MOOG INC
For the period ended Dec 28, 2024. Filed Jan 24, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 28, 2024 · Filed Jan 24, 2025
MOG-A$323.56+4.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-29; filed 2024-08-08.
0000067887-24-000061
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-12-28; filed 2025-01-24.
0000067887-25-000010
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 126 previous paragraphs and 105 current paragraphs.
68 unchanged; 23 reworded; 14 added; 34 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
In 2024, we recorded losses in Asset impairment and fair value adjustment of $15 million related to selling a motors business in the Czech Republic and a hydraulic systems business in Luxembourg that were included in our Industrial segment. As a result, we reclassified $9 million in other current assets and $5 million in accrued liabilities as held for sale at September 28, 2024. We completed the sale of these businesses on September 30, 2024. There has been no significant change to the losses recognized as a result of completing the transactions.
Current report
Net sales increased in the first quarter of 2025 compared to the first quarter of 2024, driven by demand in Commercial Aircraft and by defense market growth in Military Aircraft and Space and Defense. These increases were partially offset by a decrease in Industrial, driven by the lost sales associated with our portfolio shaping activities.
Current report
Gross margin decreased in the first quarter of 2025 compared to the first quarter of 2024, driven by an unfavorable sales mix in Military Aircraft and an out-of-period warranty expense in Commercial Aircraft.
Current report
Research and development expenses decreased in the first quarter of 2025 compared to the first quarter of 2024 due to the timing of activities across our segments.
Current report
As we continue to simplify our operations, the first quarters of 2025 and 2024 both included charges for various restructuring activities, primarily within Industrial.
Current report
The twelve-month backlog in the first quarter of 2025 compared with the first quarter of 2024 was relatively flat. Within Space and Defense, we had higher orders across our satellite programs, as well as across our defense programs. This was partially offset by twelve-month backlog decreases in Industrial and Military Aircraft. The twelve-month backlog in Industrial decreased due to divestitures and weaker foreign currencies. The Military Aircraft twelve-month backlog decrease was due to the unfavorable timing of orders across various OEM programs.
Current report
Operating margin increased in the first quarter of 2025 compared to the first quarter of 2024, driven by sales growth, partially offset by sales mix and investments to prepare for upcoming major programs.
Current report
Operating margin increased in the first quarter of 2025 compared to the first quarter of 2024, driven by the increased activity on the FLRAA program and lower research and development expenses, partially offset by an unfavorable sales mix.
Current report
Commercial Aircraft net sales increased in the first quarter of 2025 compared to the first quarter of 2024 due to increased demand across our OEM and aftermarket programs. In the first quarter of 2025, commercial aftermarket sales increased $15 million, driven by strong repair activity and by initial provisioning of spares. OEM sales increased $11 million, driven by the timing of orderson certain programs.
Current report
Operating margin increased in the first quarter of 2025 compared to the first quarter of 2024, driven by aftermarket sales growth, largely offset by an $8 million out-of-period warranty expense.
Current report
Industrial net sales decreased in the first quarter of 2025 compared to the first quarter of 2024, driven by the lost sales associated with our portfolio shaping activities. In the first quarter of 2025, industrial automation sales decreased $20 million, driven by divestitures and lower demand. Sales also decreased $4 million in energy and $2 million in simulation and test. These decreases were partially offset by a sales increase of $9 million in our medical market due to higher demand for our medical device products.
Current report
Operating margin decreased in the first quarter of 2025 compared to the first quarter of 2024. The first quarters of 2025 and 2024 included $5 million and $2 million, respectively, of restructuring and other charges. Excluding the net impacts of these charges, adjusted operating margins in the first quarter of 2025 and 2024 were 13.2% and 12.6%, respectively. The resulting increase in adjusted operating margin was primarily due to simplification initiatives.
Current report
Consolidated Statements of Cash Flows
Current report
Net cash provided by operating activities in the first quarter of 2025 decreased compared to the first quarter of 2024. Accounts receivable used $122 million more of cash, driven by pressure from strong collections in the fourth quarter of fiscal year 2024. Customer advances used $65 million more of cash, as we worked down advances in Space and Defense and in Military Aircraft.
