Moog Inc. (NYSE:MOG.A) Q1 2020 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 10:00 am ET

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Moog Inc. (NYSE:MOG.A) Q1 2020 Earnings Conference Call - Final Transcript

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Q & A
Executive
John R. Scannell

the moment. And so you could imagine that there could be a need for additional simulators.

Our own forecast for flight simulation this year was up just that marginally from last year and our folks believe that actually some of the big flight simulator folks built some white tails last year, because we had some accelerated sales towards the back half of 2019 in anticipation of perhaps some additional training. And so they may already be a little bit ahead of that curve and that so far we've not heard anything. But I could imagine that, that could be a little bit of a pickup. The type of stuff we make is not the type of thing you can suddenly double production in a quarter. So it would be -- you'd have to ramp it up over a few quarters.

Our total simulation -- flight simulation business put in context is about a $70 million to $80 million piece of business in total. So, if there was a nice pick up there, you could imagine that might compensate for some of the Max. But at this stage, again, we just haven't seen it and I think it's all very fresh.

Analyst
Cai von Rumohr

Thank you. And maybe on the big question, your aircraft processed overhaul, maybe update us in terms of what you've done, what people you still need to hire, where you are in process changes? And why you said you thought you might do a little bit better at the bottom line than you thought previously?

Executive
John R. Scannell

Well, I was very careful at what I said, Cai. I said, potential upsides could be, if it was faster than we are planning. So I didn't say we would be better. I'd say it's...

Analyst
Cai von Rumohr

Okay.

Executive
John R. Scannell

I just want to be careful on that. I don't want to get ahead of myself, as I've done in the past. So when we're looking at the performance on our operational improvement, let me break it down into four categories: people, processes, capabilities, and then results. So on the people side, we have continued to add additional talent into the operations. And in the last quarter, we have brought in two new leaders on -- two of our major sites, again, just strengthening the bench there in terms of our operational performance. And coming out of the initial supply chain review with our consultants, we're looking at how best to organize our supply chain to reflect both the geographical distribution of it and the way we work together to ensure the planning buying is combined and so that's in process. So there's kind of organizational adjustments, none of this is losing people. It's just reorganizing, how we work to make sure it's as streamlined as possible. So, additional skill -- up skilling, additional talent, and reviewing how we're organized to get the best out of it on the people side.

From a processes side, I'd say there is four major things that I talked about. We've talked about