Good day, ladies and gentlemen, and welcome to the third quarter 2008 Ducommun earnings conference call. (Operator Instructions). I would now like to turn the presentation over to your host for today's call, Mr. Joseph Berenato, Chairman and Chief Executive Officer. Please proceed.

Thank you, Madge. Good morning. I am Joe Berenato, CEO of Ducommun. And joining me this morning is Joe Bellino, our Chief Financial Officer. Welcome to Ducommun's third quarter 2008 conference call. Actually we had two press releases today, our third quarter earnings and a $15 million Carson all-composite helicopter blade contract announcement. Joe Bellino will cover the earnings report and then I will make some comments on the business environment. And at this point, I'd like to introduce Joe Bellino, our Chief Financial Officer.

Thanks, Joe. Good morning. Q3 was the strongest financial performance in Ducommun's 159-year history. As reported earlier today, our net income was up 7% to $6.3 million or $0.59 per diluted share versus $5.8 million or $0.55 per diluted share a year ago. The company had sales of a $101 million that was up 7% from the $95 million in last year's third quarter. Both segments of our business, AeroStructures and Technologies showed sales gains quarter-over-quarter. AeroStructures grew by 7%. It was being driven by higher commercial sales. Ducommun Technologies grew 3%. In terms of mix, we continue to see a gradual shift to commercial sales. The mix of business that we had in the quarter was 56% military; 41%, commercial; 3%, space. And it was compared to last year's same period: 60%, military; 38%, commercial; and 2%, space. Our commercial sales during the quarter grew by over $6 million due mostly to aftermarket commercial sales and Sikorsky sales and were offset somewhat by decreases in some other programs. The ongoing strike at Boeing affected our sales during the quarter by approximately $850,000. As of quarter-end, the company's backlog is approximately $444 million, and this compares to $353 million as of last December 31st of '07. Operating income increased 7% to $9.4 million for the quarter, and that compares to $8.7 million a year ago. Our operating income was 9.3% of sales in the third quarter. We have set goals of getting our operating income as a percentage of sales to double-digit figures on a sustainable basis over the next few years. Our combined income tax rate for Q03 2008 was 30.3%. This compares to 27.7% in Q3 2007. The good news is that due to the recently enacted legislation regarding R&D tax credits, we will record these R&D tax…

Thank you, Joe. In our military markets, we're expecting some softening of the defense spending driven primarily by a lower level of activity in the middle-east and the need to find money to support the government intervention in the financial markets. We're seeing a reduction in our Apache blade build rate sooner then we had expected, on the other hand we're seeing more orders for C-17 Chinook helicopter, which is now in our top five programs and the Carson helicopter blade, where we announced additional orders in the press release today. So, while there may be some softening to the DOD budget, going forward, I don't foresee a major shift since terrorism, Iran, China and Russia are all still out there. In the commercial marketplace, my expectation and I hope I am wrong about this, is that the Boeing strike probably goes to January. We have been building at lower rate since early September, and of course Boeing has only been warehousing the product that we send them. And we will continue to build at those lower rates for some time after the strike ends as Boeing uses up what we're currently shipping to them. So, certainly Q1 2009 will have some impact of the lower build rates. On the other hand, despite the economic slowdown we're experiencing across the economy, we do not anticipate a significant downward revision of the Boeing build rate in 2009 once the strike is over, and we continue to win new business or new program, such as that the winglets awarded earlier this year, which will support our commercial sales ongoing growth. Internally we are 10 months now into our One Ducommun reorganization. I'm very pleased with the results, we haven't missed the bee as we continue to drive Lean Six Sigma and further develop our shared services across the company to take advantage of our strength and to enhance any areas of weakness. Our growing backlog and our strong financial performance are indications that we remained focused on our customer, which is one of our core values. So while we see some softening in our commercial and military markets going forward, we still expect to have positive internal growth in 2009, because of new contracts awards and program wins as we continue to broaden our capabilities and become more important to our key customers. With that Mage, Joe and I would like to answer any questions that people may have.

(Operator Instructions). Your first question comes from the line of Edward Marshall from Sidoti & Company. Please proceed. Edward Marshall - Sidoti & Company: Good morning, guys.

Good morning.