Removed paragraphs (34)
Previous report
•utilizing 80/20 processes to unlock and capture value,
Previous report
On September 30, 2022, we sold a sonar business based in the United Kingdom previously included in our Industrial segment. We have cumulatively received net proceeds of $15 million and recorded a loss of $15 million, net of transaction costs.
Previous report
On December 3, 2021, we sold the assets of our Navigation Aids ("NAVAIDS") business based in Salt Lake City, Utah previously included in our Military Aircraft segment to Thales USA Inc. We have cumulatively received net proceeds of $37 million and recorded a gain of $15 million, net of transaction costs. The transaction is subject to adjustments associated with amounts currently held in escrow.
Previous report
Net sales increased in the third quarter and in the first three quarters of 2024 compared to the same periods of 2023, driven by product demand in Military Aircraft and Space and Defense, and by production ramps in Commercial Aircraft. Sales in Industrial decreased in the third quarter of 2024 but increased in the first three quarters of 2024 compared to the same periods of 2023.
Previous report
Gross margin increased in the third quarter of 2024 compared to the third quarter of 2023, driven by improved performance on our space vehicle development programs in Space and Defense and a favorable sales mix in Commercial Aircraft. Gross margin also increased in the first three quarters of 2024 compared to the first three quarters of 2023. In the second quarter of 2024, we benefited $14 million from the Employee Retention Credit associated with the CARES Act. In addition, in the first three quarters of 2024, improved performance on our space vehicle development programs and the results of our pricing and simplification initiatives across all of our segments increased gross margin.
Previous report
Research and development expenses were higher through the first three quarters of 2024 compared to the same periods of 2023. Activities supporting our new growth programs in Space and Defense and Industrial were partially offset by a reduction in Military Aircraft.
Previous report
Selling, general and administrative expenses as a percentage of sales decreased in the third quarter and in the first three quarters of 2024 compared to the same periods of 2023, reflecting the higher sales volume.
Previous report
Interest expense increased in the first three quarters of 2024 compared to the first three quarters of 2023 due to higher rates on outstanding debt balances, as well as higher debt balances.
Previous report
In the third quarter of 2024, we incurred $6 million of restructuring charges, an inventory write-down and other charges, primarily in Industrial. In the third quarter of 2023, we incurred $2 million of restructuring and other charges. The first three quarters of 2024 included $22 million of restructuring charges, impairment charges, inventory write-downs and other charges, primarily in Military Aircraft and Industrial. The first three quarters of 2023 included the gain from the sale of three buildings in Industrial, partially offset by restructuring and other charges across all of our segments.
Previous report
The effective tax rate in both third quarters of 2024 and 2023 benefited from favorable adjustments for tax credits associated with the prior years' tax returns. The effective tax rate was higher in the third quarter of 2024 compared to the third quarter of 2023, as the prior year's quarter included higher amounts of research and development tax credit benefits.
Previous report
Twelve-month backlog increased in the third quarter of 2024 compared with the third quarter of 2023, driven by long-term orders that moved into twelve-month backlog across both space and defense programs. Also, we had higher OEM orders in both Military Aircraft and in Commercial Aircraft. Partially offsetting these increases was a decline in Industrial's twelve-month backlog due to lower orders in our industrial automation market.
Previous report
Space and Defense net sales increased in the third quarter and in the first three quarters of 2024 compared to the same periods of 2023, driven primarily by higher demand for defense applications.
Previous report
The sales increases in the first three quarters of 2024 compared to the first three quarters of 2023 were largely due to the same factors as the third quarter. The continued strong defense application demand across most of our programs increased sales $37 million in our defense programs. Also, sales increased $12 million in our space programs. Higher demand for launch vehicle and satellite components was partially offset by lower activity across our space vehicle programs.
