:

Current wording

Although it is not possible to create a comprehensive list of all factors that may cause our actual results to differ from the results expressed or implied by our forward-looking statements or that may affect our future results, some of these factors and other risks and uncertainties are described in Item 1A “Risk Factors” of our Annual Report on Form 10-K and in our other periodic filings with the Securities and Exchange Commission (“SEC”) and include, but are not limited to, risks relating to: (i) our operation in highly competitive markets with competitors who may have greater resources than we possess; (ii) our operation in cyclical markets that are sensitive to domestic and foreign economic conditions and events; (iii) our heavy dependence on government contracts that may not be fully funded or may be terminated; (iv) supply chain constraints and inflationary impacts on prices for raw materials and components used in our products; (v) failure of our subcontractors or suppliers to perform their contractual obligations; and (vi) our accounting estimations for over-time contracts and any changes we need to make thereto. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

Previous wording

While we believe we have identified and discussed above the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial that may affect the forward-looking statements made herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this report, except as required by law.

Current wording

While we believe we have identified and discussed in our SEC filings the material risks affecting our business, there may be additional factors, risks and uncertainties not currently known to us or that we currently consider immaterial that may affect the forward-looking statements we make herein. Given these factors, risks and uncertainties, investors should not place undue reliance on forward-looking statements as predictive of future results. Any forward-looking statement speaks only as of the date on which it is made, and we disclaim any obligation to update any forward-looking statement made in this report, except as required by applicable law.