Bob Arzbaecher - Chairman, President and CEO Andy Lampereur – Executive Vice President and CFO

Mark Zepf – Goldman Sachs Wendy Caplan – Wachovia Securities Curt Woodworth – J.P. Morgan Scott Graham –Bear Stearns Chris Weltzer – Robert Baird Scott Blumenthal – Emerald Advisors Tom Brinkmann – BMO Capital Markets Steven Fisher – UBS

Ladies and Gentlemen, thank you for standing by, and welcome to the Actuant Corporation first quarter fiscal 2008 earnings conference call. Today’s speakers are Bob Arzbaecher, President and CEO, and Andy Lampereur, Executive Vice President and CFO. As a reminder, this call contains forward looking statements that are subject to the Safe Harbor language in accordance to the press release issued today, and in regard with filings with the SEC. (Operator instructions). As a reminder, this conference is being recorded on Wednesday, December 19, 2007. It is my pleasure to turn the conference over to Mr. Arzbauecher. Please go ahead sir.

Thank you, Operator, and good morning everyone. As you’ve hopefully read in today’s first quarter earnings announcement, we’re off to a fast start for fiscal 2008. A combination of factors allowed us to beat our sales and earnings guidance for the first quarter and to raise our guidance for the full year. First, we had 3% core growth, stronger than the 1% for the quarter we were expecting. Next, we had very good margin conversion, with EBITDA margins up 130 basis points excluding our Europe electrical restructuring. Importantly, all four business segments contributed to this margin increase. And finally we benefited from strong currency translation created by the weakening US dollar. While we view this largely as a translational benefit, our strong presence outside of the US, which comprises about half of Actuant’s total sales bodes well for the months and quarters head. All of these factors led to record first quarter sales and earnings, with EPS up 27%, excluding the Europe Electrical restructuring. Andy will go through the numbers in detail with you, and then I will come back and discuss our guidance and a few other topics with you, Andy.