Good morning. Edward Marshall - Sidoti & Company: The question is, the first question anyway, you said that Boeing was continuing to take shipments through their downtime here. My question is, if Boeing is out now till January like you're saying, how long do you think that they will continue to take shipments, and at the same rate?

Ed don't know, certainly I would think that if we got into November and the strike hadn't been settled, I mean deeply in the November, they may look to further revise downward the shipments. In our 10-Q, which came out this morning, we talked about the fact that we expected sales in the fourth quarter because of the Boeing strike to be down between $5.8 million and $7 million in sales and the range really tried to address the possibility that they might further reduce the build rate during the fourth quarter if the strike really did run to year end. Edward Marshall - Sidoti & Company: Okay. That said, the absorption rate of the $5 million to $7 million, how easy is it for you to kind of maintain the same kind of margins that you have, the operating margins, obviously, I mean there is going to some impact but can you quantify the impact that you may feel granted that you're carrying a lower sales rate and have the same operations.

What we're trying to do here, of course, is to try to maintain good results. We've had a reassignment of some people on to other new programs that we've won. We've conducted a limited number of reductions in headcount where we were unable to reassign people. So, we're looking to try to control the overhead with the lower volume on the Boeing programs. Quite frankly, our biggest defense is going to be the work on other non-Boeing programs, which will absorb both the labor and the overhead. So, our success in doing that will really determine how successful we are in maintaining margins. Edward Marshall - Sidoti & Company: Okay. Then the last question, $853,000 impact in the third quarter here, when did you kind of go to the lower production rate?

Probably by the 10th of September, rough number. I mean Boeing was pretty quick to come to us to start talking about what the build rates ought to be. You slide down to wherever they're going to take you. So, it's not as if on September 6th we immediately reduced build rates by X percent. We worked our way down. Edward Marshall - Sidoti & Company: So, if the talks that are ongoing right now through mediators kind of deteriorate, we would assume that probably Boeing would react in a haste of fashion and kind of get that information to you as fast as possible?

Yes, if you take a look at just as a rough number, we said in the fourth quarter between $5.8 million and $7 million in sales. So three months divided into that, says roughly $2 million a month in sales. We felt $850,000 of that in September. So you can see that we were gliding down to where they wanted us to go, and it's possible they may take us further as we go further into the quarter. Edward Marshall - Sidoti & Company: Okay. Thank you, guys, very much.

Your next question comes from the line of Michael Lewis from BB&T Capital Markets. Please proceed. Michael Lewis - BB&T Capital Markets: Yes, good morning.

Good morning Michael Lewis - BB&T Capital Markets: Joe, I was wondering if you could walk us through some of your assumptions on pension and pension impacts next year. Will you have to put in cash to work there?

It terms to the pension, we think we'll see some mild impact. We may have to put a little money away. I think we were planning to put some money away anyway. But I don't think we're going to see a major change to what our plan was. Certainly, as with everybody, they have seen the pension assets come down, but these calculations were all done on a smoothing basis, and we had put some money into the program, I think, two years ago, and we were planning to put little bit more this year, might be little higher than what we had originally anticipated. But we are not in a draconian shape. The pension program is only a one facility to Commons. So it isn't across the entire company. So, I think it's pretty manageable. We are still trying to calculate exactly what we're going to do. We have better picture at yearend, Michael. What we do now with all the gyrations that are going in the market place is looking at the present value of the cost structures too. Michael Lewis - BB&T Capital Markets: All right, that's fair. Can we shift gears here for a second? I want to talk about the technology business with regard to margin. If I look at the worst three quarters last year on average, you ran a margin of about 5.9%. The run rate for this year is about 5.5%. So I 'm just wondering what is causing the difficulty in operating margin at the technology businesses. Is it one specific area, one specific problem contract? Can you help us understand what's going on right now? What is the expectation we should have for this business over the next four to six quarters with regard to margin?

