Barbara G. Bolens - VP, Treasurer - Director of IR Frank M. Jaehnert - President and CEO David Mathieson - Sr. VP and CFO Tom Felmer - President, Direct Marketing Americas Peter C. Sephton - President, Brady Europe Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager

Charles D. Brady - BMO Capital Allison Poliniak - Wachovia Rob Damron - 21st Century Equity Research Ajit Pai - Thomas Weisel Partners Christopher Weltzer - Robert W. Baird William Stein - Credit Suisse Yvonne M. Varano - Jefferies & Co. Inc.

Good day ladies and gentlemen, and welcome to the Fourth Quarter 2007 Brady Corporation's Earnings Conference Call. My name is Fab, and I will be coordinator for today. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions]. I would now like to turn the presentation over to Barbara Bolens, Director of Investor Relation. Please proceed ma'am. Barbara G. Bolens - Vice President, Treasurer - Director of Investor Relations: Good morning everybody and thank for joining us. Welcome to our fourth quarter fiscal 2007 earnings conference call. During the call this morning, you will hear from Frank Jaehnert, CEO; and then David Mathieson, CFO who will be presenting Brady's quarterly financials review. Also joining us this morning is Tom Felmer, President of Direct Marketing, Americas; Peter Sephton, President of Brady Europe; and Allan Klotsche, President of Brady Asia Pacific and Global Die Cut, who will all present a portion of the regional reports. As usual, after brief presentations by the team, we will open up the floor to questions. We encourage you to follow along with the slides located on the Internet as we will be referring to the individual slides as we proceed through the presentation. These slides can be found on our website, at www.investor.bradycorp.com. You have a few minutes to get to those while we go through our Safe Harbor statement. Please note that in this call, we may make comments about forward-looking information. Words such as expect, believe, and anticipate are a few examples of words identifying a forward-looking statement. It's important to note that forward-looking information is subject to various risk factors and uncertainties, which could significantly impact expected results. Risk factors were noted in our news release this morning and in Brady's 10-K filed with the SEC in October 2006. Second, please note that this teleconference is copyrighted by Brady Corporation, and there may be no re-broadcasting of this without expressed written consent of Brady. Note also that Brady will be re-broadcasting this call on the Internet and your participation in the Q&A session will constitute your consent to being recorded. Thank you and now here is Frank Jaehnert. Frank M. Jaehnert - President and Chief Executive Officer: Thanks Barb. Good morning. We are glad you could join us. Today we will be discussing our fiscal 2007 fourth quarter. I also want to take a couple of minutes to reflect on the entire fiscal year. In our fourth quarter, sales were up 26%, of which 5% was from organic growth. We continue to see great results from Europe and had solid growth in the Americas. Net income was up 17% over last year's fourth quarter. But excluding cost reduction charges, our quarterly net income was up 41%. EPS was up 12% over last year, 35% excluding our cost reduction charges. I am very pleased with these solid operating results in light of some of the challenges of this year. I am especially pleased with what we accomplished during the year. We achieved record levels of sales and net income. We continued moving at a fast pace to grow the business, respond to changes in business conditions, and prepare ourselves for continued top and bottom line growth in the future. We completed further geographic expansion in six countries, continued our focus on new product development, completed seven acquisitions and 16 SAP implementations. And also we implemented significant cost reduction activities to right size certain part of our business. We believe we are in a good position for fiscal 2008, with the ground work we have laid. And I will now turn the call over to David Mathieson, who will provide the financial review. I will be back to talk about our priorities for fiscal 2008 later in the call. David? David Mathieson - Senior Vice President and Chief Financial Officer: Thanks Frank. And I would like to start my discussion on slide 4 titled Q4 fiscal 2007 overview. Sales at $363 million were a record for the fourth quarter, up 26%, with 5% organic growth, 17% from acquisitions and 4% from currency. Gross margins at 47.9% were down 200 basis points from last year, SG&A at 33.9% was 20% basis points up from last year. Operating income was up 11% and if you exclude cost reduction charges, up 31%. And as I pointed out in the press release, this is a particular highlight as it demonstrates excluding charges, operating margins expansion for the first time in this fiscal year, the first time since the fourth quarter fiscal 2006. Net income at 26.2 million was up 17% and excluding charges, up 41%. Diluted earnings per share was up 12%, and excluding cost reduction charges, up 35%. Overall, as Frank said, we are pleased with the results of the quarter; at $0.48 diluted earnings per share we did miss earnings guidance for the quarter, which was $0.54 to $0.63. But that was mostly due to additional cost reduction charges, which were $0.10 in the quarter. We encouraged our business leaders to get as much cost reduction done as they could during the year and all the regions responded. We feel good by the position we are in to start the year. In slide 5, summary of cost reduction charges. We have recorded over $20 million in cost reduction charges, of which $11.5 million has been charged to the P&L pre-tax and $8.7 million charged to goodwill, as we anticipated the actions in our integration plans. As I said earlier, we are pleased with the amount of actions that we completed in the quarter and believe the company is well positioned. Our actions in the quarter were not limited to Die Cut, as we reduced costs in other business lines in Europe, Americas and Asia Pacific. The savings from these activities will be around $14 million, which is up from the $10 million we estimated last quarter. On slide 6, the company grew 26% in Q4, 5% organic, 17% from acquisitions and currency 4%. I think it's notable that we have not made an acquisition since we closed our Sorbent Products five months ago in April. This welcome pause has allowed us to have a laser beam focus on integration and cost reduction activity. On slide 7, despite tough fourth quarter comparisons, we saw a welcome return to organic growth in Americas of 5% after a soft third quarter. Sorbent Products contributed nicely during the quarter as did other acquisitions closed previously. Slide 8, on Europe, Europe