Previous report
Operating margin increased in the third quarter of 2024 compared to the third quarter of 2023, driven by improved performance on space vehicle development programs, partially offset by pursuit investments to capture once-in-a-generation programs. Operating margin increased in the first three quarters of 2024 compared to the first three quarters of 2023 driven by improved performance on space vehicle development programs and the benefit associated with the Employee Retention Credit in the second quarter of 2024.
Previous report
Military Aircraft net sales increased in the third quarter and in the first three quarters of 2024 compared to the same periods of 2023, driven by growth on development and production aircraft.
Previous report
The sales increases in the first three quarters of 2024 compared to the first three quarters of 2023 were largely due to the same factors as the third quarter. Sales increased $52 million in military OEM programs and increased $7 million in military aftermarket programs.
Previous report
Operating margin increased in the third quarter of 2024 compared to the third quarter of 2023, driven by improved cost absorption on the FLRAA program and a reduction in research and development expenses. Operating margin increased in the first three quarters of 2024 compared to the first three quarters of 2023 due to the same factors as the third quarter, as well as the benefit from the sale of a mature product line. Partially offsetting these benefits in the first three quarters of 2024 included asset impairments of $6 million and restructuring and other charges of $5 million. The first three quarters of 2023 included $1 million of asset impairments. Excluding these charges, adjusted operating margins in the first three quarters of 2024 and 2023 were 12.0% and 9.5%, respectively.
Previous report
Commercial Aircraft net sales increased in the third quarter and in the first three quarters of 2024 compared to the same periods of 2023.
Previous report
Commercial aircraft sales increased in the third quarter of 2024 compared to the third quarter of 2023. The increase reflects growth in our widebody business.
Previous report
In the first three quarters of 2024 compared to the first three quarters of 2023, commercial OEM sales increased $92 million and commercial aftermarket sales increased $23 million. We experienced growth from production ramps on widebody and other programs.
Previous report
Operating margin increased in the third quarter of 2024 compared to the third quarter of 2023 due to benefits from our pricing initiatives, higher sales volumes, as well as a more favorable sales mix. Operating margin increased in the first three quarters of 2024 compared to the first three quarters of 2023 due largely to the same factors as the third quarter. Partially offsetting the increases is the absence of favorable aftermarket retrofit activity from last year.
Previous report
Industrial net sales decreased slightly in the third quarter of 2024 compared to the third quarter of 2023, as weaker industrial automation sales were mostly offset by growth in our other markets. Net sales increased in the first three quarters of 2024 compared to the first three quarters of 2023, as growth in our other markets exceeded the decrease in our industrial automation market.
Previous report
In the third quarter of 2024 compared to the third quarter of 2023, industrial automation sales decreased $15 million, reflecting the slowdown in orders we have seen in recent quarters. Partially offsetting the decrease were sales increases of $7 million in our energy market and $3 million in our simulation and test market, both due to higher demand for our products.
Previous report
In the first three quarters of 2024 compared to the first three quarters of 2023, sales increased $26 million in our simulation and test market. Higher demand for our flight simulation systems, which support the increased pilot training demand, and for our test products drove the sales increase in this market. Sales also increased $13 million in our energy market. Partially offsetting the increases was a $20 million sales decrease in our industrial automation market, driven by the same factors in the third quarter of 2024.
Previous report
Operating margin decreased in the third quarter of 2024 compared to the third quarter of 2023, driven by higher amounts of restructuring charges and an inventory write-down. Excluding restructuring charges of $3 million and an inventory write-down of $2 million in the third quarter of 2024, and excluding restructuring charges of $1 million in the third quarter of 2023, adjusted operating margins were 11.7% and 11.5%, respectively. The increase was attributable to benefits from pricing initiatives, offset by pressures associated with lower industrial automation sales and planned product transfers.
Previous report
Operating margin decreased in the first three quarters of 2024 compared to the first three quarters of 2023, as last year included a $10 million gain related to the sales of three buildings. Excluding this gain and restructuring and other charges, adjusted operating margin in the first three quarters of 2023 was 11.4%. Adjusted operating margin in the first three quarters of 2024 was 12.3% after excluding $9 million of restructuring charges and a $2 million inventory write-down. The increase in adjusted operating margin was driven by the benefits from our pricing initiatives, as well as the Employee Retention Credit. These increases were moderated by lower industrial automation sales and planned product transfers.
