Barbara Bolens – VP & Treasurer Frank Jaehnert - CEO Tom Felmer - CFO Matt Williamson – President Americas Region Peter Sephton – President European Region

Matt McConnell – Robert W. Baird William Stein – Credit Suisse Charles Brady - BMO Capital Markets Anthony Kure – KeyBanc Capital Markets Rob Damron – 21st Century Equity Research [Andy Young] – Thomas Weisel Partners

Good day and welcome to the third quarter 2008 Brady Corporation earnings conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Barbara Bolens, Vice President of Director Relations; please proceed.

Good morning everybody, we’re glad you could join us. During our call this morning you will hear from Frank Jaehnert, CEO and then Tom Felmer, CFO who will be presenting Brady's quarterly financial review. Also joining us this morning is Matt Williamson, President of Brady Americas and Peter Sephton, President of Brady Europe who all will be presenting 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 do have a few minutes to get to those while we go through our Safe Harbor Statements and other information. 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 of 2007. Second, please note that this teleconference is copyrighted by Brady Corporation and there may be no rebroadcasting of this without express written consent of Brady. Note that Brady will be taping the call and rebroadcasting it and your participation in the question-and-answer session will constitute your consent to being recorded. Thank you and now here is Frank Jaehnert.

Good morning and thanks for joining us. We are very pleased with the results of our third quarter. While our organic sales were down 1% we increased our EPS by 19%. We have talked over the last year about the efforts we have made to proactively improve our cost structure and we are seeing the benefits of those initiatives. We have taken advantage of this quieter period of acquisition activity to work through integrations and believe that the vast majority of the heavy lifting in integrations is behind us. We can now focus on operational efficiencies and productivity in our businesses. We know we are not as efficient as we can be in many of our businesses, and have efforts going on throughout the company to leverage best practices and infrastructure to become more efficient. As we communicated at the beginning of the fiscal year, working capital improvement is a priority for our entire company. I am pleased that year-to-date we have improved operating cash flow by more than 90% over last year which is a clear sign that our efforts are paying off. We have seen the momentum of improvements build each month as common processes for improving working capital are rolled out through all our businesses. We believe we can make improvements in our operational efficiencies with similar efforts as well. We certainly see evidence of economic weakness in many of our key end markets, especially in the US but recently in Europe as well. We believe that we have and will continue to make the necessary adjustments to our cost structure to adapt to a slower growth cycle. We have committed to above-average returns to our shareholders in growth periods as well as in slower economic times. I will now turn the call over to Tom Felmer who will walk us through the third quarter financial review.