continued a record year with strong organic growth of 8% aided by the spread of no smoking legislation, with the strength this quarter in England. The strong European economy helped and the weakness of the dollar also boost our results in Europe. We did see that the no smoking legislation in Wales did see very welcome and well capitalized the fund by our direct marketing businesses is largely a one-off business. On slide 9, in Asia Pacific we grew 25% in the quarter with essentially flat organic growth, 18% from acquisitions, 7% from currency. We re-characterize our mobile handset business as essentially stabilized. Overall organically, we're still experiencing tough comparison with the reduction of hard disk drive business, Maxtor takeover. As we look ahead, we have one more quarter of tough comparisons as we had a very strong first quarter in fiscal 2007. On slide 10, our gross margins were down in terms of basis points. The increased business in Die Cut and acquisitions in last 12 months have more than offset the improvements we have made in the rest of our business. On slide 11, SG&A was 20 basis points higher than the last year, but excluding cost reduction charges was down 150 basis points. We have a lot going on with integration activity, shared services, SAP roll out and the geographic expansions we have been funding. On slide 12, in R&D, in our fourth quarter last year, we had 32% of the annual R&D spend. So it was a big quarter for us last year. We are down 2% in dollars from that quarter, but up 18% year-over-year. We are continuing to... we continue to improve the full activities [ph] on our new product development and are pleased with the progress we see. We continue to see upside opportunity. Slide 13, operating income was up 11% over prior year, but excluding cost reductions, is up 31%. And as I mentioned earlier, we witnessed a resumption to operating margin expansion in the fourth quarter excluding charges. We believe our cost reduction activities have positioned us well for fiscal 2008. On the slide 14, net income was up 17% during the quarter, excluding charges, up 41% from last year. On slide 15, diluted earnings per share is up 12% in the quarter and excluding cost reduction charges, up 35%. For fiscal 2008, we will no longer have the dilutive effect of the equity offering we completed in June 2006. On slide 16, here is the cash from operating activities and we have... had a solid year with cash from operating activities up 18% year-over-year, excluding charges in terms of cash, is up 25%. Slide 17, here is our cash flow for the year. Cash from operations is at 124% over the net income. We believe we have peaked in terms of our CapEx at $52 million, I would also note that the acquisitions spend this year is less than half of last year's $351 million, resulting in a strong cash position of over $143 million plus short-term investments not shown here of $19 million. On slide 18, our EBITDA for the quarter up 18%, up 34% excluding charges. On slide 19, our year-end balance sheet shows net debt to total capital of 27.5%. So we continue to be conservatively leveraged. The short-term... the short-term debt of $21 million shown is the first installment of the seven-year amortization of the $150 million we raised in 2004. Slide 20, here is the summary balance sheet over the last eight quarters. What is notable for me is that our controllable working capital, that is receivables plus inventory less payables, were just in the last quarter from the third quarter. We have a strong focus in fiscal 2008 on working capital, and I look forward to seeing continued improvements in this element of our business. In slide 21, in our guidance for 2008, we assume revenue growth of between 5% and 7%, which assumes organic growth of between 2% to 4%. This range assumes our organic growth will be negatively impacted by 1.5% due to non-repeating no smoking legislation in Europe and shedding lower margin business in Die Cut. Acquisitions we have already made will add 3% to the top line next year. Our net income gains anticipated an increase in tax rate from 28% to 29%, mainly due to geographic mix of profit. We also expect more variability in tax rate per quarter with the introduction of FIN 48. We expect for fiscal 2008 that the most significant improvements to our profitability will come from gross margin improvements as we have focused our cost reduction efforts on reduction of production sales. As we have done in the past, neither sales nor net income guidance assumes any future acquisitions. We expect CapEx of $45 million, down from the $52 million last year and we have budgeted D&A of $65 million. Now we don't give guidance by quarter, and we won't... however I would like to point out that the first quarter of fiscal 2007 was very strong, and we don't expect to match that quarter. Net improvements over prior year are expected in the last three quarters. We are watching the U. S. economy with interest and this guidance does not assume a slowdown in the global economy in fiscal 2008. Slide 22, here is the last five year sales growth. You could see we had a record year in growth in fiscal 2007 with growth of 34%, 26% coming from acquisitions. I would also note that the average organic growth for the last five years is just short of 5% or 4.6%. The dollar has also been inflating in full rate of the last five years, so we have benefited from that weakening. On slide 23, with growth of 26% last year from acquisitions, we have put a lot of pressure on our profitability. We continue to drive down our SG&A and if cost reduction charges are excluded in fiscal 2007, the SG&A is 32.2%, which is down 740 basis points from fiscal 2003. On slide 24, in the last four years, we have grown net income every year and it's up 411% since fiscal 2003. We took a dip in our earnings per share in fiscal 2007 as a result of our equity offering at the end of fiscal 2006. Our priorities for 2008 are very similar to priorities for fiscal 2007. We have added an emphasis on working capital and we have set right our goals to improve our profitability and of course our earnings. We are pleased with the significant progress that we made in the last quarter in positioning the company for the future and we look forward to fiscal 2008. Now I will turn the call over to Tom Felmer, who will provide the Americas overview. Tom Felmer - President, Direct Marketing Americas: Thanks David. The Americas performed well in the fourth quarter with continued strong revenue growth coming from our base business and recent acquisitions. The increased volume resulted in strong profit growth over the prior year fourth quarter. The region sales growth or sales increased $169 million, an increase of 25%. Organically, we grew 5%, acquisitions added 19% and foreign currency translation added about 1% to sales. Organic growth