Previous report
CONSOLIDATED SEGMENT OUTLOOK
Previous report
2024 Outlook – We expect higher sales in 2024, driven by the continued growth in our aerospace and defense markets. 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 impairments, inventory write-downs and restructuring and other charges in the first three quarters of 2024, we expect adjusting operating margin will be 12.4% in 2024, compared to 10.9% in 2023. We expect adjusted diluted earnings per share will range between $7.30 and $7.50, with a midpoint of $7.40. Management believes that the adjusted outlook may be useful in evaluating the financial condition and results of operations of the Company.
Previous report
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 development programs and the benefit of the Employee Retention Credit, partially offset by higher expenses associated with pursuit activity of new growth programs.
Previous report
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 benefit from the sale of a mature product line and the lower amounts of charges associated with funded development contracts, which are winding down. Partially offsetting the increase in operating margin are the higher amounts of impairment and restructuring charges in 2024 compared to 2023. Excluding the asset impairments and restructuring and other charges in both years, adjusted operating margin is expected to be 11.9% in 2024 compared to 9.0% in 2023.
Previous report
2024 Outlook for Commercial Aircraft –In 2024, we expect sales growth from the production ramp of our widebody and other programs. 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. These decreases will partially be offset by the benefits from pricing initiatives and higher sales volumes.
Previous report
2024 Outlook for Industrial – In 2024, we expect a slight sales increase. We expect sales increases in our simulation and test market and our energy market, both due to higher demand for our products. These increases will be partially offset by 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 and the benefit of the Employee Retention Credit, partially offset by an unfavorable sales mix and planned product transfers. Excluding gains on the sale of buildings and restructuring and other charges in 2023, as well as restructuring and inventory write-down charges in 2024, adjusted operating margin is expected to be 12.5% in 2024 compared to 11.5% in 2023.
Previous report
Consolidated Statement of Cash Flows
Previous report
Net cash from operating activities increased in the first three quarters of 2024 compared to the first three quarters of 2023, driven by the increase in net earnings. Also, unbilled receivables and accounts receivable used less cash. Partially offsetting these sources of cash was customer advances, which used cash as we worked down advances across Military Aircraft and Commercial Aircraft.
Reworded paragraphs (23)
Previous wording
We operate under four segments, Space and Defense, Military Aircraft, Commercial Aircraft and Industrial. Our principal manufacturing facilities are located in the United States, Philippines, United Kingdom, Germany, Italy, Costa Rica, China, Netherlands, Luxembourg, Japan, Czech Republic, Canada, India and Lithuania.
Current wording
We operate under four segments, Space and Defense, Military Aircraft, Commercial Aircraft and Industrial. Our principal manufacturing facilities are located in the United States, Philippines, United Kingdom, Germany, Italy, Costa Rica, China, Netherlands, Japan, Canada, India and Lithuania.
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 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 center around 80/20 methodologies and include:
Previous wording
•focusing our factories so that individual sites meet the unique needs of a specific market, and
Current wording
•focusing our factories so that individual manufacturing sites meet the unique needs of a specific market, and
Previous wording
We focus on improving shareholder value through strategic revenue growth, both organic and acquired, improving operating efficiencies and manufacturing initiatives and utilizing low cost manufacturing facilities without compromising quality. Historically, we have taken a balanced approach to capital deployment in order to maximize shareholder returns over the long term. These activities have included strategic acquisitions, share buybacks and dividend payments. Today, we believe we can create long term value for our shareholders by continuing to organically invest in areas of strong growth.