Thank you Frank and good morning everyone. I would like to walk you through Brady’s third quarter results beginning on slide three of our presentation. As Frank said despite the challenging economic environment we delivered a solid quarter. Sales for Brady’s third quarter were $382 million, up 10% over prior year. Margins continue to improve as we generated 49.6% in gross margin, up 80 basis points from fiscal ’07 third quarter. SG&A was also up slightly at 33.2% of sales. Operating income came in at $52.6 million, up 14% over last year and up 40 basis points at 13.8% of sales. Net income for the quarter was $34.4 million, up 19% compared to prior year and net margin was 9%, up 60 basis points compared with last year. We generated diluted EPS of $0.63, a 19% increase over prior year. In addition to our solid operating results we continue to see improvements in our cash generation as we generated $64 million in cash flow from operations, up 51% over last year’s third quarter. Moving on to slide four, you will see a breakdown of our sales growth. Our 10% growth in the quarter was made up of 5% acquisition growth and 6% growth in currency while our core business declined 1%. Our business leaders will provide more details in growth by segment in a few minutes. On slide five you can see that we had our second quarter in a row with nice margin improvements over prior year. While we do see increases in some of our raw material costs, we have been able to improve our margins by moving our sales mix to our entire margin products and maintaining a focused and disciplined approach to holding costs in check and improving productivity throughout all of our operations. We believe that even if we continue to see soft sales growth in the next quarter we will continue to see improvements in our gross margin line. On the bottom of slide five you can see that we did have a slight increase in our SG&A as a percent of sales over fiscal ’07. We are working hard to keep our SG&A flat with prior year as we make our way through this soft economic cycle and even though it is a challenge to generate top line growth right now, we continue to invest in areas that will give us long-term benefits such as further SAP implementations. We had four businesses go live on SAP in the third quarter and we’ll have one more unit go live in the fourth quarter. By the end of the fiscal year we will have had 24 SAP deployments in the last 24 months. By holding discretionary spending in check and continue to improve productivity and infrastructure we hope to generate leverage from our SG&A line as the economy improves. On slide six you can see that we are beginning to accelerate our R&D investments. While fiscal ’07 third quarter was a soft comparable we are looking to increase R&D spending on proprietary products in order to generate incremental new sales and increase margin. Examples of new products introduced in the quarter include a new visitor management software program from our StopWare business, and extreme RFID high performance labels which were introduced by our Brady businesses around the world. Moving on to slide seven you can see that we have generated nice improvements in operating income and in net income in each of our first three quarters this year with operating income and net income improving 14% and 19% respectively over Q3 of F07. As expected we did see a lower tax rate in the quarter. The F08 Q3 tax rate was 26.2% which brings our year-to-date tax rate down to 28.5%. On slide eight you can see that we continued to deliver solid EPS improvement each quarter as Q3 EPS is up 19% over prior year. I also want to point out here that we did repurchase approximately 944,000 shares in the quarter. This added about $0.01 to our EPS in the quarter. Also on slide eight we show our EBITDA for the quarter and you can see that it is tracking very closely to our operating income results. Slide nine walks us through our cash changes since the beginning of the fiscal year. A strong cash flow from operating activities over fiscal ’07 is in large part as a result of our efforts in accounts receivable and inventory improvements; $24 million in receivables and $33 million in inventory. Slide 10 is a new slide we are presenting this quarter to show free cash flow as quarterly comparisons since fiscal ’05. We define free cash flow as cash flow from operating activities less CapEx. You can see that our current year’s trends are significantly above prior years. On slide 11 there were no changes in our debt in the third quarter. We continue to carry $500 million in long-term debt at 5.26% interest. During the fourth quarter we will be making our first principal payment against that debt of about $21 million. Our quarter-end cash balance was $227 million and our net debt dropped to $273 million. On slide 12 our debt to EBITDA and net debt to pro forma EBITDA have dropped to 1.9x and 1x respectively leaving us conservatively leveraged allowing flexibility should we identify attractive acquisition opportunities in the near future. And finally on slide 13 I would like to explain some changes in our FY08 guidance. First we are raising our sales guidance to between $1.50 billion and $1.52 billion which is up from our original guidance of $1.43 billion to $1.46 billion. The increased guidance reflects the current sales trends, exchange rates and impacts from the two acquisitions we made earlier this year. Our net income guidance remains unchanged as we expect to generate between $129 million and $135 million of net income. Even with the expectations of a soft economy we believe we have made and will continue to make enough operational improvements to allow us to maintain our net income guidance. Also our diluted EPS is expect to be between $2.33 and $2.44 per share for the year as we adjust for the new share count following our share repurchase in the third quarter. We expect our diluted share count for the year to be about 55 million shares. Other assumptions that we are making for the year include a full-year tax rate of 29%, CapEx of $30 million which is down from the $45 million we originally projected, and depreciation and amortization consistent with original projections of $65 million. We will now move on to our regional updates and I will provide the update for the Asian region as Allan Klotsche cannot be with us today. After the Asia presentation Peter Sephton and Matt Williamson will cover the rest of our businesses. Moving on to slide 14, Asia Pacific sales for the third quarter were $82.1 million, up 1.1% from last year. Organic growth was down 7.4%, acquisitions added six tenths of a percent and currency added a positive 7.9%. While this quarter’s revenues were below expectations we do believe that given our current pipeline we will have positive organic growth in the fourth quarter and we expect that momentum to continue into F09. Our third quarter performance in the mobile handset market was very similar to what we saw in the first half of the year. We were able to grow our sales in market share with a subset of our customers who value our design engineering and advanced production capabilities. Our sales to these companies were up between 5% and 20% despite the fact that there continues to be pricing pressures and declining average selling prices with these customers. With growth rates at or exceeding market growth rates, we are pleased that our efforts to design in high value parts at the design centers are appearing to pay off. At the same time our sales were increasing to this segment our sales decreased by an even greater amount to two discrete groups of customers. One, a group of customers who were losing large chunks of market share themselves and two, customers that we have chosen to deemphasize based on their ranking of price as overriding innovation and quality. With the latter group we have decided not to chase them with the lower margin commodity parts. Although our relationship with this group of customers remains strong we have chosen not to dedicate as many resources to support them. As we look at the net impact of these ups and downs for the remainder of the year we expect to see core growth increases over the same period sales of last year. From a competitive perspective we have seen local Asian competitors predominate versus some of the multi national companies which we have historically competed with. Our approach to these changes in the market conditions will be to continue to streamline our infrastructure to ensure the lowest cost delivery without sacrificing base line service levels as well as further investment in R&D focused on proprietary new products which will enhance the performance of newer models of mobile electronics. We believe that these innovative solutions will be value by the industry as they strive to differentiate themselves with higher feature phones. The continued success of products like the iPhone in addition to the upcoming rollout of 3G in China will drive demand for feature-rich mobile devices and which we are well positioned to win. We are presently in development of some innovative and differentiated new products targeted toward the feature-rich fall production models. Additionally we expect a realignment of resources to result in an uptick in our overall profitability in this sector. The adjustments we plan and need to make will take place throughout the upcoming fiscal year. Looking at the rest of the Asian product portfolio our business is performing as expected with moderate growth. Although a much smaller portion of the Asia business, our hard disk drive business has seen an improvement in results. We have combined a more efficient geographic footprint with proprietary differentiated product offering into a successful and growing business. With the rapid changes in technology in the electronics market the key to our success with this strategy will be to continue a stream of innovation which is recognized by our customers as a value adding part of the overall design. Our high performance label business grew in line with the market. Some of the products that we have successfully introduced into North America and Europe will be launched in the upcoming quarter in Asia. Our safety and facility ID business continues to grow with the support of a larger and more focused group of channel partners that we have been developing. During the quarter we successfully launched SAP in Australia where we have our largest base of MRO business in the region. Short of a few small implementation bumps we were pleased not to have any major disruptions in customer service levels. Segment profit for the region was $11.1 million, down 6.8% from last year’s segment profit of $11.9 million. Looking forward to the fourth quarter of our fiscal year, we continue to balance our portfolio in the region in a way that will position us for profitable future growth. We do not see conditions worsening as we make these adjustments for the future. Next is the Europe report with Peter Sephton.