Thanks Bob. I’ll be covering our consolidated results first this morning, and then I’ll provide some comments on the performance of each of our four segments. My first slide is a simple comparison of our first quarter results between this year and last year. As a reminder, it reflects the first quarter’s two for one stock split. Overall, the comparison of results looks great. 21% top line growth to $415 million, 32% EBITDA growth to $68 million, and 27% EPS growth to $0.52 a share. All of these are records. The $0.52 a share of EPS for the first quarter excludes a European Electrical restructuring cost. We booked a $5.5 million or $0.09 a share charge for cost this quarter. Including this restructuring prevision, our first quarter EPS was about $0.43 a share. During the first quarter, we reached workers counsel agreement on reducing headcount by another 20 people in Germany; we exited certain product lines, as well as a German assembly building. We anticipate booking the final European Electrical restructuring provision in our second quarter, which will wrap up this project. Now I’ll provide a little bit more color on our record first quarter results. Our first quarter sales growth was 21%, consisting of 3% core growth, 5% from the impact of currency rate changes, and 13% from acquisitions. Sequentially, our core sales growth slowed as we had expected from 6% last quarter to 3% this quarter. However, as Bob mentioned, we had forecasted about only 1% core sales growth during the quarter, which we viewed going into the quarter as our lowest growth quarter of the year due to tough comps in both North American truck and our automotive convertible top business, the base to our internal forecast came from our industrial segment and stronger than anticipated truck sales outside of the US. We saw a strong core sales growth both in the industrial and engineered products segments, which each reported double digit increases on a segment basis. Meanwhile, total actuation system segment sales were in line with our expectations in low single digits, and electrical segment core sales growth of minus 3% was weaker than we had forecasted. Now if we drill down one more layer into product sales, you can see that we enjoyed double digit growth in both of our industrial segment product lines. High Force Hydraulics, which is Enerpac, and Joint Integrity, which is Hydratight, we also enjoy this overall engineered product segment double digit core sales growth in the engineered products segment as well. The weaker than anticipated sales from the electrical segment primarily came from the European Electrical and Professional Electrical product lines which were down in the mid to upper single digit range. I’ll provide a little bit more color on each of these as I walk through our segment results in a minute. Margins on the consolidated basis overall were very good and we were pleased with the margin expansion. As you can see on this slide, all four segments had year over year EBTIDA margin increases. Overall acquisitions were a drag to margins, as they had lower margins than our base businesses in the quarter. However, this was offset by other factors including operational improvements, the impact of higher volumes, pricing in some of our markets, and decent cost control. While we were pleased with the 130 basis point first quarter margin expansion, we don’t expect this level of year over year expansion for the balance of the year. Now I’ll review performance by segment. First with our industrial segment, results were very strong and above our expectations. Overall core sales growth was 11% compared to 12% last quarter. Enerpac product line sales were up 11% on a core basis, compared to 9% in the fourth quarter, so we actually had sequential core growth which we had not anticipated. Our Hydratight core sales growth was also very strong, at 11%. Now one item we wanted to call out for you with the industrial segment is the fact that we moved our Milwaukee cylinder business from the engineered products segment to the industrial segment at the beginning of the current fiscal year due to an organizational realignment and we’ve adjusted all prior year segment numbers to reflect this change. Turning now to margins for the segment, they continued to be strong despite unfavorable acquisition mix including the impact of TK during, TK Simplex during the quarter. Looking forward, we expect continued solid results from this segment for the year, but believe Enerpac’s core growth will moderate as the year progresses. Turning now to our electrical segment, the top line was a little lighter, as I mentioned, than we had anticipated, primarily due to year over year declines in both European Electrical and Professional Electrical product lines. In the case of European Electrical, our DIY customers reported weaker sales in fall, which impacted our sales to them. Meanwhile, the weakness in the Professional Electrical product line primarily reflected inventory adjustments at a few of our larger OEMs. Sales in the other two product lines within electrical, being North American Electrical and Specialty Electrical both grew on a core basis in the low single digit range, which was in line with our expectations. While total segments sales for the first quarter, our core sales were down 3%, we expect this to improve for the balance of the year to low single digits. On the profit margin front, our electrical margins were in line with the forecast, and we continue to expect full year expansion driven by both cost reductions and the benefit of European Electrical restructuring. Turning now to actuation systems, the first quarter core sales we had anticipated, that our first quarter core sales would not be positive due to the tough comps we had a year ago with the automotive launches in our North American truck free-buy, but we were surprised in that overall core sales came in in positive territory, albeit at 1%. This was primarily driven by strong truck demand outside of North America. As expected, our R.V. growth did moderate in the quarter to 4% growth as we started to anniversary some of last year’s market share gains. Looking forward, we expect core sales growth in this segment to continue to be in the low single digit range for the balance of the year. From a margin standpoint, we are quite pleased with the margins in actuation systems and saw a nice improvement in several of our businesses. This was a combination of price increases, manufacturing efficiencies, and other cost reductions. We expect continued year over year margin expansion within the actuation systems for the balance of the year. Now wrapping up our segment discussions with our engineered products segment, we are also pleased with the results there. Our core sales growth was better than we had expected at 19%, but we don’t think this is a pace that’s sustainable for the year. This figure does exclude the results of Maxima, which we acquired in December of last year, and that is also our segments largest business. Looking forward, we expect the full segment, including Maxima, the sales moving forward, excluding currency to be up in the high single digit range. On the margin standpoint, well, on the surface margins looked like they were down at the operating profit level, that was primarily acquisition mix related and reflected the amortization expense associated with the Maxima acquisition. If we exclude acquisitions, our operating profit margins were up year over year with solid improvement in most of our units. Before turning it back to Bob, I wanted to provide just a couple of comments on our cash flow and our debt picture. Our quarter end net debt was $505 million, which is about $30 million more than what we entered the quarter with, reflecting the $47 million we spent on the TK Simplex acquisition. We typically use a fair amount of cash flow in working capital in the first quarter due to seasonality and this one was no exception. Overall, I was pleased with the cash flow for the quarter in that we generated $25 million of free cash flow, which enabled us to maintain our debt to EBITDA leverage at about two times. Equally as important, we have our entire 250 million bank revolver available for acquisitions and other growth initiatives for the balance of the year. With that I’ll turn it back to Bob.

