Overall, our Space segment is running at a revenue level that’s about what we are forecasting for fiscal ’02. There will be a small shift in the business. We’ll do a little more satellite business in ’02 as a result of the Tecstar acquisition, and a little less business in tactical missiles as we complete contracts on AGM-142 and move through a production break on Hellfire and TOW.

Space Margins

Margins of 12.5% in the Space segment were up dramatically from a year ago. One year ago at this time, we were transitioning from more mature programs, such as the Titan Launch Vehicle, to newer programs including Crew Return Vehicle and various tactical missile programs. The margins on these newer programs have improved nicely, and we’ve been helped out by the increasing volume in satellite controls.

We finished the year at 11.9% which is pretty close to what we’ve projected. In ’02, we’re looking for a continuation at about this level. We have based our ‘02 plan on margins of 11.7%.

Industrial Q401

Industrial sales for the quarter of $66.5 million were up 18% from a year ago. The increase of $10.2 million is directly related to revenues on the three acquisitions that we made over the last year – Casella Electric Drives, Bosch Piston Pumps and turbine controls from Whitton. In most other respects, our Industrial revenues are running at a level very comparable to a year ago, which is actually good news, in that a lot of other industrial businesses are having a tougher time managing through the global industrial economic slowdown. We are fortunate in that a number of our specialty markets have actually done quite well in spite of the general economic conditions. In the quarter, we did see a shift in revenues – a little heavier on the turbine controls business and a little lighter in the plastics industry.

Industrial FY01 & FY02

In our Industrial segment, we completed the year at $261 million, about $3 million lower than we had anticipated. The shortfall came largely as a result of lower sales in the fourth quarter of electric drives and controls for carpet-tufting machinery at Tuftco. We expect that both of these product lines will recover in ’02.

Nevertheless, on an overall basis, we’re currently achieving sales levels which are quite close to what we are predicting for fiscal ’02. We’ve forecasted ’02 Industrial revenues of $272 million.

Industrial Margins

Margins in the quarter for Industrial continued to be an unacceptably low level, 7.4% for the quarter. The year came in at 8.3% which is down substantially from the 11% level of a year ago. We’ve been discussing this all year long. The difficulty is in two areas – lower margins in the plastics business as a result of very low volumes levels in our manifold business and, secondly, tremendous pricing pressure that’s been exerted principally by General Electric in the turbine controls business. We do have corrective measures in work and, over the long term, we expect a complete recovery in the margins in the Industrial business. For fiscal ’02, we’re projecting what we hope will be a very conservative 8%. Over the next two or three years, I fully expect that the Industrial margins will recover back to the 10% or 11% level that we’ve been accustomed to in years previous.