Current wording
We focus on improving shareholder value through strategic revenue growth, both organic and acquired, improving operating efficiencies and manufacturing initiatives and utilizing low cost manufacturing facilities without compromising quality. Over time, we strive to have a balanced approach to capital allocation in order to maximize shareholder returns. Investing for organic growth through increased capital expenditures is a key opportunity for us within our capital allocation strategy. With the anticipation of several significant programs that will provide long-term revenue growth starting in a few years, our investments in our facilities will continue at elevated levels to ensure we are well prepared for these opportunities. Also, we have repurchased shares opportunistically and remain committed to our dividend policy.
Previous wording
In the third quarter of 2024, sales increased $10 million in our defense programs and $6 million in our space programs. Within our defense market, higher U.S. demand for our component products and the ramp of new defense pursuits serving European needs increased sales. Within our space market, the production ramp of a launch vehicle program increased sales.
Current wording
Space and Defense net sales increased in the first quarter of 2025 compared to the first quarter of 2024 driven by higher broad-based demand. In the first quarter of 2025, net sales increased $9 million in each of our defense and space markets. Within our defense market, higher U.S. demand for our component products and the ramp of new defense pursuits serving European needs increased sales. Within our space market, higher demand for satellite components and launch vehicles increased sales.
Previous wording
In the third quarter of 2024 compared to the third quarter of 2023, military OEM sales increased $29 million due to the ramp-up of activity on the FLRAA program and other OEM production programs. Also in the third quarter of 2024 compared to the third quarter of 2023, military aftermarket sales increased $2 million.
Current wording
Military Aircraft net sales increased in the first quarter of 2025 compared to the first quarter of 2024. Sales increased $25 million in military OEM programs, driven by the ramp-up of activity on the FLRAA program and our new production work. Sales also increased $2 million in military aftermarket programs.
Previous wording
Net cash used by investing activities in the first three quarters of 2023 included $125 million of capital expenditures, including a $28 million building purchase. The first three quarters of 2023 also included $21 million of proceeds from the sales of buildings and businesses.
Current wording
Net cash used by investing activities in the first quarter of 2025 included $33 million of capital expenditures and $13 million of proceeds from the sales of businesses.
Previous wording
Net cash used by investing activities in the first three quarters of 2024 included $110 million of capital expenditures and $6 million associated with the acquisition of DCL.
Current 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.
Previous wording
Net cash provided by financing activities in the first three quarters of 2023 included $175 million of net borrowings on our credit facilities. Additionally, financing activities used $25 million of cash for dividend payments and $10 million for share repurchases.
Current wording
Net cash provided by financing activities in the first quarter of 2025 included $230 million of net borrowings on our credit facilities. Financing activities also included $39 million for shares under the repurchase program authorized by the Board of Directors and $9 million of cash dividends.
Previous wording
Net cash provided by financing activities in the first three quarters of 2024 included $94 million of net borrowings on our credit facilities. Financing activities also included $27 million of cash dividends.
Current 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.
Previous wording
At June 29, 2024, our cash balances were $52 million, which includes $47 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 December 28, 2024, our cash balances were $74 million, which includes $64 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.
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 6.92% and is principally based on SOFR plus the applicable margin, which was 1.60% at June 29, 2024.
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 outstanding credit facility borrowings was 6.04% and is based on SOFR plus the applicable margin, which was 1.60% at December 28, 2024.
Previous wording
The SECT has a revolving credit facility with a borrowing capacity of $35 million, maturing on October 26, 2025. Interest was 7.56% as of June 29, 2024 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 $25 million, maturing on October 26, 2026. Interest was 6.60% as of December 28, 2024 and is based on SOFR plus a margin of 2.23%.
Previous wording
At June 29, 2024, we had $670 million of unused capacity, including $637 million from the U.S. revolving credit facility after considering standby letters of credit and other limitations.
Current wording
At December 28, 2024, we had $515 million of unused capacity, including $492 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 6.39% as of June 29, 2024.
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 5.41% as of December 28, 2024.
Previous wording
The Board of Directors authorized a share repurchase program that permits repurchases for both Class A and Class B common stock, and allows us to buy up to an aggregate 3 million common shares. There are approximately 2.2 million common shares remaining under this authorization. See the Consolidated Condensed Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this report for additional details.