Thanks Andy. To augment Andy’s comments I also wanted to provide a few updates on each of our operating segments before discussing guidance. Starting with industrial, we’re really off to a great start in the industrial segment for fiscal 2008 with strong future prospects as well. A good example that happened this quarter, Hydratight landed its first multi-year frame agreement in the Gulf of Mexico. A frame agreement is essentially a blanket maintenance contract for, to work on the integrity a joints for the customers installed assets. We have numerous frame agreements in Europe, and hope this is the first of many in North America as we put more focus on our service revenue in this region. Moving to the electrical segment, we’re seeing a number of changes from the, some of our North American home center customers as they go through their normal product line reviews. We won some new business and we lost some business as part of these reviews. While not getting into specifics due to customer and competitive reasons, we’re going to being seeing an increase in our Gardener Bender sales with Home Depot and a decrease in our business with Lowe’s, with the net effect being a modest revenue loss. While these changes are not material to Actuant, we’re providing them to you for transparency. These changes have been included in our guidance that I will discuss shortly. Moving now to actuation systems segment, I wanted to emphasize the progress that we’ve made on improving margins and then the strength of the truck business outside of North America. As Andy mentioned, we are experiencing very strong sales growth in both Europe and China for our cab tilt product line, and this has been increased in our forecast for the rest of the year. On the margin front, we have seen steady improvement in both the auto and R.V. margins over the last several quarters. We still have a ways to go here, but we’re making good progress and you’re seeing that through our segment results. Finally, let me comment on engineered products. The sales and earnings growth of this segment have primarily come from last years Maxima acquisition, although the base units that also reside in this segment have been doing pretty well also. We are getting more and more excited about the growth prospects of Maxima the longer we own it. Culturally it’s been a great fit, and the Actuant and the Maxima employees have embraced and added to our lead programs and our continuous improvement approach, so stay tuned for this one. Next, I’d like to provide you some, an update of our acquisitions. We completed one transaction during the quarter, that being TK Simplex. This transaction was completed in September and is well on its way through its 90 day integration process. Early results look good from a sales and cost synergy point of view in this acquisition. Given that the credit markets have tightened considerably for private equity investors during the last three months, we would have expected valuation expectations of sellers to moderate. This really hasn’t happened in our opinion. But against this backdrop, our return on invested capital valuation philosophy hasn’t changed. While this leaves us on the sidelines on some deals, there’s still plenty of else to work on, and we feel pretty comfortable with our target of 150 to 200 million of tuck-in acquisitions for the fiscal year, with TK already completed, totaling 47 million. We have a fairly full funnel of activity that we’re working on. And this activity is very broad based, with tuck-in possibilities in all four business segments. Lastly, I’d like to update you on our new China facility. As you see pictured here, we’ve broken ground on our new Actuant campus in Tiacang, China, and expect this facility to open in August of 2008. Tiacang is northwest of Shanghai, and outside the Shanghai province. This facility will accomplish a number of key things for Actuant. First, it will centralize our China manufacturing strategy, which has been increasing at a rapid rate. This manufacturing will augment our sourcing operations, which buy components and completed product from third parties. Tiacang will provide a campus environment for Actuant businesses to operate in. While we have existing facilities in and around the Shanghai area, none of them were large enough to support the expected growth from China. By creating this campus, our goal is to leverage the back office functions of IT, finance, engineering, customer service, warehousing, all of these kinds of functions, across Actuant for all the businesses doing business in China. Now moving to guidance. As you saw in today’s press release, we’re raising our fiscal 2008 guidance. The primary reasons for the upward revision are the strong first quarter performance, the weaker U.S. dollar, and changes in end market demand for businesses, with some units stronger than previously forecasted, and some weaker. The new guidance is for sales of 1.625 billion to 1.66 billion, and EPS of $1.95 to $2.05 per share. This guidance excludes the remaining Europe Electrical restructuring charges, as well as future acquisitions. It represents a 13-18% EPS growth for fiscal 2008, and if the midpoint or better is achieved, continues a string of seven consecutive years of EPS growth at or above our long term rate of 15-20% annually. Lastly, we are projecting fiscal 2008 free cash flow in the area of $130-140 million, which also continues a string of at least 100% conversion of net income. For the second quarter specifically, which is seasonally our lightest, we are forecasting sales of 385 to 395 million, and a corresponding EPS of $0.39 to $0.42 per share. This guidance also excludes the Europe Electrical restructuring. Versus last year’s second quarter, this is EPS growth of 11-20%. That completes my prepared remarks. Operator, I’d like to turn it over to you for instructions for the question and answer session.

(Operator Instructions.) I’m pleased to state that our first question comes from the line of Deane Dray of Goldman Sachs. Please go ahead sir, your line is open. Mark Zepf – Goldman Sachs: Hi, this is Mark Zepf calling on behalf of Deane.

Well, we’re pleased to have you Mark too. Mark Zepf – Goldman Sachs: Thanks a lot Bob. Quick question on electrical. I guess, first on top line and then on margins. Looking for the negative 3% core sales to improve sequentially through the year. What are the key drivers there? Is it just the inventory draw down at Professional going away, or is there something at the margin that we should be looking for on the DIY side?

Mark Zepf – Goldman Sachs: Okay, and have you seen on the DIY side, have you seen any of your customers draw down inventories there either?