Thanks Tom and good morning everyone. Continuing on slide 14, sales in Europe grew by 20% in the quarter to $133.4 million compared to $111.3 million last year. Acquisitions contributed 9% of this and the further strengthening of the European currencies against the US dollar added a further 11%. Organic growth was flat against a very tough comparable last year where our direct marketing businesses in the UK and France in particular, benefited from outstanding growth from the No Smoking legislation which as you remember was a one-off. When we look at our business by brand, our direct marketing businesses in Germany and Italy, which were not affected by the same legislation last year performed well with solid growth, as indeed did our start-up which include Spain, Portugal and Sweden. Additionally by benchmarking best practices in our direct marketing businesses continued to improve operating margins plus continuing to invest in new initiatives to add new customers to our customer data base. Another area that we’ve been driving hard and I’d like to point out is our multi channel approach and our internet sales across the region grew by 21% as we continued to leverage our e-commerce platforms and our e-marketing capability right across the region. We’ll move on to the Brady brand, the main source of growth has been our Brady MRO offer, most notably the product ranges supporting the telecom market and lockout/tagout products for the process industries. We also launched aggressive promotions on selected printers and continue to see above expected results with our new IP printer. Growth rates remained healthy in most countries. Moving on to our die cut business, this benefited from an increased focus on higher margin businesses and the cost reduction measures that we put in place last year. We have enjoyed some early success with our medical die cut initiatives in Germany and are planning a similar initiative in Sweden. This initiative diversifies our customer base with unique products with longer lifecycles and more sustainable margins. We also continued to leverage the acquisitions that we made recently. We merged our Italian businesses following the acquisition of Moderno Tecnica which has resulted in a solid increase in profitability for the combined business. Similarly the acquisition of SPC in Belgium has performed very well with double-digit sales growth by signing up new distributors. In the UK our business benefited from the success of Scafftag which experienced substantial growth and has enhanced our offer for lockout/tagout products right across Europe and also the Middle East. In total Europe generated a segment profit of $36.2 million, an increase of $6.9 million or 23% up on last year. Profit as a percent of sales increased to 27.2%, up from 26.4% last year. We are pleased with this improvement over an outstanding third quarter last year. We anticipate a tough economic headwind in quarter four and continued tough comparables due to the No Smoking legislation. We are however well positioned in all our geographies with a leaner cost base, robust marketing programs and continued excellence in customer service. Our focus in the region on MRO products and markets should help us be more resilient to any negative economic cycle. I’ll now turn the call over to Matt Williamson who will report on the Americas. Over to you Matt.