within both our Brady and Direct Marketing Brands was strong in the fourth quarter compared to fourth quarter of the prior year. Sales in our Brady wire ID products and high performance labeling were solid. Regionally, Canada showed very positive results after a slow first half of the year. The Brady base is Brady U. S. business grew steadily in the quarter, but was negatively impacted by difficult comparisons with one-time items last year. Growth in our Brady and Direct Marketing business in Brazil was also strong. Our Brady ID business in Brazil was strongly led by nice label sales and the acquisition of Asterisco, while the sales of die-cut parts in the mobile phone market offset this growth. During the quarter, we closed our Mexico City warehouse and sales office and moved to a new facility in Craigville, Mexico, where we have added label manufacturing, which will strengthen our position in the Mexican market with local sales and service. The integration of Sorbent Products Company, which was acquired in April 2007, continues to progress well. This expands our MRO offerings and has been well received by our field sales team, our distribution and our customers. While it's still early to, it's meeting sales and profit expectations. Our Varitronics business had positive sales and profit improvement over Q4 last year as the VariQuest products for the education markets began shipping. We are very hopeful for this business as we enter a new school year. Segment profits rose 29% or $8.8 million to $39.1 million in the quarter. Segment profit as a percentage of sales was 23.2% compared to 22.4% in the prior year. While we continue to experience cost increases in utilities and material, the impact of our increase in volume is offsetting our cost increases. As expected, our recent acquisition have an initial rate of profit that is below the average for the group, and we expect as we integrate and achieve synergies, we will enjoy increasing levels of profit going forward. Peter Sephton will now report on the European business results. Peter C. Sephton - President, Brady Europe: Thanks Tom. I'm now on slide 26. Europe performed well in the fourth quarter with continued strong revenue growth coming from our base businesses and recent acquisitions. The increased volumes resulted in very strong profit growth over the prior year fourth quarter. Europe sales increased to $114 million, an increase of 28%. We continue to see strong contributions to our base business with organic growth this quarter at 8%. Acquisitions added a further 12% on the strengthening of the European currencies versus the U. S. dollar. So it's a positive currency impact in the quarter of 8%. Organic growth in our direct marketing brands was very strong for the fourth quarter, up solidly over the prior year. This was driven primarily within the U. K. by double-digit growth in both our Seton and Safetyshop brands, largely resulting from the impact of new no smoking legislation enacted on July the 1st. Our direct marketing brands in France; Seaton and Signal also continued their solid year with double-digit growth in the fourth quarter, while Seaton in Germany reported a marked improvement over the fourth quarter of last year. Our organic growth in the Brady brand is continued as expected with the solid growth in the business in Belgium, France and Germany, offset to an extent by continued migration of Die Cut business in Sweden and Slovakia to the Far East. Our businesses serving the MRO market continues to perform well, following the strategy of focus within key selected markets across the whole of Europe and leveraging also of our recent acquisition such as Temtec and Scafftag. Our European acquisitions in fiscal '07 included both the Scafftag, Modernotecnica, and Sorbent Products, and they've all performed at or above expectations and have good prospects ahead of them. Our segment profit grew 49% or $10.7 million to $32.6 million in the quarter. We are particularly pleased that the profitability as a percent of sales increased to 28.6%, again it's 24.6% in the fourth quarter of last year, reflecting our continuous strategy to improve the quality of earnings, but focusing our organic and acquired business in our sweet spots and exiting low margin business. We also have seen some pressure on utility and material prices, but the impact of our increases in volume, particularly in our direct marketing business is offsetting our cost increases. In addition, we also continue to correct costs across the region and although we had a great year, we took the opportunity to improve our competitiveness across the whole of the region by reducing non-value adding costs and processes. Europe has enjoyed a record fourth quarter, continuing to improve on eighth consecutive quarters of organic growth. Going forward, we will continue to integrate and leverage our acquisitions, while working to maintain the momentum in the organic businesses build out this year. And I now hand over to the Asian region report, over to you Al. Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Thanks Peter. I'm now on slide number 27. Sales for the fourth quarter in Asia were $79.7 million, up 25% over the last year. Organically, sales were flat while acquisitions added 18% and currency added another 7%. The same quarter last year was a very strong quarter for us, with 87% growth over the prior year, coming from a combination of solid organic growth and acquisitions. Therefore, our comparison was very tough. This quarter's results were largely inline with our expectations. During the fourth quarter, our team remained focused on three primary areas, adjusting our footprint and capacity for our Mobile Handset business, securing our specification position at the key OEMs and understanding their supply chain strategies and growing our core label and sign business. By the end of the quarter, we've finalized the capacity and footprint changes we felt were needed given current customer demands and future forecast. This will result in a reduced cost base for the coming year, but it will not impact our ability to respond to increases in customer demands. The reductions were made focused on reducing facility and overhead expenses and not with machinery and direct labor. Operationally, we have seen some improvements from sharing best practices across the existing Brady businesses and some of our recent acquisitions. Some of the improvements we are seeing are coming from the increased visibility that SAP provides us, now that the majority of the region is up and running on the same system. Our global sales and engineering teams have pretty much completed their final push to ensure our spec position remain strong, as our OEM customers move from prototyping to mass production in the coming months. Our success will now rest with the teams' ability to win a