No, nothing that appears to be a trend or any kind of a movement there. Mark Zepf – Goldman Sachs: Okay, great, and then Andy, on the margin side in electrical, comparisons got better, even as the core was a bit weaker. Are we reaching an inflection point where, farther along in the restructuring, the inefficiencies aren’t as much of a headwind, or, what’s, if you were to rank order the drivers on the margin improvement there, what were the most significant?

I think we do expect our margins to improve as we sequentially move out. I do warn you, however, the second quarter can be pretty lumpy, because it is a low volume period overall within our businesses. But we do believe we’ve come off the bottom. Mark Zepf – Goldman Sachs: Great, thank you very much.

Thanks Mark.

Thank you sir. Continuing on, our next question comes from the line of Wendy Caplan of Wachovia. Please go ahead, ma’am, your line is open. Wendy Caplan – Wachovia Securities: Thank you. Can you hear me?

Yeah, Wendy, good morning. Wendy Caplan – Wachovia Securities: Good morning. A couple things. Is there some way for you to quantify, have you quantified, Andy, the impact of acquisitions. You mentioned in several cases that acquisitions penalized results in the quarter. Do we have an EPS or EBITDA number for that?

Wendy, my comments about acquisitions hurting were more within some of the individual businesses from a margins standpoint, from a mix standpoint. Overall, the acquisitions, the five acquisitions we did last year, and the one we did this year, collectively definitely added, they were accretive to earnings overall. But, we don’t provide that on a quarterly basis, in terms of the exact number. But they definitely were accretive. Wendy Caplan – Wachovia Securities: No, I wasn’t referring to the accretion, I was referring to, they would have, if margin, if we had not included those margin, or if we include the margin was impacted in a negative way by x percent? Or is there a…?

Margin? I’m not sure I’m understanding your question Wendy, if you can just try and rephrase it one more time? Wendy Caplan – Wachovia Securities: If we had not had the penalties from the acquisitions in the sense of, not the accretion, but the charges related to the acquisitions, the initial charges, what would the margin have been? Is there a way of quantifying that?

Wendy, are you referring, sorry, I’m not sure if you’re referring to the initial, when you say the initial charges, are you talking about the one-time amortization of inventory, that sort of thing? Wendy Caplan – Wachovia Securities: Right, that’s what I’m referring to.

Overall, for all the acquisitions, that piece of it was about a half million dollar drag overall, but that piece of it wasn’t a significant one-time item in the quarter. Wendy Caplan – Wachovia Securities: Okay. Thanks Andy, that was what I was referring to. Historically, you’ve spoken a lot, recently, you’ve kind of talked with us about some acceleration in terms of efforts in seeking a larger acquisition that could, I think you’ve talked about it, referring to it as adding another leg to the stool. When you’ve talked about acquisitions for ’08, you mentioned tuck-ins. Can you talk about whether your strategy to seek out larger acquisitions is intact, and are some of those in the acquisition backlog? What should we be thinking about that?

It’s a great question. And I think, we absolutely at our investor meeting in New York talked about new platforms. But let me put this in context. When we communicated that to you, we said, in likelihood is that sometime over the next three years we would add a new platform to the four platforms, segments that we have today. And we have just begun, when I’m saying begun, in the last 90 to 120 days, have begun to have some platform meetings. We have people internally who are working on that with Ted Wozniak, myself, Andy, all at the top of that group. We also have been using some outside resources, meeting with investment bankers and hearing what they think about new platforms. My goal is to try to have that list of ideas for platforms narrowed down to five by December of ’08. That’s when we do a strategic plan with the Board, and that’s when I plan to do it. So this is not something that you should expect seeing something happen immediately. Now, there are always assets for sale, and there was a recent asset this quarter in safety, that moved to another party. I’m not saying we won’t do one before the December period, I’m saying we’re going through a very deliberate process to identify and find those new platforms that we think have above average growth, and try to get those done by December. So, in our funnel, there are some of those ideas, nothing that applies to the 150-200 million of tuck-ins that we talked about, that would be outside of that. And nothing, to my point, that’s imminent at all.

I think the other point I would just add to that, Wendy, consistent with what we’ve said in the past, at least 80% of our M&A efforts are focused on tuck-ins, so that part of it.

Yeah, that’s true. Wendy Caplan – Wachovia Securities: Thank you, thank you. And one last question. Your European Electrical business, you’ve stated before, and you stated again today, that you expect the charges to be completed by second quarter of this year. Can you comment on the profitability in European Electrical at this point, and what you expect for that in ’08?

