Question-and-Answer Session
Operator
(Operator Instructions). Our first question comes from Robert Rebitz with BlueLine Partners. Please go ahead.
Robert Rebitz - BlueLine Partners
Good job continued progress getting dangerously close to profitability even on a GAAP basis.
Bill Kullback
Yes we are.
Robert Rebitz - BlueLine Partners
Let me ask you about because that because it's kind of interesting, just king of eyeballing the numbers here. It appears as though if your service revenues have been even flat with last quarter you would have been profitable on a GAAP basis, so what was the reason for the decline there?
Bill Kullback
Well, our service revenues were actually flat from last quarter you mean from the same quarter in the prior year.
Robert Rebitz - BlueLine Partners
I guess that's right. Yeah that's what I am looking at.
Bill Kullback
Yeah we're at $1.1 million at the end of Q3 versus 816,000. Our service revenues are largely a function of the equipment revenues that we generate in our business. As we look at the third quarter of 2008, and as we look for example Bob at the four quarters, prior to the third quarter of fiscal 2008, we were at $7.3 million, $7.5 million, $8.9 million in total revenue. As we look at the proceeding three quarters for example of the third quarter in 2009, we were at $6.2 million, $6.4 million and $7.6 million. So our trailing equipment business is down significantly due to the economic environment.
Also we've seen our contract, our clinical research business down in the current year versus the prior year as well. That business does have a service component to it as well as our equipment sales.
Robert Rebitz - BlueLine Partners
Bill I was just looking at the gross margin and actually on a product basis, it's up 4%, 400 basis points year-over-year, so pretty significantly. I think I ask on every single call how high it can go, and I don't know if you've ever answered but you did kind of suggest on the call that you are continuing to look for ways to improve it. Of course, there are two components to that. One is, the average selling price on the products, and then the other is on the cost of manufacturing. Is it combination of both factors leading to the higher gross margin or is there one that's relatively more dominant than the other?
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