The issue is at two facilities, Phoenix and Newbury Park. At the Phoenix facility, we have some contracts that don't give us much in a way of margin. During the second half of '08, we have renegotiated virtually all of those problem contracts, and we'd expect to see better margins in Phoenix in '09. Likewise at Newbury Park, we have been spending a lot of money because of a legacy computer system that they have there, and we have just brought them up on our bond system. So, it integrates as part of the 'One Ducommun' situation. It integrates them into the rest of our company. It gives us better data on which to make decisions, because the homespun system really can give you enough information to understand what your costs were. So there too, I think we see a few contracts that have less favorable margins than we would like. We are on an earlier stage there. We're working to renegotiate those contracts. But we think that with better visibility to their cost structure that business will return to better profit margins in '09. I have a second point that was really brilliant. We really think that we will see a stronger margin at the Newbury Park in '09, because we will be available to reduce the fair amount of overhead that's been used to try the work around the inadequate financial information system that existed there. So in both cases in Newbury Park and the Phoenix, we expect to see better performance in '09 than we have had in '08. Michael Lewis - BB&T Capital Markets: That's very helpful. Just one last question, I will get out of the way here. You had provided a new disclosure in the queue. You noted that you had $6.3 million in Q3 commercial after market. I was wondering if you add the year-over-year comparison, what was it same time last year?

This is Joe Bellino, Michael. When we look at it, we put it in the queue, because it is becoming significant. We are up $6 million quarter-over-quarter, '08 versus '07 and for the year-to-date we're up $13 million. Again that's one of the programs, one of the several programs that is offsetting here some of the impact of the Boeing strike and so we are very pleased how that market segment and those products are doing? Michael Lewis - BB&T Capital Markets: Let me understand this. You said that you are up $6 million year-over-year, so as $0.3 million last year, now its $6.3 million.

When we look at our bridges and total after market and this is primarily in the commercial area. We are up $6 million in the third quarter of '08 versus '07, and year-to-date we are up $13 million in that. When you look at our overall business, we are up almost about $20 million in our commercial business year-over-year. There are several pluses and minuses but the aftermarket comprises about $13 million of that. Michael Lewis - BB&T Capital Markets: Is there any specific area that you are seeing this significant strength or is it broad-based?

It is pretty much broad-based.

Mike? Michael Lewis - BB&T Capital Markets: That's it. Thank you, guys.

Thank you.

Your next question comes from the line of [Christy Dess] from (inaudible). Please proceed.

Hi yes, good morning.

Good morning.

Good morning.

A little bit about your 787 business. Do you see this business has picked up at all or is it still in hold and could you also provide some information on where you see the run rate shift that value for the business to be?

We don't talk about shipset value per aircraft. But right now, the contribution is virtually nil. We have several contracts to provide revenue on this airplane. But, everything is pretty much on hold except for continuing to get first articles completed and approved to the customers drawing. So, we expected to have by now more sales in terms of electromechanical assemblies and wiring harnesses and even a little bit on the structure side. But, we are really delivering only a minimal amount in the couple of these areas. We think it's going to be a terrific program down the road and the way it typically works for us as a second or third tier subcontractor, once production starts going that's when we win more contracts. Because when the prime or the first tier really gets ramping up, and has proven out what the product is that they are making, that's when they looks to offload it. If they try to offload it too early, and then they just have a lot of engineering changes, it creates a lot of confusion when you are going back to a sub-contractor repetitively with new design elements. So they try to get it stabilized first before they offload it. So we would anticipate that once the build rate starts to pick up on this program, we'll win more contracts on it as well.

Okay, great. Thank you.

Your next question comes from the line of Bobby Melnick from Terrier Partners. Please proceed.