proportion of the amount of allocation as the programs ramp up within the respective supply chains. And the third area, focused around growing our core business, we have some mixed results. A few of our smaller initiatives around safety and facility identification showed strong growth and nice promise for the upcoming fiscal year. Combination of education, awareness and multiple approaches to end customers appears to be working quite well. On the other hand, our labeling business remained somewhat sluggish compared with years past. Our strategy here is to keep differentiating Brady through the introduction of new materials and identification solutions. While our geographic expansion has slowed down compared to prior quarters, we are pleased with our readiness in Dong Wang, China and India. Also these facilities have passed major customer and regulatory audits, and are ramping up their production output. At the end of our first quarter in fiscal 2008, we will begin production in the small manufacturing location in Japan. Our intent here is to provide stronger support to Japanese OEMs with their design specifications and prototyping and then capture the high volume production as it moves to China and other parts of Southeast Asia. Our focus on Japanese MNCs has been quite successful over the last three years, and we anticipate this to continue. Elsewhere in the region, the combination of our business is in Thailand and business rationalization in Southeast Asia. It helped us reduce operating expenses and spread them over a larger base of sales. Our performance in Australia continues to remain very solid, both with our core business as well as the acquisitions that we have made. Going forward, we will continue to look for ways to expand our portfolio in a way that could utilize our current approach to the market. During the fourth quarter, we faced many of the same pricing pressures as we have throughout the year, as our customers continue to battle for market share in the absence of any new revolutionary product introductions. We are hopeful that the newer feature rich phones coming out will stabilize industry average selling prices and support some of the higher end design capabilities and tolerances that tend to differentiate Brady. Segment profit for the region was $10.8 million, down 11% from last year's segment profit of $12.2 million. Looking forward in the fiscal 2008, we will be working hard to ensure that our major consolidation work will be completed and we can be focused on delivering operational excellence and flexibility to our customers as their volumes increase. I will now turn the call back to Frank. Frank M. Jaehnert - President and Chief Executive Officer: Thanks Al. As we progress further into fiscal 2008, we believe we have taken the steps necessary to reduce our cost structure, invested infrastructure with aggressive SAP roll out and geographic expansions, continue to strengthen our R&D processes to support a higher rate of differentiated product introductions, intellectively acquired some outstanding companies. Our priorities during this year will be to focus on profitability and working capital improvements, and we continue drive to increase organic growth. We have great opportunities in each of these areas to increase shareholder value. We will continue to integrate recently acquired companies and selectively acquire new companies that help us achieve our goals of increasing the shareholder value. We are watching the economy closely. We hopes that the concerns in the housing policy and credit market don't affect our business, but as they do, we will make adjustments as necessary. We appreciate your support of this year and look forward to a great 2008. This is the end of our prepared comments, and we will now start the Q&A. Fab, could you please give instructions? Question And Answer

Thank you. [Operator Instructions]. And your first question comes from the line of Charlie Brady from BMO Capital Markets. Please proceed. Charles D. Brady - BMO Capital: Thanks. Good morning. With regards to the U. K. non-smoking legislation and the expected fall off in revs in that business, can you give us a sense of timing going into fiscal 2008 as to when you expect that business to start dropping off or are you all the way through that already? Peter C. Sephton - President, Brady Europe: Yes, Charlie, it's Peter Sephton, I can comment on that. It drops off very, very quickly. The law enacted for enforcement by the end of July. So coming to the end of July, really everyone should have been in... have in compliance with legislation and we've seen a sharp downturn in that part of our business. Charles D. Brady - BMO Capital: Okay. Thanks. And then just with regard to acquisitions and sort of a pipeline, obviously the fourth quarter, where there any really going on. Can you just speak sort of what the tenure of business is out there and maybe areas you might be focusing on? David Mathieson - Senior Vice President and Chief Financial Officer: Our pipeline hasn't been as strong as it has been in the past, but we still see some nice opportunities in the $10 million to $25 million sales opportunities. So we're still pursuing acquisitions, Charlie. But I would say the pipeline has not been as strong as it has been in the past. We're hoping actually that the credit crunch will reduce price expectations, but we'll see. Charles D. Brady - BMO Capital: That sort of goes into my next question as far as in terms of prices or multiples being thought, have you seen any lowering, those sort of order rates yet? David Mathieson - Senior Vice President and Chief Financial Officer: No, we haven't seen that yet. So, our bankers are telling is that it will happen though, so I hope they're right. Charles D. Brady - BMO Capital: Okay, thanks. I'll get back in queue.

Your next question comes from the line of Allison Poliniak from Wachovia. Allison Poliniak - Wachovia: Hi, good morning. Frank M. Jaehnert - President and Chief Executive Officer: Good morning. Allison Poliniak - Wachovia: Just a question in terms of legislation; going back to that, is there anything upcoming either in U. S., U.K. similar to the U. K. non-smoking law that you guys could benefit from? David Mathieson - Senior Vice President and Chief Financial Officer: Nothing that. No, nothing is significant as the no smoking that we'll have in Europe this year. Allison Poliniak - Wachovia: Okay. And then second, you talked about it at your analysts meeting in June, about your 12% net margin goal by 2010. Just given now that you have your fiscal '08 outlook out there, are you guys still comfortable with reaching that goal? David Mathieson - Senior Vice President and Chief Financial Officer: Yes, we are not changing our goal and this guidance provides some steps towards that. Allison Poliniak - Wachovia: Great. Thank you.

