10-K FY 2022 FINAL MOOG Inc - Flipbook - Page 10
Table of Contents
Item 1A.
Risk Factors.
Our business, financial condition and results of operations face many risks, many of which are not exclusively within
our control. The known, material risks to our business summarized below should be carefully considered together with
all of the other information included in this report, including the financial statements and related notes. Any of the risks
discussed below, elsewhere in this report or in our other SEC filings could have a material impact on our business,
financial condition or results of operations. Although the risks summarized below are organized by heading, and each
risk is summarized separately, many of the risks are interrelated. While we believe we have identified and discussed
below the material risks affecting our business, there may be additional risks and uncertainties not currently known to
us or that we currently consider immaterial that may materially adversely affect our business, financial condition or
results of operations in the future and may require significant management time and attention.
STRATEGIC RISKS
We operate in highly competitive markets with competitors who may have greater resources than we
possess. Many of our products are sold in highly competitive markets. Some of our competitors, especially in our
industrial markets and medical markets, are larger, more diversified and have greater financial, marketing, production
and research and development resources. Within the aerospace and defense industries, suppliers have consolidated
to widen their product offerings and to secure long-term sole-source positions. As a result, these competitors may be
better able to withstand the effects of periodic economic downturns, including withstanding the COVID-19 pandemic.
In addition, our competitors' wins could increase their market share, which would reduce the total number of viable
suppliers. Our sales and operating margins will be negatively impacted if our competitors:
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develop products that are superior to our products,
develop products of comparable quality and performance that are more competitively priced than our products,
develop more efficient and effective manufacturing methods for their products and services, or
adapt more quickly than we do to technological innovations or evolving customer requirements.
We believe that the principal points of competition in our markets are product quality, reliability, design and
engineering capabilities, price, innovation, conformity to customers' specifications, timeliness of delivery, effectiveness
of the distribution organization and quality of support after the sale. Maintaining or improving our competitive position
requires continued investment in manufacturing, engineering, quality standards, marketing, customer service and
support and our distribution networks. If we do not maintain sufficient resources to make these investments, are not
successful in meeting our quality or delivery standards or are not successful in maintaining our competitive position,
we could face pricing pressures or loss in market share, causing our operations and financial performance to suffer.
Our research and development and innovation efforts are substantial and may not be successful, which could
reduce our sales and earnings. Our products and technological capabilities have undergone, and in the future may
undergo, significant changes. In order to maintain a leadership position in the high-performance, precision controls
market in the future, we have incurred, and we expect to continue to incur, expenses associated with research and
development and innovation activities during the introduction of new products. Our technology has been developed
through customer-funded and internally-funded research and development investments, as well as through business
acquisitions. If we fail to predict customers' preferences or fail to provide viable technological solutions, we may
experience inefficiencies that could delay or prevent the acceptance of new products or product innovations. Also,
incurred research and development expenses may exceed our cost estimates and the new products we develop may
not generate sales sufficient to offset our investments. Additionally, our competitors may develop technologies or
products that have more competitive advantages than ours and render our technology noncompetitive or obsolete.
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