Annual Meeting Remarks by Robert T. Brady, Chairman and CEO, 1/9/2008

01 / 09 / 2008

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Here's Bill.

Thanks Bill.

Our Industrial segment had another very strong year in '07. Sales of $436 million were up 14%. Our Industrial segment benefits from strong foreign currencies because so much of our business is conducted in Europe and Asia. But, even excluding the currency effects, we had organic growth of 9% in '07, which is a very strong performance in the markets in which we operate.

In our Industrial segment, we do not try to do everything for everybody. Our strategy is to provide customized, performance-based, motion-control systems and components to ten focus markets. Some of these markets did extremely well in '07. Sales of controls for metal-forming equipment increased by 32%. Sales of controls for steel mill equipment also increased by 32%, reflecting the extraordinary development of the steel business in China. Controls for injection and blow-molding machines, our biggest single market, increased by 14% in '07. But, what we want to talk about this morning is electric-motion bases used in flight-training simulators. This has been a target market for us for a number of years and Dave Fijas, with the help of one of our customers, will describe for you the tremendously important technology innovation, which has had a dramatic affect on our position in this industry.

Dave Fijas was also born and raised in Western New York. He has a Bachelor's in Mechanical Engineering and an MBA from SUNY at Buffalo. Dave began his career with Enidine, Inc. He started as a design engineer and became Chief Engineer. He then moved to HSC Controls. He's been with Moog for 10 years and has worked in the Industrial Controls Division where he became Engineering Manager responsible for the design of a new line of industrial gas turbine actuators and our proprietary line of electromechanical actuators. He became Group VP and General Manager for the Americas Region of the International Group in 2007.

Here's Dave.

Thanks Dave.

At the end of '03, we acquired the Litton Poly-Scientific Division of Northrop Grumman and named it the Moog Components Group. In '06, we acquired the slip-ring operations of the Kaydon Company and during '07, we made two smaller acquisitions, a company named Thermal Control Products and the Techtron Corporation. So, this is the fourth year that the Components Group has been part of Moog and it was another year of spectacular performance. Sales were up 19% to over $283 million. Sales of components to the marine market were up 32%, components used on military vehicles were up 26%, and on aircraft, 23%. About 60% of the Component Group sales are in slip-ring applications. Slip-rings are used on aircraft, spacecraft, military vehicles, undersea robots, CAT scan machines, closed-circuit TV, and a variety of industrial applications. But, in addition to slip-rings, the Components Group produces a number of other products. Among the most important are fractional horse-power, brushless, DC motors sold in large quantity to selected customers. Terry Martin's going to describe our background in the motor business and, more particularly, the automation of the electric motor and blower assembly we supply to Respironics.

Terry Martin is not from Western New York. He's a Georgia boy from Blairsville. He went to Georgia Tech and got a B.S. in Mechanical Engineering Technology. After graduation, Terry worked for Reliance Electric in Athens, Georgia as a manufacturing engineer. Reliance produced medium horsepower electric motors. In '84, he joined a division of Litton, which became part of Poly Sci. He started as a manufacturing engineer in Murphy, North Carolina and he's been there ever since. Over the years, Terry has held various management positions in Quality, Manufacturing Engineering and Operations. He's now the General Manager in Murphy.

Here's Terry.

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