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steel rolling mills, particularly in Asia. The material test market provided a 15% sales increase; and sales increased almost 20% on the industrial equipment we provide for defense control systems used on military vehicles. Another of our specialty areas is servovalves used on Formula 1 race cars. 

Of equal importance to our original equipment sales to the Industrial markets are repairs and overhauls, which we continue to cultivate. These efforts resulted in a 14% increase in IndustrialGLYPH<213>s aftermarket revenues. 

## Acquisition of Poly-Scientific 

The acquisition of the Litton Poly-Scientific Division of Northrop Grumman was a big deal for us. It will be our fourth reporting segment and will be referred to as Components. WeGLYPH<213>ve acquired a company with a broad range of products and a similarly broad customer base — some of which is new to us. It is, we believe, the worldGLYPH<213>s largest producer of electrical slip rings. The product lines also include aircraft instrumentation and other electrical components used on aircraft, and a strong concentration of industrial brushless DC motors, many of which are used in medical equipment. This new segment will represent close to 15% of our sales in GLYPH<213>04. We look forward to the assimilation of all these assets into the global Moog. 

## Equity Offering 

All in all, we made a lot of progress in various product lines in GLYPH<213>03. But, we shouldnGLYPH<213>t close the book on GLYPH<213>03 without noting the remarkable increase in the valuation of our company. On the sixteenth of September we sold an additional two million Class A shares, bringing our equity base to over 

seventeen million shares. Based on the stock price at the end of GLYPH<213>03, our market capitalization had grown to $676 million, an increase of $225 million over last year. We believe that the market has finally begun to appreciate the consistent performance in earnings and cash flow made possible by our uniquely balanced revenue base. 

## Outlook for ’04 

Given our projections of margin performance, and a further reduction of interest expense in fiscal GLYPH<213>04, we expect continued improvement in our companyGLYPH<213>s profitability. HereGLYPH<213>s how we think our four segments will perform in the upcoming year: Taking into account the extraordinary growth in the military aircraft business in the last two years, weGLYPH<213>re projecting only a modest increase for Aircraft in GLYPH<213>04. WeGLYPH<213>re projecting a similarly modest increase in our Space business. WeGLYPH<213>re more bullish about the growth prospects for Industrial since we think that weGLYPH<213>re through the down cycle in the U.S. sales of turbine controls. Adding in the contribution of Components, weGLYPH<213>re projecting sales for GLYPH<213>04 of between $920 million and $940 million, net earnings in the range of $54 million to $58 million, and diluted earnings per share in the range of $3.10 to $3.30. Results anywhere in that range will continue our record of double-digit growth in earnings per share. 

We have every hope and expectation that the overall results weGLYPH<213>ll achieve in GLYPH<213>04 will validate the judgment of our new investors and the loyalty of our long-term shareholders. 

Respectfully submitted, 

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Back row left to right: 

Bob Maskrey Chief Operating Officer Bob Brady Chairman, CEO Bob Banta Chief Financial Officer Joe Green Chief Administrative Officer Steve Huckvale Vice President Dick Aubrecht Vice Chairman 

Front row left to right: 

Phil Hubbell Vice President Jay Hennig Vice President Warren Johnson Vice President Marty Berardi Vice President 

