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Annual Meeting Remarks, 1/12/05

01 / 12 / 2005

Highlights

Robert T. Brady, Chairman and CEO:Record Financial Results Boeing Supplier of the Year Respironics Preferred Supplier Award Joint Common Missile Hellfire Will Substitute if JCM Discontinued Mark Trabert, Deputy General Manager of Aircraft Group Low Rate Initial Production to Begin 2007 $1 million per shipset John Scannell, 7E7 Program Director Redefining the Passenger Experience 90-100 Planes Per Year During Full Production John Swiatowy, Product Line Sales Manager, Launch Vehicles Dave Fijas, Deputy General Manager of Industrial Controls Division Flight School XXI DF Total Market for Flight Simulation Is $2 Billion, Growing at 6% a Year Larry Ball, Vice President and General Manager of the Components Group Respironics’ Sleep Apnea $1 Billion Equipment Market, Growing Annually > 20%Moog Is Sole Source Supplier for Respironics’ Sleep Apnea Products FY05 Forecast Bob Banta, EVP and Chief Financial Officer $150M at 6 ¼%Achieved Tightest Spread in Last Ten Years Oversubscribed $250M in Cash and Unused Facility for Acquisitions Activities

Past

First, let’s start with the Moog Components Group; we are an innovative advanced technology organization with world renowned capabilities in the design and manufacture of standard and custom electro-mechanical-optical components and assemblies. Our products include slip rings, and we are the world’s largest producer with a number one position, motors which are primarily fractional horsepower brushless dc motors which range in the 1 to 4 inch frame size, electromechanical actuators, and fiber optic devices. We serve both military and commercial markets and have a strong focus on the medical market. That’s where Respironics comes in.

Respironics is our largest customer and they are also our fastest growing customer as well. Respironics is a leading developer, manufacturer, and distributor of innovative products and programs that serve the global sleep and respiratory markets. Respironics’ focus is in the medical industry. Their products include ventilators, sleep apnea devices, and concentrators, and they serve both the homecare and hospital segments of the medical market.

Respironics’ Sleep Apnea

The business area that I want to address today is Respironics’ sleep apnea products, but let me first define sleep apnea. Basically, sleep apnea is a life altering and potentially life threatening condition that occurs when a person repeatedly stops breathing during sleep because his or her airway collapses and prevents air from getting into the lungs.

Sleep is repeatedly disrupted, depriving sufferers from the deepest, most restful stages of sleep. The lack of sleep affects daytime alertness and one’s ability to function well throughout the day.

The low oxygen levels associated with sleep apnea and the effort required to breathe during the night, put a strain on the cardiovascular system. Ultimately, sleep apnea takes its toll on the individual’s quality of life.

$1 Billion Equipment Market, Growing Annually > 20%

So how widespread is this condition known as sleep apnea? It is estimated that 4% of men and 2% of women over 40 have sleep apnea. In total, it is estimated that approximately 20 million Americans have sleep apnea and that there are over 50 million people worldwide with this condition. Overall, that translates into a $1 billion dollar equipment market that is growing at an annual rate in excess of 20%.

So what are the treatments for sleep apnea? Corrective surgery is available, but these procedures are risky and the success rate is less than 50%.

Nasal continuous positive airway pressure or CPAP is the most common treatment for sleep apnea. Basically, CPAP machines, which Respironics designs and manufactures, push air through the airway at a pressure high enough to keep the airway open during sleep. Respironics is the number one supplier of CPAP machines in the world with a market share that is close to 50%.

We supply Respironics with a brushless dc motor/fan assembly which is used exclusively in all of their CPAP machines, primarily because we offer low acoustic noise. As you can see in the picture, the CPAP machine sits next to the user’s bed, so it needs to be quiet. Our ability to provide low acoustic noise is a competitive advantage for both Moog and Respironics. We’ve also demonstrated superior reliability and delivery which are key factors relative to a sound supplier/customer relationship.

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