In the satellite area, though, we have two problems that are real and did affect the quarter. The first has to do with profitability and profit margins. After a careful review of profitability on a number of different programs in both fluid controls and mechanisms, we revised our estimates of profitability and reduced profits by over $1 million which, incidentally, also reduces sales for the quarter by that amount. The major profit revision has to do with products that we acquired from PerkinElmer wherein we’ve had some of the typical start-up problems and our costs on those products, at least temporarily, are substantially higher than we had anticipated. We think that is a problem that time will take care of.

In addition, in the Space segment, we had anticipated an inflow of new orders that was $11 million more than we actually booked. These orders should have provided the opportunity for another $2 million worth of revenue in the quarter. They did not materialize in the quarter. Of the total, we think that about $3 million will come in the first quarter of ’03. These are orders for satellite thruster valves – releases on a long-term contract we have with Astrium and orders for actuators on the Tomahawk Missile. The bad news is that we believe that $7 million is gone for good. This total includes the final chapter on Teledesic. Instead of ordering hardware for two more satellites, they shut down their operation. We expected to design some electromechanical actuators for the Cobra Engine on the 2nd generation reusable launch vehicle. The Cobra Engine Development Program has been cancelled. Finally, we lost a competition for a fluid coupling on the Orbital Express to a competitor who quoted an unrealistic price. So be it.

Looking back on the entire ’02 fiscal year for the Space segment, we can say that our sales of products used on satellites are up $5 million. The Shuttle refurbishment program provided $2 million of additional revenue, and we saw a $2 million increase in tactical missile products.

In terms of margins, the Space segment had a very poor finishing quarter. I mentioned before a reduction in profitability on long-term contracts in excess of $1 million. That, coupled with the much-reduced sales volume in the quarter, had the result that margins on $22.8 million in sales were only 5.5%. As a result, our year-end margins for the segment came in at 11.5% on $107 million in sales vs. the 12.4% we had been targeting.

Whereas the space business was a disappointment in the fourth quarter, the industrial business actually came out pretty well. Sales of $66.1 million were down less than 1% from the comparable quarter last year, and this was the best sales quarter that we’ve had so far this year.

We are getting a lot of help from the stronger Euro. The impact, comparing this fourth quarter to the same quarter a year ago, was about $3 million. Said otherwise, in terms of constant currency, fourth quarter sales this year were down 5% from last year but slightly higher than the average of the first three quarters of this year.

Sales in almost all of our product lines reflect the strengthening Euro. We also had real sales growth of $2 million as a result of our acquisition of TSS, a Japanese servovalve company, and increased sales of $2.4 million in the quarter in industrial equipment sold on military vehicles. All of our sales increases, however, were offset by a reduction of over $5 million in turbine control products, and a reduction, quarter to quarter, of almost $4 million in the motion simulator business. Our sales of controls for flight training simulators are down substantially. Customers are delivering at rates much lower than last year, and they also find themselves well stocked with inventory of our product. In addition, we’re seeing almost no activity in the entertainment simulator business. The only sales of electric simulators in this quarter were to the training market.

Margins for the quarter, at 5.6%, were not great, but they were substantially up from last quarter’s 3.3%, supporting our belief that we’re on the mend. We’ve discussed before the fact that we have a number of product improvements and cost reduction initiatives underway in our Industrial segment that will have an increasing effect as we move into “03, and we’re beginning to see some of that margin improvement even in this fourth quarter.

For the year, industrial sales of $253 million were down a little over 3% from last year’s $261 million. The favorable currency effect for the year was not as dramatic as it was in the fourth quarter. It was less than $2 million. Over the year period, the strengthening Euro was offset to some degree by the movement of the Yen. In constant currencies, our sales would have been around $251 million, and about 5% less than last year.

As was the case in the quarter, for the year as a whole, we have some areas where we had nice sales increases. Controls on military vehicles went from $14 million to $25 million, an increase of $11 million. In addition, we had $4 million of sales from our TSS acquisition in Japan, spread over a number of different product lines. However, taking the year as a whole, our overall sales declined by $9 million on the basis of our experience in plastics, turbines and flight simulators.

For the year, our margins turned out to be a disappointing 5.5%, down from 9.1% in ’01, and historical levels in the 10% - 11% range. We believe that we have improvement efforts in work which will bring our Industrial margins up substantially in fiscal ‘03.