In my presentation, I’ll review the results of fiscal year ’01. I’ll focus most of my remarks on our prospects for ’02. I thought I’d share with you our experience in selling some additional shares last November. I’ll discuss the impact on our financials of this year’s change in accounting rules and I’ll review the first quarter results.

I’ve asked Bob Maskrey to describe our situation on the Joint Strike Fighter Program, now called the F-35. It could be the biggest program ever in the history of our Company and I think the story of the strategy to win it tells a lot about the nature of our business. Then, we’ll finish with a video of Tom Morganfeld, the F-35 test pilot, who came to our 50th anniversary celebration.

Results for ’01

For the last 7 years, I’ve been able to start this part of the meeting by announcing that our sales were up, our earnings were up and, in some of those years, our stock price was up. Well, for fiscal ’01, sales were up 9% to $704 million. Earnings of $27.9 million amounted to $2.11 per share, an increase of 11%. And, last year, at the time of this meeting, our stock price was $20 a share. Yesterday, it closed at $26.15 and, still, we have a price earnings ratio that’s considerably lower than the market average.

At our Board Meeting in June of 2001, we decided to make a couple of moves to improve the liquidity in our stock and to make it more accessible to both institutions and individual shareholders. The first of these was to move from the American Stock Exchange to the New York. Some of our major institutional investors had encouraged us to make this move for some time. Until recently, we weren’t persuaded that it was worth doing. We’d always been served well by the AMEX and we were a little concerned that, if we moved to the New York, we’d suffer the small fish / big pond phenomenon, in that, if we ever needed any attention, we’d find it hard to come by. Last spring, though, we learned of the experience of a couple other companies who had made the move and felt it was advantageous because, as a result of the specialist’s behavior on the New York, their stock was less volatile.

So, we made the shift and then, on September 5th, four working days before 9-11, Dick Aubrecht, Bob Banta, Ann Luhr and my wife and I went down to ring the closing bell on the New York. This is a picture of that event. Ann Brady rang the bell. Dick Grasso, the President of the New York Exchange, normally appears for these little ceremonies. He was a couple minutes late and the lady standing between Bob Banta and myself stood in for him. When he appeared a couple minutes later, he noticed that our two sons, who live in New York, and their ladies, had come to applaud and he insisted that they come up to the podium and have their picture taken. Dick Grasso is the man next to Bob Banta without much hair. He’s a very nice man. The fellow standing next to him with a lot of hair and a big smile is my son who just got married.

To date, we’re very happy that we made the move. The folks from the Exchange and our new specialist have been very responsive and we think that our stock has been less volatile.

As we made the move onto the New York, we discussed with the folks from the Exchange, and with our new specialist, the potential benefit of having a stock dividend which would increase the number of shares outstanding and also reposition the stock in terms of its price. It was a unanimous sentiment that a three-for-two split would be a positive step and so we announced that at about the same time. Prior to the split, we had outstanding about 8.8 million shares. The split changed that to 13.2 million and then we issued 2 million additional shares, as you know. So, we now have 15.2 million shares outstanding. Hopefully, we’ve provided some additional liquidity and made our stock more attractive to some institutions and individuals.

Prospects for FY’02

The thing that will really make our stock more attractive to institutions and individuals, though, is continued improvement in the performance of the Company. We’ve projected earnings per share for ‘02 of $2.49 a share, which, if we achieve it, will be an 18% increase over the ’01 results. The $2.49 a share does take full advantage of the change in accounting in the first quarter. We’ve adopted FAS142 and are no longer writing off goodwill. This change offsets the dilutive impact of our 2 million-share offering. Without FAS142, and without the new shares, our earnings would come in at around $2.32, or about a 10% increase. But the accounting change has been considered carefully by the profession and it’s legitimate. We believe that it’s appropriate to look at our earnings per share in fiscal year ’02 on this new basis.

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