Thank you Peter and good morning. Please refer to slide 15. Brady America sales in the quarter were $100 million, an increase of 14%. Organic sales growth was 3% which currency added 3% and acquisitions 8%. The organic growth of 3% within the region was driven by strong results in the industrial OEM and education markets offset by slowing in the electrical and utility markets. We are pleased with the results from our IP printing systems sold for industrial labeling applications and our new line of [Veriquest] visual products designed for the education market. The Veriquest products provide a comprehensive system to improve student achievement and are a nice addition to our proprietary systems products. By geography the Brady Americas growth was slightly negative in the US and Mexico but we continue to see strength in our label and die cut business to industrial and electronic OEMs in Brazil. In addition we experienced strong growth in our Canadian business. We continued the integration of SPC into our core US MRO business by completing the SAP implementation at SPC in quarter three which will help continue to drive efficiencies and synergies within the business. We continue to take advantage of cost reduction opportunities within all of our businesses and as a result we have realized a reduction in work force over the past year of over 6% in the region. This also includes a movement of products to lower cost plants within the region and new equipment to automate manufacturing processes. During the quarter we completed the consolidation of our two medical die cut businesses into a new plant in Dallas. Combining these two smaller businesses helps us leverage our resources and drive improvements in profitability. We have also invested in the clean room manufacturing and automated packaging in this business to help secure a new contract medical business. In addition in an effort to offset rising costs we moved up by several months a US price increase that goes into effect on June 1st in the core Brady brand businesses as well as in other businesses. Segment profit for Brady Americas rose 12% or $2.5 million to $22.7 million in the quarter driven by increased sales volume from both base business and acquisitions. Segment profit as a percent of sales was just slightly below the prior year at 22.6% due mainly to unplanned costs related to the combination of the medical die cut businesses and investment in new product development. During the quarter we also experienced a 15% decrease in working capital versus prior year quarter which is attributable to specific efforts which began earlier in the fiscal year. In direct marketing and people ID, sales in the Americas region were $66 million for the quarter which is flat compared to last year. Acquisitions contributed 1% and foreign currency impact was a positive 2% in the quarter. Organic growth was negative 3%, negatively impacted by a softening in the construction and manufacturing markets which particularly affected our [Emedco] business. Our Seton business showed stronger results and moderate organic growth for the quarter due to its focus on the broader MRO market. We also experienced a slowing in our Clement and personnel concepts businesses as response rates to mail campaigns have come in below expectations. By geography we experienced solid organic growth in Brazil and moderate declines in both the US and Canada. During the quarter we launched passage point global software which is a new enterprise level visitor management solution in our StopWare people ID business. The software is designed to be compatible with most access control systems and can be integrated with a host of other applications to make it the most comprehensive visitor management solution in the market today. In an effort to continue to drive efficiencies and synergies within our recent acquisitions we completed the successful SAP implementation in our [Identicard] business during the quarter. As I mentioned with the Brady Americas business we look to take advantage of cost reduction opportunities within all of our businesses and as a result have realized a reduction in work force over the past year of over 8% in the region. Early in the quarter we completed the acquisition of DAWG, a $4.5 million direct marketer of sorbent spill containment products and safety storage cabinets that help keep facilities safe and clean. This company is headquartered in Terryville, Connecticut and allows us to increase our share of the sorbent and spill containment market which we added to our portfolio through the acquisition of Sorbent Products Corporation one year ago. Segment profit for the quarter was $17.5 million, a decline of 2%. As a percent of sales segment profit was slightly lower than the prior year at 26.5% due to the decline in the base business. Finally during the quarter we experienced a 9% decrease in working capital which is attributable to specific efforts which also began earlier in the fiscal year. I’ll now turn it back to Frank Jaehnert.

