10-K FY 2022 FINAL MOOG Inc - Flipbook - Page 39
Table of Contents
Industrial
Within industrial, we serve two end markets: industrial and medical. The industrial market consists of industrial
automation products, simulation and test products and energy generation and exploration products. The medical
market consists of medical devices and medical components products.
The industrial market we serve with our industrial automation products is influenced by several factors including
capital investment levels, the pace of product innovation, economic conditions, cost-reduction efforts, technology
upgrades and the subsequent effects of the COVID-19 pandemic. As our industrial market continues to recover,
ongoing supply chain constraints continue to impact our operations, as will potential future economic recessions.
Our simulation and test products operate in markets that were largely affected by the same factors and investment
challenges stemming from the COVID-19 pandemic. However, we have seen stronger order demand for flight
simulation systems as the airline training market recovers.
Our energy generation and exploration products operate in a market that is influenced by changing oil and natural gas
prices, global urbanization and the resulting change in supply and demand for global energy. Historically, drivers for
global growth include investments in power generation infrastructure and exploration of new oil and gas resources.
Recently, we have seen oil prices rise above pre-pandemic levels due, in part, to global disruptions; but future energy
crises could increase the market’s uncertainty.
The medical market we serve, in general, is influenced by economic conditions, regulatory environments, hospital and
outpatient clinic spending on equipment, population demographics, medical advances, patient demands and the need
for precision control components and systems. When the COVID-19 pandemic altered the way hospitals provided
care by asking non-critical patients to recuperate at home, our medical devices products saw an increase in orders.
This surge in demand has waned, as our customers have resized their inventory levels.
Foreign Currencies
We are affected by the movement of foreign currencies compared to the U.S. dollar, particularly in Aircraft Controls
and Industrial Systems. About one-fifth of our 2022 sales were denominated in foreign currencies. During 2022,
average foreign currency rates generally weakened against the U.S. dollar compared to 2021. The translation of the
results of our foreign subsidiaries into U.S. dollars decreased sales by $44 million compared to one year ago. During
2021, average foreign currency rates generally strengthened against the U.S. dollar compared to 2020. The
translation of the results of our foreign subsidiaries into U.S. dollars increased 2021 sales by $34 million compared to
2020.
RECENT ACCOUNTING PRONOUNCEMENTS
See Note 1 - Summary of Significant Accounting Policies, included in Item 8, Financial Statements and
Supplementary Data, of this report for further information regarding Financial Accounting Standards Board issued
Accounting Standards Updates ("ASU").
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