Thank you. It's Bobby Melnick with Terrier Partners. I wondered if we could shift a little bit to more strategic question. You're kind of an unusual smaller micro cap company here and so far as your results have been exemplary. You're profitable, cash flow positive, very liquid balance sheet, very moderate, principal and contractual obligations. You've articulated in past very publicly a desire to grow the company through acquisitions, and that there are lot of opportunities out there, you've had a good successful track record in integrating acquisition in the past. My question is a strategic one, which is how do you assess really tumultuous or unprecedented without sounding dramatic changes that have occurred in the credit environment and in the valuation environment if you will? In other words, even a company with your results certainly hasn't avoided the down draft your stock has been cut half in the last two months as have many, many, many companies both within and outside your industry. So, as you sit there with this liquid balance sheet with an express strategy of growing via acquisitions, do you landscape and say, we are better off playing caution here and waiting to see how this unfolds? Do you say, now is an opportunity to repurchase our shares? According to your Q this may prove to be fortuitous since your equity is not trading two-thirds of the value? Or do you say, now is really a once-in-a-two-decade or a decade opportunity for the corroboration to go out and maybe acquire companies that have equally seen their valuations decline? As you look across the landscape, whatever valuation parameters you had had prior to the downdraft; in other words, if you're prepared to pay an 'X' multiple of cash flow, are you still prepared to do that for acquisitions and incur some dilution? Or are you saying the equities that we are looking at, if they are public equities, we're trading at nine times cash flow now or they're trading six times cash flow, five times cash flow, and we're going to come in and try and buy them seven, eight times cash flow? So, I think you understand the gist of my question. How do you strategically assess what has happened and weigh that vis-à-vis your strategic objectives? Thanks.

When you take a long view, we're in a business that grows about 4% to 5% a year on average. I mean it's a cyclical business and you have ups and downs. But when you look at the long run, it grows around 4% to 5% a year. We're committed to growing and growing the acquisition, but we have historically been fairly cautious. In 2007, there was a lot of product on the market in the first half of the year, and we've been on a number of auction-related activities. What we found was that we just couldn't get to the prices that were being successful. Private equity was ruling the day. They were getting there by very high levels of leverage. If you go back five years ago, if you got the four to five times EBITDA in debt, that was really stretching the envelope. We were looking at a large acquisition and an investor banker came in and said, we will finance this for you at 7.5 times combined EBITDA of you and the potential acquired target. My reaction to that was to say to him that you are willing to give me more money than I ought to take. We dropped out of the biding instead, because I am willing to take some risk. In these situations, you have operational risk and you have financial risk. If I am going to take a lot of operational risk, I don't want to take much financial risk. If I want to take a lot of financial risk, I don't want to take much operating risk. So a large acquisition at very high leverage has high risk in both areas. So we were unsuccessful in the first half of '07, even though we saw properties that we would have liked…

Very helpful. Thank you. Would it be fair to assume then from what you just said that it would be the company's preference to maintain dry powder rather than the buyback, company shares even at as you say threefold multiple of EBITDA and obviously very tempting and value enhancing accretive share repurchase?

I wouldn't say that either. For us, it's five uses of cash. Working capital investment, capital expenditures, pay down of debt, acquisitions and return to shareholders and the return to shareholder can either be through dividends or buybacks. Earlier this year we initiated the dividend which was a statement by us. I think that we felt that our long-term prospects were strong, because you don't want to initiate till it ended. You know that in the not to distant future you may have to decide that you can't afford to pay it, so we think our long-term prospects are good and that's why we initiated the dividend. We did a stock buyback in the 1998 to 2000 period, where we bought back 15% of the company, 1.9 million shares for about $25 million, so the average price that we paid was $13.23. So it is the case that we would be willing to spend money for a stock buyback when we thought A, the buyback was compelling and B, that there weren't other higher competing uses for the cash. So it's not that we have a negative bias toward buyback, but we've got to look at it in the context of everything else that we are doing. It's certainly one of the options that the Board discusses periodically. I did have another investor tell me that he did not like it when companies made buybacks. I asked him why, and he said, because they always buy back at the wrong price. I think when we bought back in '98 to 2000, that was the right time to do it. If we buy back stock again in the future, it will be because we think it's the right time to do it, as we look at the competing potential uses for cash. But as we sit here today, we essentially have no net debt, and that's a great place to be. We are looking at our working capital needs, our capital expenditure needs. We are looking at potential acquisitions, and we are looking at how we return capital to the shareholder as appropriate.

Very helpful. Thank you very much.

Your next question comes from the line Troy Lahr from Stifel Nicolaus. Please proceed.

Thanks. Could you talk a bit about the change here on the Apache program, kind of a surprising slowdown? I thought it was going to be a little further out. It's something you were a little surprised too? Can you maybe talk a little bit about that and then also the backlog there for the Apache? It still seems like it's pretty healthy. Then how do you think about the offset to these programs, Apache and Eclipse coming down, I would think Eclipse is going to be a little lower, so you need to win some programs going forward? Can you talk a little bit about those two things?

