Most of the other major product lines in Space and Defense were remarkably stable. The satellite market produced $13.4 million in revenue, about the same as last year. If I add revenues in launch vehicles, strategic missiles, missile defense, tactical missiles and naval applications, the total in this year's quarter was $14.4 million compared to $14.3 million a year ago.

In May of this year, we announced the acquisition of CSA Engineering Inc. CSA is a specialist in structures used on space vehicles for shock isolation and vibration suppression. CSA's applications include satellite payload isolation systems, tuned mass dampers for vibration control and a jitter-reduction control system for the Airborne Laser Optical Bench. This acquisition added $2.4 million in sales for the quarter.

Our most recent '08 forecast for Space and Defense was $246 million. This quarter, we're making some small adjustments in various product lines, but the major change is the addition of about $7 million in revenue from CSA Engineering. So, our current '08 forecast for Space and Defense is $253 million.

Space and Defense Margins

Margins in the quarter were a respectable 11.7%, down slightly from last year's 12.9%. In last year's quarter, we were still wrapping up some profitable Space Shuttle contracts. Our most recent projection of margins for the year was 11.2%. Given the performance in this quarter and what we expect in the fourth quarter, we're now increasing that forecast to 11.9%.

Space and Defense Forecast for '09

The growth challenge for the Space and Defense Segment in '09 comes about because of the extraordinary orders that QuickSet received for Driver Vision Enhancement in '08. In the first three quarters of '08, we delivered 7,600 Driver Vision Enhancement Systems producing over $28 million in revenue. In '09, we expect that there'll be some DVE sales, but nothing close to $28 million. Nevertheless, we're expecting higher revenue on the Constellation program, in launch vehicles, in tactical missiles, homeland security, and naval applications. And, we're forecasting $20 million in revenue for our newest acquisition, CSA, a $13 million increase from this year. So, when we put the picture together, Space and Defense sales for '09 are forecast at $270 million, a 7% increase over '08.

We are anticipating that cost-plus development work, which is less risky, but lower margin than fixed-price work, will be a more dominant factor in '09 and our margin projection, therefore, is at 9.8% for the year.

Industrial Systems Q3 '08

Our Industrial Segment had a spectacular quarter. Sales of $143 million were up 28% from a year ago. There was a currency effect as a result of the stronger Euro and Yen. However, setting that aside, our organic sales increase in the quarter was 17%. Given the markets in which we operate, that's an outstanding achievement. Sales were up in almost every major market area. The one exception is the market for specialized test equipment where some projects have been rescheduled for later delivery.