Operator: Good day, ladies and gentlemen, and welcome to the AAR Corporation's Fourth Quarter Fiscal 2010 Earnings Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions follow at that time. (Operator Instructions). As a reminder, today's conference is being recorded.
I'd now like to turn the conference to your host Mr. Tom Udovich.
Tom Udovich - Director of Financial Planning & Analysis and IR: Thank you, Amy. Good morning, ladies and gentlemen, and thank you for joining our fourth quarter fiscal year 2010 earnings conference call.
Before we begin, we must remind you that comments made this morning may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We ask that you refer to the disclaimer contained in our news release, as well as risk factors section of the Company's May 31, 2009 Form 10-K. In providing forward-looking statements, the Company assumes no obligations to updates to reflect future circumstances or the occurrence of anticipated or unanticipated events.
At this time, I'd like to turn the call over to our Chairman and CEO, David Storch.
David P. Storch - Chairman and CEO: Thank you, Tom, and good morning, everyone. Joining me today in Chicago is Tim Romenesko, our President and Chief Operating Officer; and Rick Poulton, our Chief Financial Officer.
Now, we reported our fourth quarter fiscal year 2010 results yesterday afternoon. I hope that you've had a chance to review our press release.
For the fourth quarter, the Company reported sales of $372.3 million and net income of $11.2 million or $0.29 per diluted share. During the fourth quarter, sales to Government and Defense customers increased 17% year-over-year, principally reflecting the impact of the Company's acquisition of Aviation Worldwide Services, which closed in April 2010.
Sales to Government and Defense customers in the fourth quarter represented slightly more than half of our consolidated revenues. In fiscal 2010, sales to Government and Defense customers were approximately 15% of total sales. So, we have seen a meaningful increase in business in this market as we have become a broader and more diversified Company, serving a much wider customer base. If you look at that growth in that timeframe, you would have seen customer move along from Air Force, to Navy, Army and now USTRANSCOM.
Also, please appreciate that the majority of our revenue is coming from the O&M portion of the Department of Defense budget, which is less susceptible to budget cuts.
Throughout fiscal 2010 we experienced lower demand from our commercial airline customers as they adjusted their maintenance spend in light of lower capacity and looked for ways to reduce costs and conserve cash. Recently, the airline industry is experiencing a recovery as capacity is beginning to be added back into the system as passenger traffic has been increasing.
During the fourth quarter, we did see an increase in sales to our airline customers versus the third quarter. However, margins were under pressure in what continues to be a very competitive pricing environment. Going forward, I remain optimistic on our longer term prospects in the commercial market. We have built a sold position as a leading independent provider of aftermarket support and MRO services to the airline industry and I believe we are in an excellent position to benefit as the commercial markets recover.