Sure. When you look at the Apache, we thought the slowdown in rate would be low further out too. This is not Boeing doing request for lower rate. It comes directly from the end-user, which is the US army. So without knowing anything specific, it would say to me that they would anticipate a lower usage of the Apache in the Middle East and has previously been the case. Frankly, we had been expecting the build rate to stay the same or come down a little. So coming down in half was kind of a surprise to us. Now, the order we got was the same dollar amount. It's just that instead of delivering over 12 months, we'll deliver over a somewhat longer period of time. Let's say 20 months. So that's why the backlog looks strong, and we'll continue to deliver on that. It’s about $60 million. As we get toward the end of that, we would expect another order. So, the program I think has legs to run. There maybe a change to the build rate down the road. But I don't think the Army is frivolous about these things. So it must be they'll consider the opinion that this is the right build rate. But they obviously have the flexibility to raise or lower it based on these. I said earlier that I was surprised that it was so soon. I wouldn't be surprised to see the build rate moderately go back up again later in '09. But that's an uninformed opinion. I just look at what the build rates have been historically on this program, both pre Middle East usage and during the Middle East. So it may go up again and may not. It'll still one of our top five programs. It will still have…

Okay. Then just kind of follow up on that. Originally I thought, you had to win three programs to kind offset some of these eventual declining revenues from C-17 and Apache with Apache kind of decelerating little faster. You have the Carson and Eclipse, do you kind of consider Chinook ramping up as maybe kind of half of the win there? So now you really only still need to capture one more big program or do you think wait at this point with Apache coming down quicker you probably need to pick up two more big contracts?

I think a couple of things, one is I would call Eclipse the half of the program now instead of the full program, in terms of what we need to win. I think Chinook is a full program in the wing column. I think with Apache coming down a little faster than abated, I still think we need to win two more full programs and we have a number of luminaries sites and I would expect that we will get at least one of that before year end.

Okay that's helpful. Thank you.

(Operator Instructions). You have a follow question from Edward Marshall from Sidoti and Company. Please proceed. Edward Marshall - Sidoti & Company: Good morning, gentleman it's Ed Marshall from Sidoti.

Hello Ed.

Hi Ed. Edward Marshall - Sidoti & Company: The question is the run rate of Boeing. The 31 and let's concentrate on the 737 because that's the main program for you guys here, although the 777 is program as well. But the 31 shipsets that they were sending a month. Or a let's say 30 plus shipsets a month. When they get back to business, how fast do you think that they can ramp up to that 30 shipset or month or more? Can they do it by the second quarter or is it going to take a little bit longer by your thoughts? I know that's a tough one to answer.

It is a tough one. I would think that they have a strong incentive to get bagged up to full build rate as quickly as possible. But what I have liked about the Boeing management in recent years is that they don't over commit as perhaps they did in the 95, 98 up cycle. So if you remember there was a lot of pressure from their customers to open the second 787 line out so that they could deliver faster and sooner. They resisted that and I think that was smart because obviously they've had difficulties with that line and it would have been twice as difficult if they had two lines. So I think they're playing these things smart. What they've told us is that when they get back online that you they're going to bring the build rate back gradually in an ordered fashion and that they don't intend to go over the 31 a month. I personally believe and this is unfounded, I personally believe that they will go over the 31 per month because they've got a lot of people asking for airplanes. But I like the fact that they're not over committing or over promising, so my guess is that by the end of the second quarter, or at the latest they'll be backed up to whatever the build rate is that they want. Now if the strike end sooner, I still think it's going to take into the second quarter, because once you get into November, there is really not a lot of benefit for Boeing to come back to work. The people would come back to work they start building the line backup then the Thanksgiving holidays would come. Then they come back from that and they start building line back up and then lot of people would be going for a holidays or possibly even shutdown. So the only advantage, again my opinion only, the only advantage for Boeing to come back before the end of the year is if they got a contract that they thought was very acceptable to them, and the emotion that I see on the union side would seem to indicate to me that there isn't going to be that kind of contract readily available. So, that's why I think the strike goes to January and why it will take some time in the second quarter for them to get back to full build rate. Edward Marshall - Sidoti & Company: So, that being said, let's use that as an example, end of Q2 run rate being that you're probably at about half production right now on the 37. Does that mean that lag time won't pick back up so that you see your 737 business kind of double production by the time Q3 comes around?

