Annual Meeting Remarks, 1/12/05

01 / 12 / 2005

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We believe that these three innovative new technologies position Moog as the leading supplier of flight control systems in the commercial market place today.

We started our development activities on the 7E7 in June 2004. Today, we are in the preliminary design phase – with 20 Moog people working at Boeing’s facility in Seattle, as well as teams of engineers at our four major aerospace sites – East Aurora, Salt Lake City, Torrance, and Moog Controls Limited in the UK.

90-100 Planes Per Year During Full Production

The development program will last four years. First flight is scheduled for August 2007, with the first airplane delivery scheduled for April 2008. Boeing predicts that the airplane production will ramp up to between 90 and 100 airplanes per year within three years. Our shipset value on the 7E7 is nowhere near the shipset value on the JSF, but I can say this, in FY 04, we shipped $31 million of original equipment to Boeing Commercial, and if the 7E7 gets to 100 planes a year – the program will more than double those annual revenues.

On the 7E7, Boeing is adopting a new way of doing business. In the past, Boeing asked suppliers to produce components which they integrated into an airplane. In contrast, on the 7E7, they have selected a small number of companies to help develop and integrate the various systems on the airplane. Moog is no longer simply a component supplier to Boeing, rather we are a key member of the airplane development team. We have taken responsibility for a critical airplane system. We have taken the next step up the value chain.

Over the last 30 years, Moog has evolved in this market from a component supplier of servovalves, with values in the thousands of dollars, to supplying servoactuators with values in the tens of thousands of dollars, to our position today on the 7E7, supplying an integrated flight control system, with a value in the hundreds of thousands of dollars per airplane.

We have evolved from a supplier to airplane developers to a partner in airplane development.

Bob Brady, Chairman and CEO resumes:
Thanks, John.

Now, I’d like to introduce John Swiatowy who is our Product Line Sales Manager, Launch Vehicles. John is another Buffalo boy. He grew up in Kenmore and Williamsville. He's a graduate of the Rochester Institute of Technology. John started his career as a design engineer and in 1990 he joined Moog as an applications engineer, working with our sales team in the Tactical Missile and Launch Vehicle product lines. Over the last 14 years, John has worked in a number of different roles, mostly business development for Missiles and Launch Vehicles. In his current position, he's responsible for all our products associated with the Lockheed Atlas and the Boeing Delta satellite launch vehicles, NASA's Space Shuttle and Crew Return Vehicles, and our National Missile Defense programs, in addition to the Minuteman Program that he'll discuss today. I want you to appreciate that John is quite well schooled in our Minuteman III product line, even though some of us were involved in the design and production of these products well before John began his career. Here's John.

John Swiatowy, Product Line Sales Manager, Launch Vehicles

Good morning. The products that we manufacture for America’s Strategic Missile programs have provided significant and steady revenues throughout the company’s history and will continue to make important contributions to our Space and Defense segment through this decade. Since our involvement in the 1950’s, we have produced propulsion and steering control hardware for these rockets and we remain the dominant supplier of these products today.

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