Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Joseph Vafi - Jefferies & Company.
Joseph Vafi - Jefferies & Company
I was wondering if we could talk a little bit about the VACIS business, if the kind of current economic environment might be affecting the pipeline there internationally. And then secondly on VACIS is you are still looking at about the same number of units shipped for fiscal 2009 as you had talked about last quarter.
Kenneth C. Dahlberg
I think to the contrary, I don’t see the economic conditions being that closely correlated to VACIS because this is all about fighting the war on terror and we are actually seeing a lot of interest internationally, especially with our higher power capability. So I feel going forward, especially with the recent winds that we got, our opportunities next fiscal year are going to be strong.
Joseph Vafi - Jefferies & Company
And the other question, just basically your planned shipments and sales for fiscal 2009, are they tracking to what you had previously stated they would be?
Kenneth C. Dahlberg
They are close. We may be off one or two units, but the profit in it will be strong.
Joseph Vafi - Jefferies & Company
On the margins, I know over the last couple of years you have kind of ramped up your bid and proposal engine a fair bit. Is it fair to think that there is operating leverage coming off of that run rate into next year, or do you think we are still going to invest more in that as revenue grows?
Lawrence B. Prior III
The trend we have seen is that it is increasing. We looked for the traditional wall between Thanksgiving and Christmas and haven’t experienced it, so we expect to continue to run hot as we go into Q1.
Operator
Your next question comes from Erik Olbeter - Pacific Crest Securities.
Erik Olbeter - Pacific Crest Securities
As you look into the SG&A, there was a significant reduction. Can you just go over that? Whether or not you expect additional level at 5.7% to repeat again?
Mark W. Sopp
As you recall, in the second quarter we had some non-recurring expenses in the SG&A, G&A in particular. The litigation place we had plus some severance dominated that, so we had higher SG&A last quarter, so if you are looking at the sequential decline that is certainly a big part of the reason. We also had a record revenue quarter in the third quarter which absorbed the fixed G&A more efficiently.
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