Well, what you see is that for them to get back to 31, I have get back there earlier than they do, because they need my stuff. Edward Marshall - Sidoti & Company: My question is basically you're producing for the fourth quarter here and are not building planes. So there is some catch up time that Boeing is going to have to kind of meet up that supply that you already supplied them?

Right. That's why say that Q1 2009 will be impacted, because we'll be building at the lower rates in the first quarter regardless of when they come back from the strike. Edward Marshall - Sidoti & Company: I see.

Then some time in the second quarter, we'll get back up to build rates, and it will be function of when the strike ends to how quickly in the second quarter we get build rate? Edward Marshall - Sidoti & Company: Okay. The second question I have as a follow-up was, I couldn't help but notice that it was were pretty decent cash flow generated in the quarter. It looks like about $01.37 per share. But I also couldn't help but notice that the receivables came down quite substantially over the June quarter by about $8 million. That's some characteristic. I was just kind of curious as to what drove that other than better collections?

Ed, this is Joe Bellino. I really do believe that it's part of our relationship with our customers and those kinds of things. You recall you see our business cycle where quarters two and three are generally the strongest in terms of sales and the fourth quarter gets a little lower, so that our receivables at the year-end are probably at the low point of the year. You were talking about relative to June to the third quarter. It is true. It's a function of, in this environment, I think been a little bit ahead of the curve and working through some issues with customers to collect some items that were unresolved and being well positioned coming of the fourth quarter. When you look at our statement of cash flow from operations at the end of the year, you will see generally speaking we do quite well in the fourth quarter in terms of even improving our cash flow in that fourth quarter and part of that because our level of sales generally go down sequentially, and so we are able to collect those receivables that were built in previous month. Edward Marshall - Sidoti & Company: Okay. The final one that I had for you was, you touched on the Apache program. I mean to me, it's a substantial cut. It's a half of what you're expecting. Am I reading that correctly that you're expecting about 50% of the sales that you booked this year next year?

Yes. Edward Marshall - Sidoti & Company: Okay.

Yes. So, that's why it's so important that we have been able to win other programs to really minimize the impact of that. Edward Marshall - Sidoti & Company: My question is you talked about a few programs that you think can help drive the military segment. I am curious to get your opinion, and I know that you don't give guidance, but despite the fact that the Apache program is coming off, do you think that you can still see growth in the military segment going into 2009 or are we going to see somewhat of a slower growth going forward?

What we have said is that we expect higher sales in '09 and '08 across the company. But I am not prepared to comment on that by segment. Edward Marshall - Sidoti & Company: Okay, fair enough. Thank you, guys.

Thank you.

Your next question comes from the line of Michael Lewis from BB&T Capital Markets. Please proceed. Michael Lewis - BB&T Capital Markets: Joe, I was wondering if you had any expectations with regard to buildup in Black Hawk business next year.

We're on the Black Hawk program, and we have one additional order there. So, yes, I mean I think we'll see some additional growth on Black Hawk. Michael Lewis - BB&T Capital Markets: Okay. So there are a few programs here that are legacy programs that we could see some slight increases that could offset some of the burden that we're going to witness in '09 off Apache. Is that safe to assume here?

Yes. Without trying to sound Pollyannaish, because there is a lot of gloom and doom out there, and as I said earlier in my comments, the government is got to find some money some place. But I don't envision the defense budget coming down by a lot because of the reasons I've mentioned earlier. Russia is rolling its Saber. Not too long ago, a Chinese sub surfaced within torpedo range of an aircraft carrier, and it wasn't detected. It scared the hell out of the Navy. There are a lot of needs and requirements in the defense budget that are still going to get funded. There may be a couple of big programs that get pushed further out because of the need to come up with some money. Again, I have no insight on this. I think we're not going to see much more in the way of F-22 bills, because the case just isn't there for what the threat is, once you have over 180 of these aircraft. So, Joint Strike Fighters is coming on line. Maybe it will come on the current schedule. Maybe it will get stretched out. FCS, the big communication program, Future Combat System, may get pushed out a little bit. But I don't see these things going away. On a number of these programs, I see our sales increasing. As I said, we were surprised that the drop in Apache build rate, and we'll see if it stays where it is, but we've got other stuff where we're growing in sales, both military and commercial, and as I said, we expect to have higher sales next year than we did this year. So even with the drop in Apache, we're going to show internal sales growth and I stress internal, any acquisitions would just be adders on top of that. Michael Lewis - BB&T Capital Markets: Okay. If I could just circle back to a prior question on the shipsets from Boeing on 737, normal sustain rate's 30, 31, 32 per month; what are you building right now, and how many shipsets is Boeing taking delivery off? Could you give us a little more information there?