You know, we’re not going to get into specific sub-business segment thing, that’s just, we’ve been consistent on that. I think our original targets for this restructuring in the $7-$8 million zip code are still intact. You won’t get the full benefit of that in ’08, because we’re doing it halfway through the year, but those kind of targets are still intact. So that’s probably about all the guidance I’m going to give you. Wendy Caplan – Wachovia Securities: Okay, thanks very much.

Thank you. Continuing on, our next question comes from the line of Curt Woodworth of J.P. Morgan. Please go ahead sir, your line is open. Curt Woodworth – J.P. Morgan: Yeah, hi, good morning. Can you guys talk about any differences in growth rates you’re seeing globally for the Enerpac business right now?

Well, as we’ve been pretty consistent in telling you, really for the last six quarters, that the growth rate is moderating in North America, and is somewhere in the middle of the single-digit area for this area. Europe, much stronger than that, still in double-digit zip code, Asia even stronger than that, depending on when you look at it. Some of our Asian sales are a little lumpy, because we do a little more of these bigger infrastructure projects. But that would be the context. Now, against the backdrop of what we were forecasting, that’s a little bit ahead, as Andy talked about. Industrial was a little stronger than we expected for the quarter. Curt Woodworth – J.P. Morgan: And are you seeing any implications in terms of more of the project business for Enerpac from the tighter credit conditions that we’re seeing?

No, most of those projects are funded by governments, federal or state governments. They really don’t get influenced in a short-term period of time by that credit market. So I have not seen any issues there at all. Curt Woodworth – J.P. Morgan: Great, and in terms of the joint integrity business you’ve seen, there are pretty significant increases in MRO and upgrade spending on oil and gas. What’s the outlook there, what are your customers saying about incremental growth going forward and what’s really going to drive that?

Well what you’re describing, MRO and an oil and gas power gen environment, is precisely our business. I mean, we do do new installation, but the lion’s share of our hydro-type business is driven by the MRO nature of existing assets that are installed. And, obviously, with oil in the 80s and 90s, most of our customers are really running at capacity, trying to improve capacity, using a lot of new technologies to get every last minute, every last gallon of oil out of existing facilities. A lot of new technology going into that, and all of that is helping the MRO nature of our business. Higher pressures impact that, deeper drilling helps our business; so really, it’s a very favorable environment for the MRO nature of our business. Curt Woodworth-JPMorgan: Okay and in terms of incremental growth? Is it pretty much the song remains the same it’s just going to be continued incremental spending there to maintain capacity?

Yes I mean I think when we look at the growth of the industrial the we believe going forward that the oil and gas will be a little stronger than the industrial tool side of it and it's just what you described. It's our own nature of it. In fact we're in an area right now in the winter where you really can't do a lot of maintenance and repair in the North Sea. It's just too dangerous to be trying to do stuff on a rig or a platform. So this is actually our little of our slower season from a seasonal point of view. Curt Woodworth-JPMorgan: Okay and what are your expectations for the RV market this year?

Well we got a good data point at the national RV show in Louisville the first week in December. It's a tough market for RVs. We play in the motor home side versus the travel trailer side, a number of accounts talked about that orders were down at the show; a few said they were up. We see a lot of activity where people are extending their Christmas production shutdowns a little bit longer. This is not a big season for RVs right now anyways. You'll really get the real [litnis – ph] test as you get in to the spring season. If you boil all that together we were pleased with our first quarter. We, when I talked about adjusting forecast going forward this is one that’s probably a little on the minus side, being very conservative there. And we'll just have to see. Again it's, and I want to remind people and it seems like I have to do this often. You know, is RV is 5% of our total business. It used to be much bigger than that but now it's not that meaningful in terms of overall actual performance. Curt Woodworth-JPMorgan: Thank you

Thank you very much. Continuing on our next question comes from line of Scott Graham of Bear Stearns. Please go ahead sir your line is now open Scott Graham –Bear Stearns: Hey good morning. Several questions related to the top line. What happened in European DIY this quarter?

Scott what we, it hit pretty hard because had the change, we were up about 4% or 5% in the fourth quarter and then all of the sudden we were down in the 7%, 8% range this quarter. We were down essentially at all of the customers, we went digging in and looking at their volume through their stores came off quite a bit. Their reorders to us came off so it kind of surprised us how strong the fourth quarter was and how quickly it turned as one we’re watching pretty closely as we go forward. For the full year we assumed this thing was going to be flat out there so we're pretty confident that we will not see the same thing repeat for four quarters here. But it was a little bit of a surprise as we mentioned.