Current wording
The Board of Directors authorized a share repurchase program that permits repurchases for both Class A and Class B common stock, and allows us to buy up to an aggregate 3 million common shares. There are approximately 2 million common shares remaining under this authorization. See the Consolidated Condensed Statement of Shareholders Equity and Cash Flows, of Part I, Item 1, Financial Information and Part II, Item 2, Unregistered Sales of Equity Securities and Use of Proceeds, of this report for additional details.
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 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 73% of our 2024 sales. Our defense market, which represented 51% of our 2024 sales, is directly affected by defense funding levels and product demand, which have recently increased. Our commercial aircraft market, which represented 22% of our 2024 sales, is aligning with our customers' current plans.
Previous wording
Within our industrial markets, which represented 30% of our 2023 sales, our programs benefited from increased order demand within industrial automation, simulation and test and energy markets.
Current wording
Within our industrial markets, which represented 27% of our 2024 sales, our programs benefited from increased order demand within industrial automation, simulation and test and energy markets.
Previous wording
The commercial OEM aircraft market depends 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.
Current wording
The commercial OEM aircraft market depends 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. Boeing and Airbus are producing widebody aircraft at rates to support the current air traffic volumes, as well as working through their current supply-chain challenges. Any adjustments to their ramp schedules affects the timing of 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. 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 the limited availability of new aircraft, is increasing our aftermarket activity.
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 higher demand levels for our maintenance services and spare parts due to the increased number of flight hours across existing fleets.
Previous wording
The space market is comprised of three customer markets: the civil market, the U.S. Department of Defense market and the commercial space market. The civil market, namely NASA, is driven by investment for commercial and exploration activities, including NASA's return to the moon. The U.S. Department of Defense market is driven by governmental-authorized levels of defense spending, including funding for defense-related satellite technologies. Levels of U.S. defense spending could increase as there is growing emphasis on space as the next frontier of potential future conflicts. The commercial space market is driven by demand for small satellites, which offer new innovative space applications, including the support of broadband internet connectivity. Trends for this market, as well as for commercial launch vehicles, follow demand for increased capacity. Our launch vehicle and satellite components and systems, as well as our new space vehicle programs, will continue to benefit from increased investments in these markets.
Current wording
The space market is comprised of three customer markets: the civil market, the U.S. Department of Defense market and the commercial space market. The civil market, namely NASA, is driven by investment for commercial and exploration activities, including NASA's return to the moon. The U.S. Department of Defense market is driven by governmental-authorized levels of defense spending, including funding for defense-related satellite and space vehicle technologies. Levels of U.S. defense spending could increase as there is growing emphasis on space as the next frontier of potential future conflicts. The commercial space market is driven by demand for small satellites, which offer new innovative space applications. Trends for this market, as well as for commercial launch vehicles, follow demand for increased capacity. Our launch vehicle and satellite components and systems will continue to benefit from increased investments in these markets.
Previous wording
The industrial market we serve with our industrial automation products is influenced by several factors including capital investment levels, the pace of product and technology innovation, economic conditions and cost-reduction efforts and are placed in customers' facilities that serve the automotive market.
Current wording
The industrial market we serve with our industrial automation products is influenced by several factors including capital investment levels, the pace of product and technology innovation, economic conditions and cost-reduction efforts. Our industrial automation customers mainly serve the automotive market.
Previous wording
We are affected by the movement of foreign currencies compared to the U.S. dollar. About one-sixth of our 2023 sales were denominated in foreign currencies. During the first nine 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 $3 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. About one-sixth of our 2024 sales were denominated in foreign currencies. During the first three months of 2025, average foreign currency rates generally were the same against the U.S. dollar compared to 2024. The translation of the results of our foreign subsidiaries into U.S. dollars had no material impact on sales compared to the same period one year ago.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Today, we believe we can create long term value for our shareholders by continuing to invest in our business through both capital expenditures as well as investments in new market opportunities. We will also continue exploring opportunities to make strategic acquisitions and return capital to shareholders.