Thanks Matt. As to conclude our fiscal year it is clear we are on an economic slowdown in the US and we see certain markets in Europe following as well. We cannot change the external forces that affect or markets, however we can impact how we react and how we adopt our businesses lower conditions. Over the last year we have made substantial changes to our cost structure to adjust for market and economic conditions. Our major integration efforts have been completed as planned and we have combined production facilities, leveraged investments such as SAP, and looked for opportunities to increase our efficiency in our facilities. But we are not done yet. We know we have many other ways to leverage best practices throughout our organization and that is what we are focused on today. I believe we have responded quickly to assure we can rival this period of slower growth in the best possible way. We are continuing to invest in our business and at the same time are creating a cost structure that we will be able to build from when our markets return to a more normal growth period. We have begun our annual planning process and are excited about the opportunities we see for our company long-term. That is the end of our prepared comments and we will now start the Q&A.

(Operator Instructions) Your first question comes from the line of Matt McConnell – Robert W. Baird Matt McConnell – Robert W. Baird: Do you expect your free cash flow generation for the year to follow the normal seasonal pattern meaning I guess just a little under half of the annual free cash flow in the fourth quarter?

I would say that it will continue at the similar trends. Obviously we’ve seen an uptick throughout this year but we expect the solid cash flow returns to continue. Matt McConnell – Robert W. Baird: I assume acquisitions are still the primary use of cash, could you talk about the pipeline and whether there are immediate opportunities or what geographies or products are of the most interest right now?

We continue to look for acquisitions; it’s our number one priority to spend our cash, to invest our cash. We have communicated earlier and this is still correct, our focus is primarily on MRO as we’ve done so many acquisitions in OEM in the last two years and we are still in the process, in the final process of digesting this. But MRO is our focus. We’re looking in all geographies. We look not only in our core space but we also look at adjacencies. For instance having required SPC and Transposafe in the last year is where a little bit adjacent, not exactly our core growth so we can look at this. As far as the health of the pipeline, the pipeline used to be larger but this is always a, a certain part of time the pipeline goes up and goes down. But I hear sometimes people suggesting that the economy slows down and that not that much money in private equity hands that this should provide good opportunities for companies such as us for industrial and we have not seen this yet, the impact. The price expectations are still high and private equity at least in our segment is still pretty healthy. Matt McConnell – Robert W. Baird: And so then the repurchases in the quarter, was that under the September, ‘07 authorization? I’m trying to figure out if the March authorization is still unused?

That’s correct. Matt McConnell – Robert W. Baird: Any idea what pace that would used or--?

Our number one priority is acquisitions and we have no authorization out there and if we feel the time is right and it depends on many, many different factors. It depends on the acquisition pipeline, it depends on the price of our stock, it depends on our cash level. We know we can execute.

Your next question comes from the line of William Stein – Credit Suisse William Stein – Credit Suisse: I’m trying to make sure I understand the CapEx requirements of the company. It seems as though CapEx as a percent of sales has declined pretty steadily over the last few quarters and I think you might have mentioned guidance for the full year, can you repeat that and can you give us an idea for what we should be thinking about as a normal CapEx spending level as a percent of sales going forward? Tom Felmer I think if you look historically, the last two years we had some pretty aggressive investments in Asia and in SAP and what you’re seeing is that we’re dropping back down to our historical CapEx levels which run in the mid 2%, 2.5% range. I would expect that going forward. We don’t see massive expansion, certainly at the levels we were and the bulk of the heavy expenditures and the big unit implementations of SAP are behind us now. William Stein – Credit Suisse: What was the guidance for fiscal ’08 or the fourth quarter?

I believe we have the full-year CapEx guidance at about $30 million. William Stein – Credit Suisse: Just a clarification as well, on the business in Asia, we’ve seen organic sales declines and you talked about the reasoning behind that, did I hear you right that you said that you’d expect positive organic growth in that business in the upcoming quarter?

We did cover that and that is what we said. When you look at the pipeline of activities, we feel very good about our pipeline looks better where we are today compared to one year ago and again there’s still always be the issue of allocations once you get down to, actually getting the orders from the various companies. But right now going into the fourth quarter we feel good about the pipeline. William Stein – Credit Suisse: And the big variability I assume is on the handset side not the hard disk side?

Yes, it’s certainly more volatile on the handset side, yes.

Your next question comes from the line of Charles Brady - BMO Capital Markets Charles Brady - BMO Capital Markets: With respect to your revised top line revenue assumptions, how much of that is organic growth versus acquisition or FX? I’m assuming you’re factoring in some of that price increase that you just talked about hitting in June; can you give us a sense of the magnitude of that price increase in the Americas?

Looking at the organic growth we’re still looking at relatively flat organic growth for the next quarter.