Well, it's a moving target. If you look at it on a per-week basis, we're delivering at 30 shipsets a month; we're delivering 7.5 shipsets a week. We're down to either four or below shipsets a week, and there is no guarantee that the number will stay there, the longer the strike goes, greater the likelihood that that number will come down further. So that's why we try to give a range for the fourth quarter of saying that the sales would be down between $5.8 million and $7 million. You can start doing some calculations looking at what our sales for the year were on that program divided by four then see what percentage $6 million to $7 million in sales is and get to the same place as I have got to. So, it's unknowable to us though what the exact number of ship sets we will deliver in the fourth quarter. Of course sooner the strike ends the better. Michael Lewis - BB&T Capital Markets: Okay. Currently fourth quarter consensus estimate for revenues is $97 million, you have in your $290 million of the backlog is expected to be convert to revenue in the fourth quarter. So, where I am going here is, it looks like we have significant price best revenue visibility we've had in the fourth quarter in many years.

Well, let me say something about that. You never deliver all the backlog that you think you have in the quarter for a variety of reasons. Customers come in and tell you to slowdown, supplier doesn't send you something you need, so you can't ship it. In our business on the AeroStructures side, you enter the year with pretty much the whole year in backlog. On the technology side that isn't true. In fact in our Carson facility, they will book in ship a substantial percentage of their sales within a quarter. So, $90 million in backlog isn't a limitation lets say on what the sales could be in the fourth quarter. We would expect as when you look at us historically and as Joe said earlier, our best sales quarters are the second and third. Our weakest sales quarters are the first and the fourth. So we did a $101 million at third quarter and if the trend held, we would see less than that in the fourth quarter. But again the Boeing strike will have a big say in that because we could see lower sales to Boeing than we are anticipating, if the strike does really drag out to January or if the strike is settled maybe we'll be at the higher end of the expected number of deliveries. There is a lot of uncertainty and unknowable's as we come into this fourth quarter. But regardless of all of that this is going to be the best year in the 159 year history of the company, and we anticipate that next year we are going to have higher sales than we did this year. We are very comfortable with the dividend and the notion that we are going to be able to pay that dividend in the foreseeable future. So while things are very gloomy right now, we still think we have got a lot of good stuff going on over the next four or five years in this segment. Michael Lewis - BB&T Capital Markets: Joe just I agree 100% with that but where I was going was that with regard to the $5.8 million to $7 million.

Yes. Michael Lewis - BB&T Capital Markets: That expectation that you basically said was at risk from Boeing is not a part of that $90 million backlog figure. Is that the safe assessment?

I see. Michael Lewis - BB&T Capital Markets: In other words, did you pull that out of your backlog?

Yes. The $5.8 million to $7 million is not part of the $90 million. Michael Lewis - BB&T Capital Markets: So $0.01 --?

It would have been $5.8 million to $7 million higher the backlog had the strike not occurred. Michael Lewis - BB&T Capital Markets: Okay. So, essentially our visibility is stronger in the fourth quarter?

Yes. I mean in that regard, yes. Michael Lewis - BB&T Capital Markets: Okay. Thank you very much. I appreciate it.

You have no question at this time, sir.

Okay. Well, let me just say then that in conclusion, we have a strong balance sheet. We have good cash flow. We flow free cash flow every year. We have an intention to continue to look and make acquisitions. We look forward to reporting to you in February on the best year in our history. We hope that we have even more clarity in February than we do today. Thank you very much for attending the call. Madge, it's back to you.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Good day.