For the next quarter, we're anticipating a slight seasonal slowdown and, so, we're forecasting sales of around 2,600 pumps and revenue of $6.5 million. Once again, we expect operating profit before adjustments in the neighborhood of 30%. The purchase accounting adjustments will be somewhat less burdensome so we're expecting to make a net operating profit of over $700,000.

For fiscal '07, we're projecting sales of 12,500 pumps, revenue of slightly over $33 million, profit contribution before intangible amortization of just under 28%. The intangible amortization will take us down to operating profit of $6.6 million or about 20% of sales.

Summary of Guidance for '06 and '07

Now let me put the pieces together and update our guidance for '06 and then I'll do a summary of what we expect in '07.

In our last conference call, we were projecting total sales for fiscal '06 of $1.272 billion. That was using the middle of our Industrial range. Given the sales increases I've just described in Aircraft and the Components Group, we're now projecting '06 sales of $1.290 billion. We've adjusted margins in some of our segments to reflect recent experience and we're now projecting net earnings of $80.8 million or $1.96 a share. The percentage increase in earnings per share rounds to 20%.

Looking into fiscal '07, if we add up the sales forecasts that I described in each of the segment reports and use the mid-range forecast for Industrial, our projection would be $1.431 billion, an increase of 11% or $141 million over fiscal '06.

Given our margin expectations for each of the product lines, we're forecasting operating profit of $182 million or 12.7% of sales. This forecast incorporates a further increase in R&D of almost $8 million. Selling and admin. will be up in proportion to sales. Interest expense will be up only slightly from this year and the net result should be earnings in the range of $94.4 million to $97.8 million. The middle of the range, $96.1 million would be a 19% increase in net earnings. We sold shares in '06 and therefore our average share count creeps up by 4%. So, on a per share basis the range would be $2.21 to $2.29 with a midpoint at $2.25, a 15% increase over the $1.96 we're now forecasting for '06. If we achieve that result, it will be our thirteenth consecutive year of positive growth in earnings per share and in twelve of those years the increase percentage was in double digits.

On a quarterly basis we're forecasting this pattern; $.51 in the first quarter, $.55 in the second and then $.58 and $.61.

I'll now turn you over to Bob Banta.

Our accounts receivable increased by $18.8 million and inventories increased by $21.9 million compared to levels 90 days ago. Our closing of the Curlin acquisition brought in $11 million of the increases in these asset levels. Stronger foreign currency levels on June 30 pushed the numbers up by $8.8 million. So, constant conditions saw these two working capital components grow by $20.9 million. Some of this increase was supported by increased payables. However, the net result produced an increase in our debt levels by $19 million. That's net of our cash balances and net of the $75 million we used to fund the closing of Curlin Medical in early April.

Notable areas of our businesses that required more working capital to support their growth in sales included the Components Group whose accounts receivable and inventory increased by $7.9 million in 90 days, and the Aircraft Group whose accounts receivable and inventory increased by $9 million to fund work in progress on several military programs. As shipments occur and invoices are sent out, our collections will generate cash.