The Constellation program at $24 million will continue at the same level as ’08.

Our Defense Controls product line will actually decline $13 million to $69 million. This all has to do with the Driver Vision Enhancer program at QuickSet. In ’08, we ultimately delivered $33 million worth of pan-and-tilt mechanisms for the Driver Vision Enhancer program. We knew that that program would be smaller in ’09 and that that would be our sales challenge. We have received additional orders so that Driver Vision Enhancer in ’09 should be about $18 million, hence the decline in Defense Controls. On the other hand, we’re looking for an $8 million increase in the Homeland Security market to a total of almost $26 million. Our naval applications will increase from $7 million to $12 million and that’s mostly work on the Virginia class submarine. And, our recent acquisition of CSA will generate sales of $20 million in ’09 because we’ll own the company for the entire year instead of only one quarter. That will be an increase of $14 million. When you put all that together, the forecast adds to $276 million, a $22 million increase. As I said a minute ago, I don’t think we have to worry about either the recession or the election with respect to the ’09 revenues in Space & Defense.

Space & Defense Margins

Margins in the quarter of 9.6% were heavily influenced by the relatively large component of cost plus work. Nevertheless, margins for the year of 11.6% compares well with last year’s 13.1% since last year was helped substantially by the wrap-up of some long-running Space Shuttle contracts. The 11.6% for ’08 compares very nicely to the long-term history in Space & Defense. For ’09, we’re projecting only a slight moderation to 11.2%.

Industrial Systems Q4 ’08

The recession that everyone is now talking about had not found our Industrial business by the fourth quarter. Total sales of $136.3 million for the quarter were up 23%. In the quarter, we were still getting a boost from foreign exchange, but even without that, sales were up 17%. Revenue was up in every major product category, but was particularly strong in motion simulators, in metal-forming and steel-making equipment.

During the quarter, our revenue in the simulation market increased 62% to $21.5 million driven by very strong sales to CAE in Canada, Flight Safety in the US, and a number of smaller customers spread around continental Europe.

Sales of equipment on metal forming machines and presses were up 30% in the quarter to over $12 million. The strength in this business is predominately in central Europe where a number of press manufacturers have selected our controls.

Steel mill equipment sales were up 29% in the quarter to over $13 million. As we’ve said in previous quarters, this is a combination of demand for controls on new and refurbished steel mills in China, and on upgraded mills in Europe, many of which are meeting the demand for higher grade steel generated by the Chinese auto industry.

Industrial Systems FY’08

These same three markets – motion simulators, metal-forming presses, and steel-mill equipment also led the charge for the entire fiscal year with growth percentages ranging from 33% to 56%. In addition to the markets I’ve just mentioned, we experienced 10% growth in plastics to a total of $77.5 million and 16% growth in power generation to just under $50 million. For the year, our entire Industrial Systems product line generated sales of $532 million, an increase of 22% from the year previous.

Industrial Systems FY’09