The spectacular 25% sales increase in fiscal '07 was driven, of course, by the Defense Controls product line, and particularly, the Light Armored Vehicle program for the Marines and the work on Future Combat Systems. LAV will finish up in '08 with sales of less than $5 million compared to almost $18 million in the '07 year. Future Combat Systems will run at half the $10 million level of '07. So growth of over 20% in the rest of Defense Controls will still result in a sales decline in that product line from $62 million to $51 million.

In spite of reduced sales in Defense Controls, we will experience modest organic growth in the Space and Defense Segment. It will come about because of the big increase in workload on the Constellation program. We now expect this program to generate about $22 million in sales in '08. This is a $9 million increase from our forecast of 90 days ago. A lot has happened on this program and our position continues to expand. On the other hand, in the launch vehicle business, we have zeroed out our previous forecast for commercial space transportation programs, a drop of $11 million from ninety days ago, but added back $3 million for a new start on the Taurus II. Other than those changes, revenues from satellites and space vehicles, missiles and missile defense, and naval applications are about the same as our last forecast and about the same as '07.

The other big story for the Space and Defense Segment in '08 is the acquisition of the QuickSet product line. When we announced the QuickSet acquisition, we forecasted an '08 sales impact of $32 million. Recent order activity suggests that '08 will be closer to $36 million. Quickset is primarily a play in Homeland Defense. Much of the business is related to border security and surveillance. But there is an industrial component as well, a product line of matrix routing switchers for the video market. For '08 we now believe that QuickSet will add $32 million to the growth in the Homeland Security product line in Space and Defense and $4 million in Industrial Sales.

Margin performance in Space and Defense will be impacted by the addition of QuickSet. QuickSet will generate operating income which will be largely offset by purchase accounting adjustments and interest expense. Also, the Constellation programs will be cost plus with the typical cost plus margins. So we 're now projecting '08 margin performance for Space and Defense of about 11% compared to the 13.1% of '07.

Industrial Systems Q4 '07

The fourth quarter of our fiscal year is generally not a strong quarter in our Industrial business. Over half of our revenues are generated in Europe and, as you know, a lot of Europe takes a month off. Nevertheless, in the fourth quarter of '07, sales were $111 million, almost the same level as the previous quarter and up 18% from a year ago. Of the $17 million in sales growth from last year 's fourth quarter, over $5 million was the currency effect, but other than that, real sales growth was still over 12%.

In the quarter, the most dramatic growth was in the motion simulator business, an increase of 36% or $3.5 million.

Gauge controls for steel mills were up over $3 million to a total of $10.1 million.

As you know, plastics is our largest market. Sales were up 11% to almost $17 million. Most of this growth is in Europe where our customers, particularly those in injection molding, are doing extremely well.

Sales were up $1.6 million in metal-forming equipment to a total of $9.5 million. In this category we have a wide range of applications including conventional sheet metal-forming equipment, powdered metal presses and forging equipment being delivered to China.

During the quarter, our turbine control business was up 11% to $12.6 million and our test equipment business up 7% to just over $10 million.