Willard Oberton – President & CEO Daniel Florness – Executive VP & CFO Nick Lundquist – Executive VP & COO Nick Holden – Company Representative

Michael Cox - Piper Jaffray David Manthey - Robert W. Baird & Company Adam Uhlman - Cleveland Research Company Holden Lewis - BB&T Capital Markets Michael Hamilton - RBC Capital Markets John Baliotti - FTN Midwest Securities Zachary Kleinhandler – Forest Capital Management

Good day everyone and welcome to the Fastenal Company 2008 quarter one earnings conference call. This call is being hosted by Mr. Will Oberton, Chief Executive Officer and Mr. Dan Florness, Chief Financial Officer. The call will last up to 50 minutes. The call will start with a general overview by our Fastenal hosts Mr. Oberton and Mr. Florness; the remainder of the time will be open for questions and answers. As a reminder certain statements contained in this presentation that are not historical facts are forward-looking statements and their best perspective. These forward-looking statements are subject to risks and uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. More information regarding such risks can be found in Fastenal’s Quarterly and Annual SEC filings. And as a reminder this call is being recorded. At this time I’d like to turn the call over to Mr. Will Oberton; please go ahead sir.

Thank everybody for joining us today. If you’ve seen our numbers you have seen that we had a good quarter; first quarter came in very well for Fastenal, sales growth of 15.8% and I think for us the most impressive thing was our margin growth of 16.9%. With Good Friday in there we weren’t expecting to do quite so well but I think it’s really a testament of our sales program, what we’re doing with the outside sales program. March is the month of our Bounty Hunter sales promotion but that’s a promotion we’ve been running for about four years now so year-over-year it’s the same promotional out of the same products. It went a little better this year than it has in the past but we really think that was due to the outside sales initiative that we started. We had a lot of people out pounding on a lot of doors and ended up with some very strong results in March. One other point I’d like to make is there was really nothing unusual in the month as far as large sales or one-time events. We have to have some questions on that. But it was pretty much business as usual; just a little higher daily sales rate. All ages of stores grew well. Our large older stores grew at 9.9%. I was a little disappointed, we were looking at it, I was thinking, “we’re going to hit ten.” We were very close but double-digits would have been nice. But it is the best growth in the large stores we’ve had since all the way back in August of 2006; so good growth in the older stores. Probably shows that the US economy at least that we deal in is still chugging along fairly well. We haven’t seen a lot of change since probably the beginning of 2007 when we look at what’s going out there. We believe the improvement is really more due to execution than economic environment. At this point we’re working a little harder and hopefully working a little smarter. Geographically there was really nothing unusual. Most of the country did very well. On a very positive note though, we saw nice improvement out of the West Coast and Florida; two areas that I’ve mentioned on both of the last conference calls that have been holding us back. Both of them are smaller areas for us because they’re newer for the company but the West Coast was just shy of goal and Florida showed very nice growth for the first—actually the best growth they’ve shown in I think about 16 to 18 months. So I don’t know if that’s somewhat probably economic and also again execution. Some of the changes we made with management and a focus on those areas and we’re seeing some nice developments there. The margin, we did a nice job on the margin and I know there are several initiatives that have really been improving our margin. We had nice improvement in margin in the fourth quarter and then we continued on that program. The things I would say that have probably made the biggest year-over-year difference in our margin, the first one is our Indianapolis expansion project. We are identifying more and more parts that are sold every day in our stores that in the past we all purchased by the stores and in many cases at a higher price with freight involved and we’ve been putting them on the shelf. That project is going extremely well. It continues to grow much faster than the company the product being shipped out of that facility. That really helps our margin. Another part that we’ve done a better job of—another piece that we’ve done a better job of as a company is working to develop better systems to implement price increases when we need to; really monitor better. We’ve been working on this for quite some time. Some of our improvement in the fourth quarter was due to that and again improvement in the first quarter where we identify—we’re gleaning through the customer information. One of the challenges that we have in identifying low margins and things like that is we’re very decentralized. We don’t want to set all the rules here in Winona. We want to give our store people a lot of discretion and pricing to the market, understanding the market. But at the same time we need to have good systems identify opportunities and we also have to identify sales