Annual Meeting Remarks 1/10/07

01 / 10 / 2007

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Here's Mike.

Thanks Mike.

Sales in our Industrial segment increased 21% in '06 or $66 million to a total of $381 million. Of the increase about $39 million was attributable to the recent additions of FCS and Flo-Tork, but that means that organic growth was 9% which is pretty respectable in this economy. Sales were up in most of our major product lines. Our largest single product line, Plastic Controls, generated $62 million last year. This represents sales of a number of different products, used on plastic-making machinery, injection molding and blow molding machines, sold primarily in Europe and Asia. Thomas Czeppel from Moog GmbH, our German company, will describe the collaborative efforts of our International Team to generate business in the International market.
Thomas has been with the Company for 12 years. He is currently part of our International Group and his base is our Company in Boblingen, Germany. Thomas is responsible for development and application of electromechanical technology in Europe. He is also responsible for the integration of Pro Control products and capabilities. Pro Control is a Swiss engineering company, which we acquired in 2005.
Thomas studied Precision-Engineering in the University of Esslingen and recently finished his M.B.A. from the Stuttgart Institute of Management and Technology. Thomas started his Moog career as a motor designer in Germany. From '96 to 2001 he lived in Orchard Park while working at our Industrial Division in East Aurora. During that period, he worked as an application and system engineer for all-electric injection molding machines sold in the Pacific. Now, he's back in Germany.
Here's Thomas.

Thank you Thomas.

Our Components Group had a fantastic year in '06. Sales were up $81 million or 52% to $238 million. You may remember that our Components Group was established at the beginning of fiscal '04 when we acquired the Litton Poly-Scientific Division of Northrop Grumman. At that time, it was $130 million business. Over the three-year period since then, sales have grown by $108 million, about half of which is attributable to the acquisition we made, last year, of the Kaydon companies. The Kaydon acquisition brought us three slip-ring companies: one in Blacksburg, VA; one in Reading, England, just outside London; and the Focal Company in Halifax, Nova Scotia. The company in Halifax is an offshoot of the Nova Scotia Research Institute. It has well-developed capabilities in both electric and fiber optic slip rings. Its major customers operate in the marine industry and it's headed up by Mike Glister, who will tell you about it.

Mike was born in the UK and studied Aeronautical Engineering at Bristol University. In the early part of his career, he was a Designer at Westland Helicopters and worked on the rotor and transmission system for the EH101. He left Westland to become a Product Manager for SNFA Aerospace. He came to Canada in 1984, then became General Manager of Thompson Canada, a linear automation company. He joined Focal in 2001 and, over those years, has led the business capture activities that have tripled the size of the company.

Here's Mike.

Thank you Mike.

Part way through our third quarter, we announced the acquisition of Curlin Medical, which became the foundation for our new Medical Devices segment. As a corporation, we've been thinking about entering the market for medical devices for a couple of years. The initiative, which involved analysis of a great many market opportunities, the selection of acquisition candidates, and then the pursuit of those candidates, was led by Marty Berardi. Marty will describe what we've acquired and how we intend to position ourselves in this market.

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