Industrial Systems Fiscal '07

On a year-to-year comparison, sales of $436 million were up 14% or $55 million from the year previous. Of that increase about $20 million is attributable to currency effects and the balance of $35 million organic growth represents a 9% increase. For the year, metal-forming was the fastest growing market with a sales increase of over 32% to a total of $38 million. Steel mill equipment was also up 32% to just over $35 million. The motion simulator business was up 19% to over $48 million. Plastics, our biggest market, was up 14% to over $70 million. Test equipment was up 6% to over $40 million and the turbine control business was about even at $43 million.

Industrial Margins

Fourth quarter margins of 12.4% were up nicely from a year ago when margins were 10.4%. For the year, margins of 13.2% were a record in recent history and compare with 11.8% a year ago.

Industrial Systems Fiscal '08

Our Industrial strategy of providing system solutions as well as components has resulted in five straight years of consistent growth and we 're projecting a continuation of this trend for '08. We 're now forecasting sales for '08 at $493 million, plus or minus $10 million. The midpoint represents a sales increase of $57 million or about 13%. We 're looking for a dramatic increase in the simulator business, about 39%, principally the result of recent orders from CAE. You may recall that in mid '06, we signed a five-year agreement with CAE to provide all the motion bases for their electric simulators. We 're also looking for growth in plastics, in metal-forming, in turbine controls, in test equipment for the automotive industry and in the aftermarket. We 're hoping to maintain the 13.2% margin performance that we achieved for all of fiscal '07.

Over the last few months, we 've experienced considerable strengthening of foreign currencies against the dollar. Ninety days ago, we provided an Industrial forecast for '08 of $479 million based on a Euro at $1.36. We 've just updated that to a midpoint of $493 million, using an average Euro of $1.38. We forecast a sales range of plus or minus $10 million and those of you who are certain that the Euro will maintain its current level for the next eleven months may conclude that we 'll finish '08 at the high end of our Industrial range. We don 't want to base our midrange forecast on that presumption.

Components Group Q4 '07

Our Components Group had another great quarter. Sales of $72.8 million were up 18% from a year ago.

Of the $11 million sales increase, over $4 million came in Space and Defense. These are familiar programs. We ship a variety of components including slip rings, twist caps, resolvers, and motors for the Commander 's Independent Viewing Platform on the Bradley Fighting Vehicle. We 're delivering slip rings for the Abrams Main Battle Tank. And, in this quarter, we finished up an order for fiber optic modems delivered to the Egyptian Army.