(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 on February 5, 2008 and in certain of our other public filings with the SEC.

We've provided some financial schedules to help our listeners better follow along with the prepared comments. For those of you who do not already have the document, a copy of today's financial presentation is available on our investor relations home page and webcast page at http://www.moog.com. 

Good morning. Thanks for joining us. This morning we'll review the results of our second quarter and update our guidance for the year.

On the face of it, this quarter would appear to be just another steady-as-she-goes quarter. Sales were up 22% to $469 million. Net earnings of $28.6 million generated earnings per share of $.66, an increase of 16%. But as we go through the segments, you'll notice that there are lots of puts and takes. There's a lot of good news and some not so good news. The quick summary goes like this. Aircraft had higher sales, but the sales increase was mostly on the F-35 development program, a cost plus program with very low margins, so the higher Aircraft sales generated about the same operating profit as the similar quarter last year. Space and Defense had the benefit of the recent QuickSet acquisition. QuickSet sales were outstanding and provided enough profit to overcome a reserve set up in the satellite business. Our Industrial Segment and our Components Group both had very strong margins on higher sales. On the other hand, our new Medical Devices Segment had a disappointing quarter both in sales and profits.

If you look at our consolidated P&L, gross profits were up by over $21 million in spite of an increase in the cost of sales percentage. R&D at $26 million was up less than 2% from last year. SG&A was down as a percentage of sales. Our interest expense was up to $9 million, reflecting our additional borrowings to support working capital, capital expenditures, and our recent acquisitions. The result was a net earnings increase of 17%. Now let me go to the Segments.

Aircraft Q2 '08

Total Aircraft sales were up 11% to $162 million. The increase was all on the military side and it was primarily an increase in the F-35 development program. Our F-35 sales in this quarter were $26.6 million, almost double last year's $13.8 million. Every quarter, I remind you that on the F-35 development program we are the lead contractor and work done by our partners (Parker Hannifin, Hamilton Sundstrand, and Curtiss Wright) becomes cost to us, which we then pass on to Lockheed. However, in this quarter, $17 million of the $26.6 million in sales was work done in our Company, an increase of just over $9 million from a year ago. Over the last couple of quarters, there has been a sizable increase in the staff devoted to this program. We're finishing up qualification testing on the conventional takeoff aircraft (CTOL), building and delivering the hardware for the short takeoff aircraft, the so-called STOVL, and progressing the design work for flight controls on the carrier version. The effect of this increased revenue on a cost-plus program is much higher sales, but not much benefit on the profit line. There were small increases in sales on a number of other programs including the F-18, the V-22, and the Blackhawk helicopter. And on the military side, there was a nice 13% increase in the aftermarket to a total of $30.2 million. So, total military sales increased 28% to $98 million.

Commercial aircraft sales, on the other hand, were down from the second quarter of last year. Total sales of $63.8 million were down 8%. The reduction was primarily related to Boeing Commercial. Last year, in the second quarter, we received our initial contract for the 787 resulting in a very strong quarter with over $8 million in sales. This year, given what's going on on the 787, our revenues were $5.1 million. In addition, OEM revenues on the Boeing production airplanes were also down a couple of million dollars to $13.3 million. Our sales to Boeing for their production aircraft are triggered by specific orders for equipment on specific airplanes and vary somewhat with the Boeing build schedule and their particular inventory position.

Sales on our Business Jet product line were up 7% to nearly $13 million. Increases on the Premier and revenue generated by an unannounced platform offset reduced sales on the Hawker 4000. The other bizjet news was Gulfstream's announcement of the G650. We're happy to announce our participation. We're doing the flap actuation system. The aircraft's reception in the market has been astounding.

Historically, our commercial aircraft aftermarket revenues have been relatively low in the first quarter of our fiscal year and then built as the year progressed. In this year's second quarter, those revenues were at $22.4 million, up from the previous quarter but down 3% from a year ago. In last year's second quarter, we had more spare sales on business jets. Other than that, the quarters were quite comparable.