As in the Aircraft Segment, we're reaffirming our guidance for Space and Defense for '07. We're projecting another 15% increase in sales to a total of $170 million. The big story in '07 will be even faster growth in Defense Controls. We're projecting a $26 million increase to a total of $61 million. It will be a big year for deliveries on the Light-Armored Vehicle program for the Marine Corp and for the new development work that we've won, together with Curtiss-Wright, on Future Combat Systems. You may remember that a couple of quarters ago in this call, we announced that we were part of a team led by Curtiss-Wright that had won a contract to develop servomotor controllers for use on the Future Combat System common chassis. This is a $32 million development program and we and Curtiss are splitting it 50-50.

In '07, the Launch Vehicle business will benefit from $4 million worth of new work on the Space Shuttle replacement programs, both the Crew Exploration Vehicle and the Crew Launch Vehicle. And, we're forecasting a $3 million increase in equipment we supply for Naval applications. That's the upside. The offset, however, is a reduction in Tactical Missile business, VT-1, Vertical Launch ASROC, and Maverick finish-up. TOW and Tomahawk continue at the current level, but the result is a $14 million reduction to a level of only $14 million.

As I said ninety days ago, in spite of this mix change from some bread-and-butter old programs to newer development programs, we still hope to hold margins at 9%. And, as the newer products mature, we're optimistic that in the long-term, profitability in this segment will improve.

Before I leave Space and Defense, though, I would add this thought. There is some potential upside. Our revenues in Missile Defense include the THAADS program (Terminal High Altitude Area Defense Systems), the EKV ground-based interceptor and the Ground-based Mid-course Defense System. All these programs total about $6 million a year. As you know, the US has rather quietly deployed a missile defense system and there have been a number of successful tests that don't get much attention in the press. Given the emerging nuclear threats, both in North Korea and Iran, some of our allies are showing increased interest in deploying our missile defense systems and it's not inconceivable that these initiatives could generate some business in '08 and potentially towards the end of '07.

Industrial Q4'06

Industrial sales came in at $94.4 million. That's an 18% increase, up almost $14 million from the same quarter a year ago.

As our FCS and Flo-Tork acquisitions become increasingly integrated into our Industrial operation, it's harder to estimate the sales generated by these acquisitions. But, in a rough way, we can say that about $10 million of sales in this quarter were the result of those acquisitions, and without them our organic growth would have been in the neighborhood of 12%. Except for Plastics, sales were up in every one of our major markets. Plastics, at just under $15 million, was down $1 million from the same quarter a year ago. We continue to experience a relatively weak European market for controls on injection molding machines used in the production of CDs and DVDs. The Japanese Company, Sumitomo, seems to be winning the major market share in this business and they use electric controls that they make themselves.

On a more positive note, our turbine control business was up almost 40%. The power generation market seems to be doing well all around the globe, but particularly in China. The China market is also driving up sales of gauge controls for steel mills, an increase quarter-over-quarter of 39% to a total of $7 million.

Our simulator business was up in the quarter 23% to $10 million. In test equipment, sales of complete systems as well as components surged by 43% to a new high of $9.6 million.

Sales of controls on metal forming machines continues to be our fastest growing area, an increase of 46% to a level just under $8 million. Aftermarket sales in the quarter grew a respectable 7% to over $9 million.