It’s primarily currency and acquisitions. I think last quarter we did not adjust our guidance at all, right. We did not adjust our sales guidance and we didn’t adjust our earnings guidance and of course we have made the acquisition of Transposafe which typically the first year in acquisition doesn’t contribute much to earnings but of course it contributes to sales and maybe we would have been better off to adjust our sales guidance to include the acquisition of Transposafe but it was not material enough in our mind to adjust the guidance. Maybe in hindsight it would have been better to do this. So its acquisitions and currency primarily and if we have a price increase in June the year is over in July and so I wouldn’t count too much on this, the impact of this on the top line especially. Charles Brady - BMO Capital Markets: So you can you give us some additional detail on how much that price increase, because obviously that doesn’t do much for ’08 but it certainly has an impact on ’09?

There’s a variety of different businesses in the Americas but if you look at the core Brady business we’ll have a price increase on average is 5%. That varies based on individual products. We have a little higher price increase with our SPC business which reflects the increase in the cost of resin so it’s a little higher increase than 5 and if you go down to Brady Brazil, we’re having a price increase there in the range of 5% to 10% based on the types of materials that we’re selling and feel that we can get a little bit more there based on our position in the market, but that will give you a flavor for it but it varies by business and by product.

It wouldn’t be across the board. I wouldn’t want anybody to take a 5% price increase and put it in their model across the board. That’s on specific product lines especially where we have something proprietary where we have something that nobody else can offer. When it comes more to the commodity products, we talk about lower numbers. Also Matt pointed out and its very important that in some of our businesses we have also material price increases like solvents which is oil based and so part of this is passing on material price increases which we are getting to our customers.

The other thing to point out is that we have contractual arrangements with customers and distributors and we honor those contractual arrangements and so we can’t reflect an immediate price increase with a large portion of our business. Charles Brady - BMO Capital Markets: On the R&D spend, if I heard you correctly, it sounded as though you’re going to be spending more on R&D, in terms of dollar amounts, should we expect the continuation kind of at the same run rate we’ve seen in the past couple of quarters or looking more so in ’09 should we really expect that to ramp up in a meaningful amount?

R&D is always very project-specific so we might have a launch of a couple of new printers in one particular time and this might mean that our R&D expenses ramped up in preparation for this and then we might have maybe a period of less of those introductions and so R&D fluctuates a little bit. I don’t want to give a number for the fourth quarter or even for fiscal ’09 because we’re still in the middle of our business plan for fiscal ’09 and hopefully in the next couple of weeks we can give you a flavor of how we think fiscal ’09 is going to look like. Certainly before we report earnings for the full year we want to get back to you and provide you some guidance for ’09 and we can probably be more specific on R&D. But I have said before to investors and I want to repeat this, there are only two line items in the P&L which I would like to go up as a percent of sales. One is profit and the other one is new product development which is R&D and marketing related efforts. Whereas I’d like to see cost of goods sold and SG&A as a percent of sales, like to go down. So this gives you a little bit of an indication where we are pushing, what we are pushing for and the reason we are pushing for this is in order for us to get our organic growth to higher levels than what we had historically we believe our new products are meaningful, a good way to get there. Also proprietary new products are a way to defend our cost margins or even improve it. So that’s why we are pushing so hard on new products and are willing also to support it financially. Charles Brady - BMO Capital Markets: I guess the point I was trying to get to, you’ve been running 2.5%, 3% of sales for the past few years, are we kind of in that sort of range or would you contemplate a significant step-up say going to for instance a 4.5% or 5% real meaningful step-up?

I would say that it would not be easily accomplish to the kind of magnitude you are talking about because this means if you want to spend more on R&D, you have to get the people involved, you’ve got to get the projects going so I would say the numbers you mentioned is not what we’re looking at, at least not short-term.

Your next question comes from the line of Anthony Kure – KeyBanc Capital Markets Anthony Kure – KeyBanc Capital Markets: For the 2007, we announced the operational savings of about $14 million for ’08; do you think you’re probably going to finish the year ahead of schedule there as far as dollar amount?