And your next question comes from the line of Rob Damron from 21st Century Equities. Please proceed. Rob Damron - 21st Century Equity Research: Good morning. I wanted to talk about the one-time costs that we've seen over the last couple of quarters. Is that pretty much behind us or should we expect any additional cost... one-time cost as we move into the first fiscal quarter? David Mathieson - Senior Vice President and Chief Financial Officer: Pretty much behind it, we continue to do cost reductions, but there will be nothing, nothing that we foresee of that size, Rob. Rob Damron - 21st Century Equity Research: Okay. That's helpful. Also I wanted to talk about the new product development, what percent of your core growth in fiscal '07 was from new products and maybe you could talk a little bit about the pipeline as we move into '08? David Mathieson - Senior Vice President and Chief Financial Officer: It's not a significant amount, most of the products, new product development has been on in replacing products. So it maintains market leadership, hopefully it helps maintain our margins. It was mainly a best year has been about maintaining our leadership in the market that we serve. Rob Damron - 21st Century Equity Research: Okay. And any discussion on the... on new products that could be in the pipeline that may help drive growth in '08? Frank M. Jaehnert - President and Chief Executive Officer: Rob, it's Frank. We usually don't talk about this a lot for two reasons. First of all, we have a lot of new products always during the year, none of them is material, would maturity impact our sales or exportations. That's number one, number two, we don't like to talk about something what we haven't seen succeed in the market here. So we don't want to raise the expectations and afterwards do not make the numbers. So, we are usually quiet about it, but we had a very active year. We launched a lot of new products this year and if I compare it to the prior year, it was significantly more than what we did in the past. We talked early about the VariQuest system at Varitronics. That's an interesting launch, then we have launched refresh public print line. We are just rolling out a very much simplified bench top printer, where you are raising significantly simplifies what the customer has to do and uses a printer. So, there is always something going on, it several software or hardware, should be a much more active year than it was the prior years and we expect to end this up even further. Frank M. Jaehnert - President and Chief Executive Officer: Okay that's helpful. Thank you,

Your next question comes from the line of Ajit Pai from Thomson [ph] Weisel Partners. Ajit Pai - Thomas Weisel Partners: Yes good morning. It's Thomas Weisel. Frank M. Jaehnert - President and Chief Executive Officer: Alright. Hi. Ajit Pai - Thomas Weisel Partners: Hi. Just a couple of quick questions, the first is could you give us the break up between MRO and Die Cut in this particular quarter? Frank M. Jaehnert - President and Chief Executive Officer: MRO and OEM. Ajit Pai - Thomas Weisel Partners: Yes, and OEM. Frank M. Jaehnert - President and Chief Executive Officer: Do we have the number? David Mathieson - Senior Vice President and Chief Financial Officer: I think it's close to 60-40. Ajit Pai - Thomas Weisel Partners: Its 60-40. And then just looking at your Die Cut business, I think you said that you're getting out of some, not so profitable businesses over there. Could you give us some color as to what those businesses are? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Its not as much full business segment Ajit is, it is micro segmentation of all our customers and the parts that we sell to those individual customers and really looking and just scrubbing these and seeing which parts that we are able to make money on and which parts that were not as profitable on and making the micro segmentation adjustments that way. So it's not that we are getting out of an entire industry per se. Ajit Pai - Thomas Weisel Partners: And if you are looking very broadly at sort of the two largest customer categories you have over there, the handset manufacturers at the end as an end market and then the hard drive folks, most of those areas that you are getting out of, are they more on the hard drive side or more on the handset side? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: And again it's really not areas as much as it is individual products, and this is a business that we have a very good visibility and line of sight for the customers and to the product. So, we were scrubbing every corner of the business and I would say that there is no disproportionate amount in one or the other. Ajit Pai - Thomas Weisel Partners: Okay. Peter C. Sephton - President, Brady Europe: And Ajit for your information our hard disk drive business really not anything significant and you want... as compared to a mobile handsets. Ajit Pai - Thomas Weisel Partners: Right. Peter C. Sephton - President, Brady Europe: If you look at indications what's going on in the market and try to conclude I think hard disk drive is probably not worth representative for what's going on in OEM for us. Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Yes it's not going to move. Ajit Pai - Thomas Weisel Partners: Got it. So it's not as relevant anymore? Peter C. Sephton - President, Brady Europe: Yes, that's right. Ajit Pai - Thomas Weisel Partners: Right, so there is not downside from hard drives anymore, in case things slow down there. Right now it's pretty robust I think business that industry is seeing and it's not showing up in your numbers because it's not very material? David Mathieson - Senior Vice President and Chief Financial Officer: I think that's correct it's not material. Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: It's not material. Ajit Pai - Thomas Weisel Partners: Okay. And then when you are looking at the... you talked about next generation handsets and premium products, the two fast growing set of next generation handsets out there from the Apple's iPhone, I know it's a very small base as well as the Blackberry, but they are growing quite rapidly. Do you folks have any kind of penetration into either of those two manufacturers? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Yes absolutely, with both of them. Ajit Pai - Thomas Weisel Partners: Okay you do. Okay. And then just looking at your acquisition pipeline, you know you've talked a little bit right now about how strong your growth through acquisitions was in 2007 and I think you've talked about focusing much more in 2008 on improving profitability and sort of getting the synergies out of acquisitions. But in this environment, with things being as volatile as they are, is your pipeline of acquisitions looking richer and are the evaluations coming in or are they staying... you don't see any material changes yet on that side? Frank M. Jaehnert - President and Chief Executive Officer: Well, I let David to answer this question before, so let me answer this time, a little bit different then. We continue to consider making acquisition of the core competent. We think our track record has been above average, above the industry average. So we continue to push for acquisitions. We have intentionally slowed down, especially the OEM space, because we have made so many acquisitions in such a short time. So we want to provide some digestive period for the management and we have also shifted the focus more to MRO. Now just as we didn't make any acquisition for the last five months that may indicate that we have lost interest in acquisition. We continuing to push hard on acquisition, but as you know it's a volatile or a lumpy business, you might make two or three and then you do nothing any more for couple of months. And, so we are working on our pipeline, it's a little bit lower than it used to be. But, our guidance, our goals for the next couple of years is as we said 5% organic growth and 5% acquisition growth, still holds and we have as you know we have done better in both the categories over the last couple of years. So we'll continue to push. Ajit Pai - Thomas Weisel Partners: Right. So when you looking at your broad exposure by geography, you have but 46.6% Americas, 31.4% Europe and then Asia about 22%. In the Asian business, I think is the lowest in terms of absolute dollars, it's been in about four quarter. Is there a focus on increasing one of those geographies greater than the others through acquisitions or through any other mean? Peter C. Sephton - President, Brady Europe: No, I don't think we have got a buyer, we slowed in OEM, which is lastly a business in Asia Pacific is largely OEM. So I believe there is in plenty of that, but we are not going to not do OEM acquisitions. We will continue to do acquisitions. Recently, it has mainly been MRO. But as Frank said we deliberately slowed down the OEM side, but it doesn't mean that we won't do OEM acquisitions in the future. Frank M. Jaehnert - President and Chief Executive Officer: Yes, radically this MRO being about twice as big as OEM, statistically you should have about twice as many acquisitions, either of same size and, we feel comfortable with this even so we right now have done a little bit less in OEM lately. Ajit Pai - Thomas Weisel Partners: Okay. Thank you.

