On the commercial side, we’re now forecasting ’09 sales of $273 million, up only slightly from ’08. This forecast is lower than what we described 90 days ago and the difference all has to do with the strike at Boeing. We believe that the strike will likely result in a delay of about six weeks on both the production programs and on the 787. The impact in ’09 will be about $10 million. So in total, our revenues to Boeing Commercial will actually be down from $76 million in ’08 to $72 million in ’09. On the other hand, our revenues to Airbus will increase from $20 to $27 million, partly the result of increased shipments on brake system manifolds for the A380. Our Business Jet product line is projected to be up $2.5 million from ’08. We’re projecting steady revenues for Gulfstream. Gulfstream represents about 1/3 of our Business Jet sales. On the Challenger 300, we’re looking for a slight increase to about $18 million. Bombardier insists that work on the Challenger 300 is solid. They’ve seen very little customer shuffling of either orders or deliveries. They’ve actually talked about increasing the production rate. Most of the rest of our business is with Hawker Beechcraft – the biggest portion on the Hawker 4000. Once again, we have the orders in place. Hawker insists that they have the backlog and that on this aircraft, there’s been very little in the way of customer schedule changes. They have, we think, seen some weakness on the Premier and we’re showing a decline in sales on the Premier. You put all that together with some other miscellaneous sales in the Business Jet product line and the total is $65 million, up slightly from the $63 million of fiscal ’08.

The other big question in the commercial aircraft business is the aftermarket. We’re now forecasting the ’09 aftermarket at $80 million, down 10% from fiscal ’08 and, incidentally, down 10% from the run rate of the fourth quarter of ‘08, which came in at $22.3 million. We know that the airlines have taken some aircraft out of service, but we, like everybody else, insist that the airplanes they removed have very little of our content. We’re also aware of the expected decline in passenger seat miles, which may be reflected in aftermarket activity, and so we’ve forecasted sales lower than the current run rate. So when we put it altogether, commercial sales are forecasted at $273 million and total Aircraft at $680 million, up only $7 million from ’08.

Aircraft Margins

A few weeks ago, a fund manager, who’d been studying our financials, asked why we don’t talk about Aircraft operating margins pre-R&D because if we did, it would be clear that the decline in Aircraft margins in the last couple of years has mostly to do with the very high level of R&D. Aircraft operating income before R&D expense as a percent of sales for the year ’08 and in the fourth quarter, for that matter, ran about 18%, which is reasonably consistent with historical levels. However, given the level of R&D during ’08, the operating margins came in at 8.2% for the year. In the fourth quarter, margins came in at 7.6%. We took some additional reserves on the F-35 leading edge flap actuation, a fixed-price development contract, and on the Boeing production work. For ’09, we are expecting that our Aircraft R&D expenditures will be down somewhat and therefore our margins for the year will come in at about 8.4%.

Space and Defense Q4 ’08

Space and Defense had another very good quarter. Sales of $62.4 million were up 35%. In a quick summary, the growth is driven by the Constellation program and our two recent acquisitions. We have a number of cost plus development contracts on the Constellation program, most of which relate to the Ares Crew Launch Vehicle. Sales on Constellation in the quarter were $6.5 million, up from $1.6 million from a year ago.

Our recent acquisition of CSA Engineering, a company specializing in vibration suppression and shock isolation, provided $3.6 million in revenue in the quarter. In addition to generating sales, our new colleagues at CSA demonstrated their ability to provide crucial solutions to valued customers. A few weeks ago, the NASA staff responsible for the Ares Launch Vehicle visited East Aurora. They presented an analysis that described a very serious vibration problem on the vehicle, and in short order, the technical staff from CSA outlined the solutions. A few days later, NASA announced that this very serious problem had been solved and the development program could go forward.

Our other major acquisition, QuickSet International, produces revenues that show up in two categories. During the quarter, QuickSet received additional orders for pan and tilt mechanisms used on the Driver Vision Enhancer System and during the quarter delivered $4.7 million worth of that product. We categorize that as Defense Controls and that program provided the growth in that category. In addition to that, QuickSet delivered $3.1 million of product which we categorize as Homeland Security.

Our legacy business in satellites, launch vehicles, and strategic and tactical missiles provided the solid revenue base at just under $30 million in the quarter.

Space & Defense FY’08

The pattern for the year ’08 in Space & Defense was very much like the fourth quarter. Sales were up a remarkable 37% to $253 million. The legacy business was fairly stable generating over 40% of that total. The Constellation programs provided $22 million in sales growth. In the Defense Controls business, almost $33 million in revenue on the Driver Vision Enhancer System drove Defense Controls sales to just under $82 million, an increase of $20 million over last year. The CSA acquisition, which came late in the year, produced $6 million in sales. So, like the fourth quarter, a solid base of legacy business, growth in the Constellation programs, and the new acquisitions made for a stellar year.

Space & Defense FY’09

I don’t think that you would expect our Space & Defense sales to be influenced much by the onset of a recession, and our latest forecast reflects that. We’re currently forecasting for ’09 $276 million, an increase of $22 million or 9% over what we just achieved in ’08. Once again, the legacy products in satellites, launch vehicles, strategic and tactical missiles, provide a solid base of about $120 million in sales, up $13 million from 2008. Here the increase is in controls, already on order, for commercial satellites and in increased production of fin controls for the Hellfire missile to replenish the inventory used up in the Mideast.