The savings related to our restructuring activity, are we ahead or are we behind? I would say we are on plan, we are on track. We always refer to 2007 restructuring and our cost reduction initiatives because it was something we called out. We had a restructuring charge and it was significant because we made so many acquisitions after we just started integrating it but we keep going with this activities to reduce our costs and it might not be leading to significant restructuring activities so that we don’t have to record it on our income statement but the company always has something going on. For instance Matt talked about in the third quarter we combined our two medical facilities; one was in Minneapolis and the other one was in Dallas and we moved both of them to a larger operation in Dallas, Texas. Its things like this are always going on might not necessarily be big. So it’s hard to say, we don’t [inaudible] necessarily against our $14 million, we know there’s nothing material one way or the other so I would say we are on track. But there is additional stuff that we have been doing because we like to improve as a company and like to increase our earnings quality. Anthony Kure – KeyBanc Capital Markets: And given that you’re kind of planning ’09 or given to this stage, I know you don’t want to talk about particular numbers here but, do you think that you may have some more opportunity through ’09 to at least have a more pronounced savings schedule than you maybe thought at the beginning of this fiscal year, is that something that you can maybe talk about?

It’s difficult for me to remember what I thought at the beginning of the fiscal year.

I think in general the concept that we’ve been talking about is, with all the acquisitions we made in the last five years, about 30 of them, we’ve done probably the majority of the big physical restructuring and now what we’re doing is working on a lot of the operational and improvement on operational excellence activities within those businesses so you won’t see the big structure changes but we’re doing a better job of managing product portfolios within each business. So the improvements will be coming along those lines rather than one-time restructuring. Anthony Kure – KeyBanc Capital Markets: On the price increase discussion, maybe I missed it but I know there was a price increase announced for the Americas, do you think that there was some pre buy associated with that or is it not something that was given enough leeway on the announcement?

No we give good leeway. Our distributors demand that, in fact we give a 60-day leeway to our distributors and at this point there has not been any pre buy. Anthony Kure – KeyBanc Capital Markets: And since the context of the price increase was around the Americas and maybe I missed it but is there a similar dynamic that can take place then in Europe and obviously in Asia is not going to happen, but in Europe can you see similar type opportunity there?

Yes, I mean there are some opportunities. We’ve already taken the opportunity to increase prices, we had a fairly hefty price increase at the beginning of the year but a good proportion of our business in Europe is direct marketing and obviously we’re constrained there through a catalogue cycle. I don’t see any significant impact.

Your next question comes from the line of Rob Damron – 21st Century Equity Research Rob Damron – 21st Century Equity Research: I wanted to try to get my arms around the gross margin and the cost of goods sold, could you give us a little bit more color on raw material prices, how that’s impacted your cost of goods sold over the last 12 months and then to see the gross margin improvement, what have been the main factors driving the gross margin? Has it been more product mix or price increase? Maybe just give us a little more color from that perspective.

Its really been a, when you look at a company like ours, we have so many operating units and hundreds of thousands of SKUs, its hard to track the raw material impact on all of those, but when we look at gross margin its really been a mix of things. It’s been some, a shift in mix, we’re focusing very much on either pruning or moving up prices on low margin product, our sales forces are putting more emphasis on the higher margin product lines which we’ve had success with. A lot of operational improvement activities across really every business unit in the company. We are seeing some of the benefit of the structural changes that we’ve made over the past year flowing through to the margin lines. So a lot of it is dependent on the region, on the business, but it’s really a mix of all three of those areas.

We definitely have a philosophy to pass on price increases which we get from our suppliers, there is no question and if we can even anticipate what the price increases might be because sometimes if you are on a catalogue of a big distributor you might not be able to increase your prices during the year so you have to kind of anticipate. Now that is not always possible. It is again possible when we have something differentiating and proprietary and some other cases where we are more towards the commodity end, it’s more difficult. But that’s certainly one driving force. And of course we always go beyond what has not helped our organic growth especially in the handsets market has been moving the mix to a more higher end phones. But we are trying to pull all levers we can but I totally agree with you, we cannot tell, we don’t know this. Rob Damron – 21st Century Equity Research: On the balance sheet, inventory and receivable management looks like you’ve made a lot of progress there, do you have goals for inventory turns if we look out into fiscal ’09 or maybe how much incremental improvement do you see from these levels?

I would just say its continual improvement. We weren’t happy with where we were a year ago. We put working capital goals as part of everyone’s plan throughout the organization from Frank all the way down the organization just to point out how important it was to get our arms back around this so people working on inventory models, working on shortening our cycle times in operations so it’s a lot of activity in a lot of areas. So we’re certainly not done but I don’t have any number I’m able to share right now that would give you a target as to where we would end up.