And your next question comes from the line of Robert McCarthy from Robert W. Baird. Christopher Weltzer - Robert W. Baird: Good morning. It's actually Chris Weltzer in for Rob. Question on your guidance, I know you quantified and I think 1.5% drag from an organic growth from your European finance issues, I was wondering if you could may be put a number to, shutting the lower margin businesses in the Die Cut area? Frank M. Jaehnert - President and Chief Executive Officer: Well the 1.5% was to cover both items and is roughly 50-50. Christopher Weltzer - Robert W. Baird: Oh, I am sorry, I got you. David Mathieson - Senior Vice President and Chief Financial Officer: You know what's driving this well is Chris, excuse me, Chris what's driving this is we have this goal out there which we shared with a loss rate 12% and the net income of the limited phase by 2010 which we still feel a chronicle to and we would like to get there. So we need to increase earnings quality and that's a goal which goes through the whole organization and, Al Klotsche for Asia Pacific has made this one of his key goals for 2008. So and that this you kind of accomplish this by doing a couple of things, you can either you will be more selective in acquiring more profitable businesses or business where you can see... we are seeing you can make it more profitable, you can do it by being more selective in accepting orders from customers you can shift around the product mix and so forth. We are doing all this, we really want to focus on earnings quality, because we still feel accountable to the 12% after-tax goal. Christopher Weltzer - Robert W. Baird: So, you're saying that -- Frank M. Jaehnert - President and Chief Executive Officer: Across the board. Christopher Weltzer - Robert W. Baird: So you're saying that in Asia Pacific now you may see volumes down next year, but the volumes that you're getting is going to be at a higher margin, and so you're happier with that. Frank M. Jaehnert - President and Chief Executive Officer: I'm not sure if you said this that specifically. Christopher Weltzer - Robert W. Baird: Alright, okay. And then we've talked a lot about pricing pressures in Asia obviously. I was wondering if you could talk little bit of the pricing environment, maybe Europe and the Americas. Frank M. Jaehnert - President and Chief Executive Officer: Peter, you want to start, pricing pressure in Europe? Peter C. Sephton - President, Brady Europe: We have got a very strong bank franchise, and when you look at our direct marketing brand, price we said that the premium price in 08 against the general market price as we sell convenient, but we have a very strong bank franchise, which is why we are able to capitalize so handsomely on changes in legislations. So we don't see price pressure coming to back end of the business. We mitigated some of the margin pressure on utility and material prices by looking at more Asian sourcing. So we are in pretty good shape. And our Brady business as well by focusing on very differentiated solutions to these focused market, and I've mentioned the process industry before, were... I mean that's just having a great time. If you look at exploration, chemical processing, petro chem, it's a great time and we are satisfying compliance product. So not to say the price, it's not going to be an issue, but it's not such an issue for us. Tom Felmer - President, Direct Marketing Americas: This is Tom Felmer, just to comment on the Americas and I'll echo what Peter's comments were, because we've enjoyed such a diverse mix of customers and have relatively small order size, we are not subject to the same kind of price pressure that Al might see in his businesses with large OEM customer. So we don't see any material changes occurring to price pressure. Christopher Weltzer - Robert W. Baird: Okay. Thank you very much.

Your next question comes from the line of Will Stein from Credit Suisse. William Stein - Credit Suisse: Thank you. First, I'd like to make sure I understand the guidance both for the quarter that just closed and the go forward guidance. Are you guys including or excluding these one-time charges in those guidance numbers? In other words, for this current quarter, did the guidance contemplate this $7.5 million pre-tax charge or did not contemplate that? David Mathieson - Senior Vice President and Chief Financial Officer: We didn't contemplate as much as that Will. We did no contemplate $0.10. So our guidance I think, we missed the lower end of our guidance by a penny. The rest is down to the fact that we did a lot more cost reduction than we anticipated. William Stein - Credit Suisse: Okay. So in other words the guidance you provided, did that assume some level of restructuring charges? David Mathieson - Senior Vice President and Chief Financial Officer: Yes, but not as much we actually intended to do. William Stein - Credit Suisse: Okay. Second on the gross guidance that you are providing, I think I heard was a 2% to 4% organic. Is that right? David Mathieson - Senior Vice President and Chief Financial Officer: Yes. William Stein - Credit Suisse: In the past, organic growth has been somewhat higher than that. I am wondering if you're contemplating a global slowdown. I think you said no, but I am wondering if you can give any color on that. Frank M. Jaehnert - President and Chief Executive Officer: Let me start, you certainly watched the economy, there's no question. And I think the situation is maybe not as rosy as it used to be. Now has it impacted thinking of 2.4%, I think it has to a certain extent, can I quantify it? I don't think so. I'd say it has probably impacted our guidance, but I think it's more the earnings quality goal, which is driving this number, that's how far I want to go at this point of time. William Stein - Credit Suisse: Okay. David Mathieson - Senior Vice President and Chief Financial Officer: Well, we pointed out 2% to 4% organic, because we have got 1.5% headwind created by no smoking legislation just one repeat. William Stein - Credit Suisse: Understood. David Mathieson - Senior Vice President and Chief Financial Officer: And we are shedding lower margin businesses, so excluding that we are looking at 3.5 to 5.5. And if you look at the last five years, we have done 24.6. So I wouldn't say it's been tremendously impacted by the economy. Frank M. Jaehnert - President and Chief Executive Officer: Yes. William Stein - Credit Suisse: Okay. So just turning to that for a second or focusing on that, that sounds to me like you are essentially cherry picking in particular, it sounds like on the OEM side of the business, which is not a bad thing in itself. But I am wondering if you are worried about that damaging customer relationships, maybe you can talk about that for a minute? Frank M. Jaehnert - President and Chief Executive Officer: Yes, let me just solve this was generic answer. I think cherry picking is going too far. Cherry picking means you are just very, very selectively take a small portion of the business, you take the majority of the business, but we might have some parts of the business which have not returned the kind of investment we wanted, and we are motivated by either increasing prices to the customers or by walking away from it. But I would say cherry picking goes far beyond what our intentions are here. I think you want to add Al? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: No, I think that's... you can't cherry pick with OEMs. I mean that we'd take a look at an entire program in the first 35 parts within the phone or mobile device. We have to look at that in totality. But as we are trying, Frank talked about increased investment in R&D and trying to do more with innovative products. That's what we are trying to figure out as where are the customers problems going forward and as we look at different clusters of types of product that we provide, where should we be spending more of our time and energy, both as a sales force and an R&D team in developing those solutions. William Stein - Credit Suisse: Okay, that's helpful. And just one more following up on that. Can you talk about your relationships with the OEMs and the ODMs/EMS companies with regard to both penetration on the design side and then follow up with purchase orders. In other words, out of the top, let's say, five or so global handset manufacturers or top five OEMs, can you talk about among them as a group, where you stand with new designs relative to purchase order traction? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Well, I can talk as a group; I won't talk about each one individual, because I wouldn't be comfortable with that. Our sales teams have worked very, very hard in the spring, in the summer to ensure our specification position and they are working hard in North America, Europe and parts of Asia in the design centers. And we are pleased with... I've talked about this in the past, we are pleased with the spec position that we have, as myself and other executive management team have sat down with our customers. They continue to appreciate the value proposition that Brady brings with unique designs and manufacturing capabilities. Now we have the inflection point that we slide over to the supply chain. We also feel good historically about our relationships with the supply chain partners that the OEMs have. It's still very, very early in the process. As I talked about, this is the time that the designs are starting to ramp up, and we have seen our sales ramp up as we anticipate it. David talked about making quarter-on-quarter comparisons. Last year, our first quarter in fiscal '07 was an unbelievable year for us. So that's a very, very difficult one for us to match that, but we see sales trending in a positive direction, and we anticipate that our sales teams are going to do a good job continuing to win this business this fall. William Stein - Credit Suisse: So print position now relative to let's say year ago better, worse, or similar with... among the top five as a group? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: In aggregate, I'd probably say slightly better. But that answer varies by individual OEM as well. William Stein - Credit Suisse: Sure. And purchase order traction, I suppose that's yet to come, is that something that you should start getting visibility into within, let's say a month or is it 2 or 3 months, when should you be aware of what your position is with regard to the traction? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: By the next call, we will be able to give people a pretty good feeling what the traction is like this fall. It's just too early right now to say that. William Stein - Credit Suisse: Okay, thanks.

Your next question comes from the line of Yvonne Varano from Jeffries. Yvonne M. Varano - Jefferies & Co. Inc.: Thanks. On the cost savings that you're looking for that $14 million in '08, is that expected to come on day 1 or is it going to be a season throughout the year? Frank M. Jaehnert - President and Chief Executive Officer: Yes. It will begin... we've done the bulk of that has been completed through the end of July, so yes, we should begin to see that, Yvonne. Yvonne M. Varano - Jefferies & Co. Inc.: Okay. And then on the hard disk drive side, can you update us on the progress that you're making in trying to replace some of that lost Maxtor business? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Sure, I think that we have taken a look at the different applications that we provide... that we historically have provided to the hard disk drive market. We found a couple of those applications to be less attractive in terms of the customer needs and our ability to supply those needs in a differentiated form. In other words, those products that are more commodity products, we have decreased our emphasis and we focus more on innovation, where we can bring some of our new product development, both chemically and mechanically into the picture. So hard disk drive is a much smaller piece of the business than it historically has been for Brady, but some of those little niche, new R&D applications were faring pretty well in the marketplace. Yvonne M. Varano - Jefferies & Co. Inc.: Okay. So we should probably assume that this will continue to be a much smaller part going forward even with some of these niche businesses. Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: That would be a good assumption. Yvonne M. Varano - Jefferies & Co. Inc.: Okay. And then also in Asia, you talked about the labeling side, which continues to be sluggish there, but what really needs to happen to turn that around? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: Well, a couple of things. The... we've talked about some of the distraction last year with the acquisition and the integration of our sales teams and when you take a look at it, we were probably realigning over 100 sales people last year and slightly adjusting duties and focus geographic or customer. And so we really have to make sure that we are... our focus is now a 100% on the customer, and I'd say that we are pretty much in that direction right now, all the clarity has provided to the sales teams. The second thing is that is as some of the environmental regulations have kicked in, it's actually made some of the manufacturing processes where our labels get used, less harsh and easier for lower performance labels to be acceptable in that solution. So we really need to make sure that our marketing teams are working very closely with the advanced technology group to understand what manufacturing methods are going to look like may be 18 to 24 months from now to make sure that our... the products that we have in new product development are going to be appropriately differentiated in the future. So I would say that this year it's focus and next year it's going to be driven by innovation. Yvonne M. Varano - Jefferies & Co. Inc.: Great. Thanks very much.