Now two things to comment on that Scott. Don't be surprised if you do see some negatives. I think we're trying to balance this here but we are getting rid of SKUs, unprofitable SKUs and you know the first way you try to improve an unprofitable SKU is to go get a price increase and if it's due to copper or freight or any of the costs that we have we're fairly aggressive at doing that. The second way in cop we are willing to walk away from unprofitable SKUs. We think that's the right thing to do and there's a major piece of work getting done as we speak on that. I don't think that was the major influence of the reduction Andy talked about but it probably had some effect and it probably will going forward. But again, the Europe Electrical losing sales there at our current profitability level before the restructuring is completed is not a bad thing. Scott Graham –Bear Stearns: Understood. Alternatively US DIY, even though the gross there was only moderate. It looks like you've been kind of outperforming that market for a while and even if it's just modest outperformance, some of your new products with some traction. What would you say that's attributable to?

I would put a couple of things on it. The first would be to say that you know if you look at the same store sales comps for Lowe’s and Depot as a proxy these guys are down in the 5% to 10% zip code. The electrical aisle is not as bad as the full store. The reason for that is the white goods, the lumber, much bigger ticket items tend to drive those same store sales. The electrical aisle tends to be an area that performs better than that because it's more of a recurring revenue if you will. People need to replace a light switch or something along those lines. So I start with the fact that the electrical aisle is not down as much as the same storm. And then our performance within that aisle has been favorable. This quarter we launched a major cable tie, a piece of business with Home Depot and we are probably a third of the way through that launch and that certainly helped our revenue with Depot. Lowe’s was reasonably flat, not a huge amount of change year over year. So again some of those wins and losses I refer to in my comments started from a positive point of view this quarter with people. Scott Graham –Bear Stearns: Sort of a question on the two businesses added (inaudible) to more program oriented obviously the convertibles and the US truck business. I know that both of those businesses you guys have been looking at trying to win some new platforms and have in fact won some and what have you and most of that I suspect as a 2009 oriented. Did we see maybe the bottom of the truck business this quarter or will it be next quarter and kind of the same question for the convertibles business in terms of bottoming.

Well I think the truck we probably have one more quarter Scott just because of the pre buy that happened in December. It will obviously depend on how strong January and February come along but I would say we're treading along the bottom maybe one more month. From the auto side I think you're getting into a period now where it really is year over year volumes that drive the unit volumes of existing platforms that drive our sales volume more than new platforms. Scott Graham –Bear Stearns: Right, could those businesses though be double digit growers in 2009?

Yeah, I think that the trucks probably got a better chance of doing that then auto but I would say both have that potential.

I wouldn't say for the full year in auto but you could have some quarters on the ramp I guess. Scott Graham –Bear Stearns: That's fine. Thanks

Thank you sir. Continuing on our next question which comes from the line of Chris Weltzer of Robert Baird. Please go ahead sir your line is now open. Chris Weltzer – Robert Baird: Good morning guys.

Good morning Chris. Chris Weltzer – Robert Baird: Most of my questions have been answered in the press release we talked about higher intangible amortizations affecting industrial margins. Is that solely acquisition related or is there something else going on there?

Solely acquisition. Chris Weltzer – Robert Baird: Solely acquisition, okay. And then on the new frame contract in the Gulf for Hydro tight is that a new business win for you or is that just converting an existing customer to a new contract tie?

A little of both. Chris Weltzer – Robert Baird: A little of both

A little of both

There was a customer we had a lot of frame agreements with in Europe and but they have assets here in the Gulf and we won it here. And a frame room, go head.

What I wanted to do was maybe just spend a second and talk about what, how frame agreements work but basically what a lot of asset owners are trying to do is just outsource the joint integrity away. You guys keep track of the joints you know wherever our assets are, we want you to try to service them, keep track of them, do it safely, adhere to our safety requirements do all the training you need, and there's a lot of service providers that work on an oil rig or oil platform and what some of these customers are trying to do is, hey we want to have more of a consistent safety approach where a single provider is responsible for the assets. So it's almost an outsourced maintenance if you will, would probably be a good way to describe it. It's been going on in the Gulf, for us in the North Sea for a long time. People like stat oil and other, this is the first one here in the US and we do to plan to market this as a trend and try to convince other asset owners that this a good way to kind of outsource a major concern you might have about joint integrity. Chris Weltzer – Robert Baird: Okay and if I'm understanding correctly, you're saying that you pick up some revenue because you're doing some other things that maybe you weren't doing before but is it also this sort of agreement positive for margin mix as well?