Your final question comes from the line of [Andy Young] – Thomas Weisel Partners [Andy Young] – Thomas Weisel Partners: Back to the pricing involvement, can you give us some insight into your customers’ attitude to your price increase and also what are your competitor interim pricing can you pass most of your cost increase to your customer in Asia and Europe?

Let me preface it and then maybe Matt can be more specific, while nobody likes price increases. The attitude of our customers toward price increases is not positive. There’s no question about it. So we have to convince them that we are providing a value which they may be, if it’s a distributor, or its an end user, they might be able to pass on to their customers because we have something what nobody else has so its certainly easier there. As I said earlier if it’s more commodity like its more difficult because then there’s competition and then a little bit depends on what competition does. However we are the market leader and as the market leader you have certain responsibilities as far as pricing is concerned and we are certainly trying to go as far as we can but Matt said earlier 5% in some cases, it is by no means guaranteed that this will stick. Because there are discounts and so forth.

I’ll comment on the Americas and I have to say that and preface my comments that we have a variety of different products, different markets and its different in a lot of places relative to the answer to your question will they accept price increases. For example, in the area of our sorbent products we found strong resistance to increasing prices because it tends to be more of a commodity product and our competitors have just not been raising prices so we’ve had strong resistance there. Other areas where you have larger distributor, where they make selections in broad categories of product lines they’ll put products out for product line reviews in some cases and therefore are looking for product pricing decreases. And then as I mentioned there are some things where distributors just cannot take price increases really for the same reason Peter brought up, they have catalogues in the marketplace where they put prices on the products and so they’re price, they maintain their prices and we honor our commitments in that regard. And then we have contracts with end users where we’ve negotiated a price for a certain volume in a certain time period and there is restrictions in terms of what we can pass on to end users in those circumstances. And we want to honor those contracts as well so there’s a variety of things that we have to look at but we’re being passed on price increases and so we have to do that. We have to do that as much as we possibly can.

And we also believe that more new proprietary differentiated products will give us a better opportunity to pass on price increases. That’s why we are pushing so hard in R&D and new product development and marketing. So we think that’s the key to sustainable improvement in gross margin. Always try to move away from a commodity. Matt mentioned solvents; more commodity like. But this doesn’t mean it has to be like this all the time. Same with electronics industry, mobile handsets, hard disk drives which are more commodities. We are focusing more on where we can add value, where we can have an advantage over competition. We try to move away from commodity by always leveraging our R&D. We have about 200 people in our R&D department and we have adhesive compounding in our own coding so we are trying to leverage all those competencies to differentiate ourselves from our customers so that we can increase prices and we’re not being treated like a commodity player.

Just to add to that, and speaking from a European perspective, most of our regions around the world, we really are a niche player and most of our products aren’t commoditized and also worth bearing in mind that the actual of all of those many, many thousands of SKUs the average order value to the customer is really quite low so when you look at a price increase in absolute terms, its not that great. So in many instances we are able to pass on some of the cost increases that have experienced through raw material prices.

And I think we have really exhausted all we know about price increases. [Andy Young] – Thomas Weisel Partners: Back to SAP, you have implemented in place a few projects in the past 24 months; where are we in the process and are we expecting all this can be done in the next six to 12 months?

I think right now we have about 80%, 70% of our revenues covered by SAP right now so the majority of it is done. I think all of our large business units are done now. It’s just a matter of every year picking up a handful of the bigger businesses that are left and implementing them. Really it’s almost a maintenance basis now.

Our goal for next year is 80% and of course this very much depends if you didn’t make any acquisitions next year, we should be at 80% of our sales covered by SAP but then of course we hope to make acquisitions and this changes the picture then. It drags the percentage down. [Andy Young] – Thomas Weisel Partners: I don’t think you have any operation facility in China, but do you see any impact from the large earthquake in China recently on your operation there?

We checked with all our, we have seven or eight facilities in China and we have nothing at this problems and we didn’t have any people hurt or injured or any of our facilities being impacted so we were lucky in that regard. Thanks for asking.

There are no further questions; I would like to turn the call back over to Barbara Bolens.

Thank you very. We thank you for your participation today and would like to remind you that the audio and slides from this call are also available on our website. The replay of the taped call will be available via the phone beginning at noon Central today and the number to access the call is 888-286-8010 and a pass code of 99409075. The phone replay will be available until midnight on May 28th. As always if you have questions please contact us. Thanks for your interest in Brady and have a great day.