Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from the line of Michael Ciarmoli with Boenning & Scattergood.
Michael Ciarmoli - Boenning & Scattergood
Hey, guys. Thanks for taking my call. Pete, I know you went into a pretty good detail about the '08 outlook. I can understand the R&D spending. It sounds like there's a lot of great programs out there. The pipeline looks good. You're not seeing any deterioration in the market conditions. I tend to look at some of the other aerospace names in the group, particularly BE Aerospace as a good proxy, maybe of your business. And the 7% growth, it just seems excessively conservative. I know, in the past, you guys have given very conservative guidance. Over the past three years, you have tended, in the beginning of the year, you have laid out a number and you beat that number almost every year by more than 10%. On the last quarter, you gave a 10% to 20% outlook for '08. Now, it's 7%. What's really changed? And is this a case of you guys being just overly cautious again? Or I know you have said some of the retrofit business is winding down, but it just seems to go from, I didn't think the extreme level of 40% growth could last, but you go all the way to 7% and below your kind of initial outlook after the Q3 call, what's really changed out there. If you can give me some, I guess more rationale on how you are forecasting the business that will be helpful?
Peter Gundermann
Okay. First of all, just as a philosophy even though it may appear that we are really, really conservative in our forecasting, I would suggest to you that rather its been a situation where we have been pleasantly surprised by the size, magnitude and quantity of our wins on the retrofit side over the last few years. I think in many respects we tend to be pretty accurate. In fact, on new airplane launches if I were to take you through the number I could show you that, I think we are more accurate than our customers are, in forecasting how many airplanes they are going to build.
But that being said, what's changed since the end of the third quarter, well one thing is we are one quarter late and we don't have any of these retrofit programs that we have been pursuing. There is a kind of germination period that has to happen, it's one of those deals where you pursue it, you pursue it, you pursue it, you pursue it, a lot of times a major retrofit program like, I'll use Air Canada as an example, and this may not be exactly factually accurate but that's a program that we knew about for may years and made many proposals and had to do some development work and you wait, and you wait, and you wait, and they say they are going to make it work and they don't, and they don't, and then finally they make one, and then it is go, go, go.
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