It's not much a margin issue as it is it allows us to start planning, I guess it affects margins where you start having the service crews, you have a more reliable predictable stream knowing what you have to do because you're responsible for a bigger group of assets. It allows you to time out that work a little bit better and have a little more visibility kind of like a backlog driven business if you will and so it probably helps the efficiency of our service group. s Chris Weltzer – Robert Baird: Yeah, no that's very helpful. Thank you guys

Thank you very much. Continuing on our next question comes from the line of a Scott Blumenthal of Emerald Advisors. Please go ahead sir. Scott Blumenthal – Emerald Advisors: Good morning Bob and Andy.

Good morning Scott Scott Blumenthal – Emerald Advisors: I'm going to try and fill in some of the weight space from some of the previous questions. Can you talk about the kind of the evolution of products in the auto business? For example I know that a large portion of the minivans that are being sold nowadays have gate actuators and sliding door actuators. Just the evolution and characterize how that is going to kind of help you both here in North America in your European business.

Sure. I mean if you look at the evolution of convertible tops the whole world was basically either manual or electric actuation in the 80's and early 90's. By about mid 90's ourselves and (inaudible), I'm not sure exactly who came up with the first hydraulic system but we started moving into hydraulics from electric actuation. And what hydraulics did is they really did a better job of keeping the roof consistently going up and down, from side to side not having jammed things, not having electric motors that get a little out of sync. And the market very aggressively went to hydraulics. We went from there to the retractable hardtop roofs which needed more hydraulic cylinders, a more complete sophisticated system where you had to sense where various parts of the roof are. And we started getting into latching. So latching was an extension of that product line and we bought a business called CPF and started getting into latching as part of the system. What's happened more recently now is people are looking at hydraulics to do the lift gate and again electric actuation dominates that market today. Most of the minivans and SUVS that you have lift gate actuation are doing that in an electric fashion. Two problems with that though and the first is the same as convertible, the weight of these roofs is a big issue. The second is a unique technology we've brought in that helps the NI pinch point. If the lift gate is sensing that there's something in the way we reverse the motor and the fluid and like a garage door reverse the thing. In electric actuation, that's more problematic to deal with. They deal with it with sensors along the strips and sensors in cold weather freeze up and you never know that until somebody's hand is in the way. So this is a kind of a unique technology. It probably isn't going to be accepted by every customer, I think it will take a while for that to happen but a number of high end safety conscious people are going this way. Volvo, for example has gone this way. A number of things going on with Daimler Chrysler in this way. So that's the evolution that you're describing. We have not done any sliding doors yet, not a lot of weight to a door sliding, I don't know if that technology would move that way.

The lift gates, that when you look forward on this, and I talked about earlier the question are growth and automotive. Some of the growth that we expect to see later this year and next couple of years definitely is increases in these lift gate actuation and a lot of it is beyond the vans, is also, some is cars and some of it is SUV type vehicles.

Right and obviously a big convertible top model is 50,000 units. You start getting into lift gate; you’re talking about much, much higher volumes. And that clearly is something that will drive; a few programs can drive quite higher incremental growths than a convertible. Scott Blumenthal – Emerald Advisors: Yeah, it would appear to me that that’s becoming more and more standard in many vehicles, so that could be an opportunity here, over the next few years.

Scott Blumenthal – Emerald Advisors: And, sticking with the auto theme, or I guess the truck theme, can you talk about how some of your truck customers are trying to get ahead of the next, I guess 2010 we’re going to have a new emissions standard for truck engines.

A lot of what we’ve been working on within our Gits business, for last year and certainly this year, is focused on the development of those new platforms. We’ve picked up a couple of small wins, that we haven’t really publicly announced, because they’re not big ones yet, but some of the larger opportunities we’re working on, we hope to talk more about in the next year or so. But that clearly is part of the growth opportunity that we’ve been talking about with our Gits business, which, even though we’re in a trailing 12-month period here, where our sales are down 30% from a year ago, this is a business we’re saying we’re going to see a doubling, going from 40 million or so up to 100 million by 2010, 2011, for the very same thing. So we are working with a number of customers, potential customers, both here and in Europe on that. We remain very bullish on that market and of our prospects as well.

Thank you sir. Continuing on, our next question comes from the line of Tom Brinkmann of BMO Capital Markets. Please go ahead sir, your line is now open. Tom Brinkmann – BMO Capital Markets: Good morning, most of my questions have been answered, but I do have a few more things for you. First of all, good quarter. Just wanted to ask if you break down the core sales growth in the industrial segment into Enerpac and then Hydratight.

