In the other case, we’re delivering only two antenna pointing mechanisms at about $600K apiece. Once, again, in qual we had both bearing and flexure failures and a redesign will be required. This problem will cost us $200K and the fix will be complete by the end of the calendar year.

As a result of all these problems, our Space segment reported an operating loss of $1.2 million on sales of $19.4 million. We had established, at the beginning of this year, a very conservative, we thought, projection of break-even for our Space segment. At this point, we’re almost $2 million in the hole as a result of the problems that have occurred. We’re hopeful that, over the next couple quarters, sales will recover to a more normal level, and we’ll at least get back to a break-even operating profit.

The rest of the Space business, in terms of production on launch vehicles, and our activity on Trident and the Minuteman refurbishment, is progressing nicely. Work continues on our Missile Defense programs, but at a modest level.

Last quarter, we had a very big $7.3 million tactical missile quarter. This quarter, that business settled down to the $5 million level that we anticipate for the balance of the year.

The only other major impact in the Space business is the relative slowdown in activity on the Space Shuttle Program. Our Space Shuttle contract is being rescheduled to complete in ’08 instead of ’06 and the level of activity will be reduced somewhat for this fiscal year as the program stretches out and the restart of the launch schedule is delayed. As a result of that, we think our forecast for the year on the Shuttle Program should be about $10 million instead of the $14 million that we started with. We also will lose some revenues as a result of the cancellation of the X-43C Program. It was going to be the follow-on to the very successful X-43A hypersonic vehicle test. Taken altogether, we think our estimate for sales in the Space segment, which we increased just last quarter to $91 million, will be back down to $86 million. We’re hoping, as I said a few minutes ago, to at least break even in terms of the operating margins for the balance of the year.

Industrial - Q2’04

Industrial sales of $80 million were up 15%, or over $10 million, from a year ago. We’ve talked all year long about the strength of the Euro and its impact on our sales. In this quarter, the currency effect was about 50% of the sales growth.

Plastics, our largest product line, increased 18% to almost $17 million for the quarter. This quarter, seventy per cent of our plastics sales were in Europe, and, in Europe, the business is progressing nicely. Sales in Europe were $3 million higher than the previous quarter. In Asia, our business also continues to grow. Demand continues at a fairly steady pace for injection molding machines making compact discs. This is a big business in Asia. In addition, we’re starting to get orders for closed-loop controls from machine makers in China.

Metal forming, which includes controls for large presses, continues to develop as a market. Sales of $5.8 million were up 32% from the year previous.

Now that we’ve adjusted to the burst of the bubble in the turbine controls business, turbine controls have become a steady and slightly-growing product line. We did $6.5 million in the quarter, an increase compared with last year and with the previous quarter.

Sales in what we call heavy industry, which is mostly steel mill equipment, was up a dramatic 90% in the quarter, to a total of $4.6 million. The driver for all this activity is the demand for steel in China and the continual construction of new steel mills in China. This provides business for the major steel mill manufacturers, SMS in Germany, Danielli in Italy, and Mitsubishi in Japan, all of which is escalating demand for our steel mill gauge controls.