[Operator Instructions]. And your next question is a follow-up from the line of Charlie Brady from BMO Capital markets. Charles D. Brady - BMO Capital: Hey thanks. I don't want to beat a dead horse on this on the U. K. smoking thing, but can you help me understand why you've got additional similar bans coming up in Germany, I guess in '08... starting in '08 and then you have got a good part of the French market, the bulk of it, bars, restaurants, stuff like that coming later in the year. Why those two markets combined wouldn't make up for and then maybe add to the loss you get in the U. K. being completed. Peter C. Sephton - President, Brady Europe: Charlie, I can answer that, Peter Sephton again. The French legislation was enacted in two tranches, so we took essential slides of business last year in general public places. But you are right, the bars and restaurants were excluded, so that's true, but the truth is a lot of bars and restaurants did get carried up in that part of the legislation. So I think the uptake is going to be... you may get some, but we can't really promise it. Because a lot of bars and restaurants, and we know who we mail. We mail a hundreds and thousands of customers and we know who buys and we anticipate that a lot of that has been invested. Interesting about Germany, and believe me it's the same discussion that we have as a leadership team across Germany, because the way Germany is structured, the choice for enactment is done on a very, very regional basis and essentially the legislation is being in place in Germany for quite some time. But the enactment in compliance has been incredibly slow and mixed. So it's a very different market dynamic. But we would have hoped already to assume similar results from Germany and we haven't quite frankly. Charles D. Brady - BMO Capital: Is it fair to say then that the potential business out of Germany is not factored into your expectations for fiscal '08? Frank M. Jaehnert - President and Chief Executive Officer: It's included in our guidance and you know what, its included but its not material. Charles D. Brady - BMO Capital: Okay. And then switching gears for a minute on the mobile handset market, is it possible to get a sense of how much of your business into the mobile handset market is coming out of the low end market versus maybe the higher mid tier and kind of where that looks like compared to year ago? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: It is, I would say that the low end market in general in terms of number of units shift has been increasing faster for us and the powered opportunities within lower influences is not as great. But we continue to be well positioned geographically when you look at our presence in India and other areas around Asia where the low cost phones are being manufactured even though there aren't many parts there, our geographic presence does differentiate as and give us some ability in that market. Charles D. Brady - BMO Capital: Okay. As we look at that part of the business then, if that part, if the low end continues to grow faster, would it be fair to expect some margin degradation as that mix shift changes a little bit? Allan J. Klotsche - President - Brady Asia-Pacific, Global Die Cut and Strategic Account Manager: I don't think it so... no, I couldn't comment on that that to be honest with you. I think we are very, very focus as Frank said on achieving our long-term ratio of getting to the 12% and we are going to make sure that our sales efforts are aligned with that. Charles D. Brady - BMO Capital: Thanks very much.

Your next question is a follow-up from the line of Ajit Pai. Please proceed. Ajit Pai - Thomas Weisel Partners: Yes, just about your tax rate. I think you've guided to 29% for this coming year, but your tax rate has been over a period of time in trending lower rather than higher. So why the volatility, and what factors should be considered when we model your tax rate for '09? David Mathieson - Senior Vice President and Chief Financial Officer: Well, I wouldn't say it's been very volatile because it has been there in 28% for sometime. But we've been acquiring businesses in the U. S which has the second highest tax rate in the world and tax rates in China are going up. So 29% in this with what's happening is no bad Ajit. Ajit Pai - Thomas Weisel Partners: Yes, it's not bad but it's been trending downwards, so the main two drivers we should look at as your business mix in the U. S. and then in China regardless of what percent it is, the absolute tax rate that you have there is beginning to rise. Is that fair? David Mathieson - Senior Vice President and Chief Financial Officer: That's fair. Ajit Pai - Thomas Weisel Partners: So right now we think that like on a go forward basis, you'd expect the overall tax rate to either stabilize at current levels or start trending upwards after having a sort of downward trajectory for about 7 to 8 years. David Mathieson - Senior Vice President and Chief Financial Officer: 29% was reasonable going forward, Ajit. Ajit Pai - Thomas Weisel Partners: Okay. Frank M. Jaehnert - President and Chief Executive Officer: We'll be ahead Ajit over the last couple of years where you saw the downward trend. We had tremendous international expansion especially into China and of course there is no... the tax situation of China is mainly tax intensive for those couple of years. Now we think... we have given up almost a third of our business in Asia, while certainly Europe about... so do in the Americas roughly, right. Ajit Pai - Thomas Weisel Partners: It's about 22% I think in the most recent quarter in Asia, but it has been as high as 28%. Frank M. Jaehnert - President and Chief Executive Officer: So I know we have the number say. You have even better number that I do have at this point of time. Ajit Pai - Thomas Weisel Partners: Well it Frank M. Jaehnert - President and Chief Executive Officer: You said something like 31.4% Q4 which impressed me a lot. So but we think this shift of Brady moving into lower cost tax regions over the last couple of years, that's probably done. So we are not going to get the benefit from this anymore and so going forward we are talking to or tax advisors which I think 29 is for the time being a good assumption. As David has also said over the new accounting regulation, we might have a little bit more volatility from quarter-to-quarter in how we have to report on our tax rates. David Mathieson - Senior Vice President and Chief Financial Officer: Yes. Ajit Pai - Thomas Weisel Partners: Okay Frank M. Jaehnert - President and Chief Executive Officer: I'm sure you have this Ajit. Ajit Pai - Thomas Weisel Partners: Yes. Okay. Thank you. Frank M. Jaehnert - President and Chief Executive Officer: Alright, so we have had a conference call now for one hour. If there is urgent questions we have not covered, I certainly don't want to cut people off at this point of time. Otherwise, you can always call us afterwards, but I just wanted to ask one more time, if there is urgent important question which we have not addressed yet, doesn't seem to be the case.

There are no further questions at this time. Barbara G. Bolens - Vice President, Treasurer - Director of Investor Relations: Thank you very much. We appreciate your participation today and remind you that the audio and slides from this call are also available on our website. A replay of the taped call will be available via the phone beginning today at 11.30 Central. The phone number to access the call is 888-286-8010 with a passcode of 75135302. The phone replay will be available for one week until September 19th. If you have questions please contact us, otherwise thanks for your interest in Brady and have a great day. Now please disconnect the call.

Thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day. Frank M. Jaehnert - President and Chief Executive Officer: Thank you, Fab.