Yeah, it was about 11% core in each of them, it was even between the two segments. 11 and 11. Or between the two product lines in the segment. Tom Brinkmann – BMO Capital Markets: Okay. And also, I was just curious about this quarter’s sales for the Gardner Bender, at the big batch retailers. You talked about the outlook going forward, but can you just comment on how they were historically here this quarter?

That would be within our North American electrical business that we said was up 3 or 4% this quarter, so that essentially is Gardner Bender. Tom Brinkmann – BMO Capital Markets: Okay.

Tom Brinkmann – BMO Capital Markets: Okay, that’s definitely good news. And then, as far as the actuation systems segment goes, how much was the Gits business down in this quarter, and then how does that compare to your expectations for the quarter?

It was in line with our expectations that I just mentioned on the prior question. We’ve been down 30-35% for the last year or so, since, the last full-length three, four quarters here it was pretty much in line with that. I would say it was in line with our expectations.

But again, the reason for that big decline, or a big chunk of that reason for the decline, was the pre-buy last year. You know you had that change-out those engines by December, so our first quarter and our second quarter will feel the worst of that comparison. Tom Brinkmann – BMO Capital Markets: Okay, then I have additional questions. I’ll just get back in queue for that though.

Alright, thanks Tom.

Thank you. And our next question comes from the line of Steven Fisher from UBS. Please go ahead, sir, your line is open. Steven Fisher – UBS: Hi, good morning. It sounds like Hydratight’s got to have one of the best outlooks in your portfolio. Do you think there’s still M&A opportunities in that business?

Yeah, the answer to both questions is yes. The out look is quite strong, for the reasons we’ve talked about already. From a M&A point of view, we also have, of the funnel of activity I talked about, I would say probably Hydratight has the most opportunities in the total funnel. That doesn’t mean things are going to close next quarter, but there’s just a lot of ideas there. Part of that is the guy who’s in charge of that segment, Brian Kobylinski, used to be our M&A leader. So he’s very equipped at working on the internal grassroots efforts of trying to find acquisitions that tuck in there. But there’s a lot to do there, and it’s just how broad you want to define joint integrity.

It’s really two different prongs. One is just building up geographically what our opportunities are where, building out our platform, our capabilities, and secondly, what other type of services or product can we add to, right alongside of our current product offering.

There’s a lot of areas we haven’t touched. As Andy said, geographically, we’ve got more of an internal growth going on in China, but there’s other parts of the world we would probably do acquisitions to get our growth. Nuclear is an area we’re very excited about, there’s more we could do there. We got a taste of that with the Ricci acquisition, who does quite a bit of machining in there, and that’s exciting. Deepsea, subsea, offshore, lots of different technologies going in, the business you saw last year where we had Inject-A-Seal, and Morgrip, which is one that came with Hydratight, both focus on things that emergency repairs and lots to do in emergency areas. Billing out the service crews is an area where you can buy some companies that focus on that service. We’ve done that with a couple of acquisitions, and that’s a fast way to get, you just then have a heavy douse of training, and boom, you can start selling additional services. So there’s tons to work on in that segment. And obviously, the markets are pretty robust right now. Steven Fisher – UBS: Would you say that’s higher on your priority list, relative to other areas of M&A?

We love all our areas, but probably industrial would be the one we love the most. Steven Fisher – UBS: Got it. And then just to clarify on the Professional Electrical, have you already started to see the reversal on some of those OEM ordering patterns, or would you expect it to improve later in the quarter, I know we’re still early here.

That’s probably too granular of a question for us to answer. Steven Fisher – UBS: Okay. I’m just thinking to get back to the strong double digit growth that you had in Professional Electrical within the last few quarters.

We’re not anticipating that for the year. Part of that growth, as we mentioned last year, was pricing, and I think we’ve anniversaried that, and part of that transformer business does get [resy ph] in some form or fashion, and that growth rate will not be in double digits, it will be single digit growth going forward. Steven Fisher – UBS: Okay, great, thanks a lot. Thank you sir. At this time, Mr. Arzbaecher, I’ll turn the presentation back to you once again for your concluding remarks. Thank you sir.

Great. Well, thank you operator, and thank all you participants for observing our call today. We’re obviously excited about our first quarter and the prospects for a record 2008. Andy, Karen and myself are here for the balance of the week to answer any follow-up questions you have. If we don’t talk to you, please have a safe and a happy holiday season. Look forward to the continued prosperity in 2008 for our investors. Thank you, and good bye.

Thank you, sir. Ladies and gentlemen, that does conclude the conference call for today. We thank you all for your participation, and ask that you please disconnect. Thank you once again, have a great day, and a wonderful holiday.