(INTRODUCTION FOR CONFERENCE CALL)

Before we begin, we call your attention to the fact that we may make forward-looking statements during the course of this conference call. These forward-looking statements are not guarantees of our future performance and are subject to risks, uncertainties and other factors that could cause actual performance to differ materially from such statements. A description of these risks, uncertainties and other factors is contained in our news release of April 24, 2009, our most recent Form 8K filed on April 24, 2009 and in certain of our other public filings with the SEC.

We've provided some financial schedules to help our listeners better follow along with the prepared comments. For those of you who do not already have the document, a copy of today's financial presentation is available on our investor relations home page and webcast page at http://www.moog.com. 

Good morning. Thanks for joining us. This morning, we’ll report on the second quarter of fiscal ’09 and we’ll describe in more detail the guidance we provided two weeks ago on April 9th. As many of you know, it’s our practice at the end of each quarter to conduct a thorough review of major programs and product lines in terms of technical performance, contract performance and profitability. I’m happy to report that the quarter came in about where we expected and we’re able to confirm the guidance that we provided on April 9th. We’ve made a small change in our sales forecast for business jets to reflect some recent schedule changes and we’ve toned down medical sales somewhat, but there won’t be any noticeable effect on overall profitability. So those of you who are adjusted to the numbers we described two weeks ago, can relax now. I’ll provide a little more detail on our situation, but there is no more bad news. There isn’t another shoe to drop.

On to the quarter results.

Second quarter earnings came in at $23.7 million or $.55 a share, right in the middle of the range that we were expecting. Earnings per share were down 17% from a year ago. Sales for the quarter of $453 million were down 3% from last year, but the decline was all in exchange rates. On a constant currency basis, sales were flat. Cost of sales were 70% instead of last year’s 68%. As a result, our gross profit was down 9% or about $14 million. R&D, at $24.2 million, was down 7%. SG&A expense of $68.8 million was down 6%. Interest at $9.4 million was up ever so slightly. In other income, we had a gain mostly reflecting our ownership in LTiREEnergy. Our tax rate at 35.1% was a little bit higher than last year and the result was net earnings of $23.7 million or 5.2% of sales.

If you compare our net earnings this quarter with the $28.6 million we made in Q2 last year, the difference has all to do with Industrial sales that are $25.7 million lower, resulting in a $7.4 million reduction in Industrial operating profit and a $4.8 million reduction in net earnings. Were it not for the global industrial recession, our earnings would have been about the same as last year.

Now let me go to the segments.

Aircraft Q2 ‘09

Total Aircraft sales were $162 million, exactly the same as last year’s second quarter. This outcome though, was the result of a 9% increase in military sales, a 16% decline in commercial sales, and the addition of $1.9 million in sales from our recent acquisition of Fernau Avionics Limited.

Military aircraft sales for the quarter were $107 million, up $9 million from a year ago. There were some volume changes in our OEM programs. F-18 sales were up 16% to $9.4 million; V-22 sales were up 20% to $8.9 million. On the other hand, revenue on the F-35 was down $2.2 million from a year ago. The change in F-35 revenue has mostly to do with reduced activity on our part. We’re winding down our development programs. Our partners are still pushing to complete theirs.

The big increase in military aircraft sales was in the aftermarket. A part of that change was an increase in sales of Tactical Air Navigation equipment (TACAN). This is a product line that came to us in 1998 in our acquisition of Raytheon’s Montek division. We’ve always included TACAN sales in military aftermarket since what we acquired was an aftermarket product. Over the last eighteen months we’ve updated our design and we’re now selling new TACAN systems on an OEM basis. With the acquisition of Fernau Avionics, we intend to combine those TACAN sales with Fernau and make air navigation equipment a product line focus for us.