(INTRODUCTION FOR CONFERENCE CALL)

Before we begin, we call your attention to the fact that we may make forward-looking statements during the course of this conference call. These forward-looking statements are not guarantees of our future performance and are subject to risks, uncertainties and other factors that could cause actual performance to differ materially from such statements. A description of these risks, uncertainties and other factors is contained in our news release of today’s date, our most recent Form 10Q filed February 3, 2005, and in certain of our other public filings with the SEC.

Good morning. Thanks for joining us. Today, we're reporting results for the second quarter of fiscal '05.

This was a very strong quarter. Sales were up 9% to $255 million. Net earnings of $15.8 million were up 12% from a year ago. Earnings per share on a split-adjusted basis were 40 cents, up 14% from last year's 35 cents.

Sales were up in each of our four segments and margins were up in every segment but Aircraft.

Sales of $505 million for the first half of our year should lead us to in excess $1 billion for the year. Split-adjusted earnings per share of $.78 for the first half are a good start towards our plan for the full year which is a range of $1.60 to $1.66.

Looking at the quarter's P&L, gross margins were up slightly. R&D is way up, an increase of $2.6 million to a total of $10.1 million. The increase has all to do with the $3 million we spent on developing the flight control actuation for the 787. In the same quarter a year ago, we spent almost the same amount preparing the proposal, but that cost showed up as selling expense. As those costs are now shifted from selling to R&D, our selling expense for the quarter was up less than 3%. Interest is up a little bit from last year, partly as a result of the high-yield offering that we completed on Jan. 10th. Our tax rate this year is also a little bit higher but, all in all, we had a nice increase in earnings.

Bob Banta will discuss cash flow and debt levels in a few minutes. Now, to the discussion of the segments.

Aircraft Q2'05

Total Aircraft sales were up 7% to $109 million. Our most recent forecast for the year is $424 million and, through the first half of the year, we're about $3 million ahead of that pace. However, this is mostly the result of unusually high first quarter revenues on the LCA and the V-22. We still expect to finish the year at about $424 million.

Military aircraft sales were $71 million, almost identical to the same quarter last year. Sales on our single biggest program, the F-35 Joint Strike Fighter, were $13.3 million, down $4.5 million from the same quarter a year ago. Also, our sales on V-22 were down from a year ago. I've explained before that last year we were re-delivering swashplate actuators for the first 25 V-22's to bring them up to the latest spec. and this year we're delivering only the current production rate of 11 aircraft. So, sales on those two programs were down, but we had offsetting increases on a number of other programs. Sales were up by over $3 million on our Korean and Japanese F-15 programs and on the Black Hawk helicopter by almost $2 million. Our new A400M contract generated revenue of over $1 million, and we had an increase in the military aftermarket of a little over $1 million.