Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions). The first question comes from Robert Spingarn from Credit Suisse. Please go ahead.
Robert Spingarn - Credit Suisse
Good afternoon, guys.
Bob George
Hi, Rob.
Robert Spingarn - Credit Suisse
My first question is for Bob George. If you could just give us a little bit more color on some of the assumptions in your '08 guidance in terms of revenues, margins--what kind of run rate [ROE] at CMC for '08 that sort of thing? And, in particular, I am interested in commercial versus military?
Bob George
Okay, Rob, I will start--and maybe Cremin will jump in there a little bit. Again, we've been seeing very nice healthy organic growth rates over the last several year--I think we've been in the mid-double digits--we are seeing, as we said we saw, 16% in the fourth quarter of this year.
Next year, of course, we'll have CMC in for the full year. So, we are looking at a combination of acquired growth for the first five months, and organic growth approximating 10%-15% in the balance of the year. So, we are looking at, give or take, somewhere around $1.5 billion in revenues, without getting too specific.
CMC--we see great opportunities going forward, as we said when we made the acquisition at that point in time. CMC's run rate was about $190 million per year. We are seeing some nice growth in that activity this year; and we are seeing continued growth next year.
Margin. We are seeing a very nice pricing drop through as this identified in our gross margins, we are up about a 150 basis points in the fourth quarter; obviously, on a full year basis, some of that was washed out, because of the purchase accounting effect at CMC. We see that trend continuing, and as I indicated, our tax rate for next year we are expecting to be in the 18%-20% range. As you know, with respect to the commercial and military spilt as round numbers, we generally say we are 40% commercial, 40% military. This year, I think, we've seen a little bit of move, given the strength in the commercial markets, so it's not exactly a 40-40 split. We continue to see strength in our defense markets, however. So I don't think we're going to stray too far from that. I think it would be reasonable to expect, maybe, 45-35. Bob, do you have any comments?
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