For the year, we had forecasted a 9% sales increase for the Components Group to $258 million. Given the performance of the first quarter, that seems overly conservative. It now appears that aircraft, space and defense, and the marine market will all be stronger than our original forecast. So, we're now projecting $266 million, a 12% increase over '06.

Components Margins

Last year, the Components Group started with a very strong first quarter with margins of 18.2% and then settled down, for the rest of the year, and finished up at 15.5%. We had forecasted 15.6% for the whole of fiscal '07 and, once again, we are off to a very strong start. Margins for the quarter were 19.2%. This extraordinary margin performance reflects the rapid growth rate in both the aircraft and defense controls product lines and particularly the substantial growth in the aircraft aftermarket. We'd love to predict a continuation of 19% margins, but we expect some moderation, throughout the year, and we now expect to finish the year at 16.7%, a nice improvement from last year's 15.5%.

Medical Devices Q1

There's lots of interesting news in our new Medical Devices Segment. I'm sure you know that about two weeks ago, we announced the proposed acquisition of Zevex International. But before I get into that subject, let me report on the results achieved in the quarter of the segment including the Curlin and McKinley products.

You may recall that we had forecasted, for the year, sales of $40 million and operating profit of about 20% or $8 million. Sales, in the first quarter, were actually $11 million. So, we're slightly ahead of plan. An operating profit of $2.1 million was 19.5% of sales, which could be rounded to 20%. So at least for the first quarter, we're right on track.

The December-ending quarter is reputed to be a strong sales period for pumps and that worked out for us. We had pump sales of $6.7 million, up from $4.1 million in the prior quarter.

Sales of administration sets at $3.1 million rebounded nicely from the weak performance in the previous quarter. The strength in administration sets is directly related to the marked improvement in profitability.

The $2.1 million in operating profit, that I already mentioned, was achieved after over $1 million in amortization of intangibles. So, in this quarter the Medical Segment delivered exactly the kind of performance that we'd hoped for when we entered the medical market.

Those of you who've followed our Medical Devices initiative know that our first acquisition, Curlin Medical, is a product line of electric ambulatory infusion pumps. Next, we acquired McKinley Medical, a disposable infusion pump product line. The Zevex acquisition relates directly to our strategy of becoming a specialist in infusion pumps. Two-thirds of the Zevex revenues are related to infusion therapy. The primary products are infusion pumps used in enteral, nutritional therapy. There are also sensors used in infusion pumps. In addition, the company has established technology in hand pieces used in cataract removal, and systems used for transporting organs.

The Zevex acquisition has to be approved by Zevex shareholders and the appropriate regulatory agencies. We're hoping for a closing by the end of March, and, if that occurs, we would expect that Zevex will add about $25 million in sales to our Medical Segment for the year '07. We also expect that because of the typical purchase accounting adjustments required in our first year of ownership, there'll be no impact on our fiscal '07 earnings per share projection.