Margins in our Industrial segment were a very strong 14.6% for the quarter, up from 13.2% in the prior year. For the year, we had projected Industrial margins at 13.2%, continuing the performance of last year. It now appears we can be more aggressive, so we're now projecting margins of 13.7% for the entire year.

Components Group Q1 '08

Our Components Group juggernaut continues to steam ahead. Sales of $79.6 million in the quarter were up 16%. Sales were up in every market area. We sold $26 million in aircraft products, up 12% from a year ago. Two of the major growth programs are also the largest programs. First is the Guardian program for Northrop Grumman. Guardian is a system designed to protect military and commercial aircraft from shoulder-fired missiles. Sales in the quarter were over $2 million. The other major new program is the multi-spectral targeting system built by Raytheon for use on the Predator UAV. During the quarter, we also shipped $1.5 million worth of fiber-optic components for use on the Eurofighter and we continue to ship a variety of products used on the Blackhawk helicopter and in the avionics suites of commercial aircraft.

Sales of products used in the space and defense market increased in the quarter by 12% to over $16 million. The largest program is the Commander's Independent Viewer for the Bradley Fighting Vehicle. We had a big shipment quarter finishing up deliveries of fiber-optic modems for the Egyptian Army. The biggest sales increase in space and defense, though, was in aftermarket, which is primarily the delivery of spares for equipment used in the Mideast.

The marine market continued strong in the first quarter. Sales of $8.4 million were up 29%. The increase was primarily slip rings used on undersea robots and FPSO's, floating production, storage and offloading vessels, all used in oil exploration and production. The quarter includes sales of about $500K from our new acquisition of Prizm.

The sales increase in medical equipment was primarily increased quantities of brushless DC motors shipped to Respironics for their sleep apnea equipment. Sales to Respironics increased by $1 million to over $8 million making up about two-thirds of the sales volume in our medical equipment business. Most of the rest of this product category are slip rings used in CT scan machines by a variety of customers, but primarily Philips Medical. Incidentally, you may be aware that, during the quarter, Respironics was acquired by Philips Medical for a very handsome price.

Industrial sales of $15.8 million were up a healthy 28% from a year ago. Of that $3 million increase, the majority represents the inclusion of revenues from the recent acquisitions of Thermal Control Products and Techtron.

Our forecast of sales for the year '08 was $321 million before the Prizm acquisition, which should add about $5 million. So, we're now projecting $326 million, a 15% increase over last year.

Components Margins

Margins for the first quarter of 18.6% were almost as high as last year's 19.2% and considerably above last year's average of 15.7%. We've had this experience before where the Components Group profitability is very strong in the first quarter. In part that's because the first quarter is a strong aftermarket quarter in that it's the beginning of the government fiscal year and funds become available to cover some pent-up demand. So, for the moment, we're content to continue with a 15.7% margin projection for the year '08.