that just don’t make sense to us. So we’ve done a much better job of developing systems to monitor our pricing. And that really leads to what I think is the biggest reason for our margin improvement and that’s really about bringing better discipline on low-margin, unprofitable sales. Early in 2007 we really started working on this. I spent a lot of time on it myself identifying from all different angles. One is we started with customers saying what business makes sense to us and what doesn’t. Based on a lot of things how much work do we do bin-stocking, freight, is it a standard item. We have a lot of criteria that we sort through. Because a low margin on one sale may be very profitable—or one sale at low margin might be quite profitable, other sales may be very unprofitable so we had to get more sophisticated in how we looked at it. Then we started bringing more to the discipline to the process and then really just putting in minimums for different types of products and that’s been—in a very decentralized world that Fastenal lives in, its been kind of throw the gloves off and fight your way through it for the last 12 months but we’re starting to get a lot of traction. One example that I’d like to use, a product that I’ve been watching very close for about the last nine months, is our power tool business. About 2% of our revenue is generated by power tools, Bosch, DeWalt, and Metabo; companies like that. And that’s traditionally our lowest margin product line and it’s because we’re competing against the big boxes and it’s just generally a lower margin product line. We sell it because it also drives accessory sales which are higher margin products and our customers need those. In April, May timeframe I got together with our team and a lot of our guys led it actually, and we brought in some new discipline and what we really decided is that we were going to quit chasing the internet sales. You can always find a better price from Amazon or somewhere on eBay, and we said, “You know what? We’re going to put in competitive pricing. We’re going to stick to our model. And we’re going to walk away from some business.” It wasn’t a real popular decision throughout the company. We had people saying I was crazy or we were crazy but we stuck to it anyway. For the last six months of 2007 our power tool sales only grew less than 1%. That’s about a $20 million piece of business over that six-month period and grew it at 6/10 of a percent. But our gross margin on those products grew 32.5%. So we didn’t grow the business but we culled out of that a lot of [sales] that just didn’t make any sense to us and so we had very nice growth on the gross margin and now we’re starting in the first quarter, we’re starting to see the growth come back into the power tools. So if we can maintain the gross margin and grow the business, we’re just basically lost year of sales growth but we gained a lot of profitability and we’re making more sense out of the business. That’s an example of one big product line but we’ve been doing that with the small product lines. We’ve been doing that looking at customer segments and with all of this hard work, we’ve made a lot more sense. We’re rationalizing some of that business. That is the biggest change in our year-over-year margin that we can see, is just not raising prices across the board. It’s looking at each order and trying to make sense; does that work for us and bringing discipline to the sale. One other thing I’d like to touch on on the margin is the—we have been seeing inflation in our product and most of the inflation is really limited to the steel fasteners that we bring in from Asia—for the most part limited to steel fasteners that we’ve brought in from Asia. And the biggest increase has been in the low carbon, the lower cost per pound fasteners mainly coming from Taiwan and China and those prices—since about the first of October, those products have gone up anywhere from 8% to more than 20% with the average being probably in the mid-teens. Now that product only makes up about 15% to 20% of our cost of goods so when you net it down it adds about 1.5% to 2% to our overall cost of goods. That we’ve been working very hard to pass through. We raised our wholesale price on these products. That’s our printed fastener price or price on those fastener products March 1st and so we sent that out. The way the process works is the small customer walks in the door, will probably get the higher price the first day they walk in; March 1st. The medium customer usually has a 30-60 day notice that we would contact them and say you know in 60 days, I’m going to raise your price, really out of respect and respect for their business. And the large customers doing $200,000 to $1 million a month is more on a probably three to six month program; sometimes as far out as the end of the year or the end of the one-year contract depending on where that started. So it’s a long linear process of price increases and we’ll continue to see a little of incremental gain on that as we go forward. But at the same time, our costs will move up from the bottom. Now when you think about the products I’m talking about, these are our slowest turning products; less than two turns per year because they’re coming in from Asia. So it’s very hard to map it out but if you just picture the products starting to come in and we start purchasing it; we purchase it between October and March and it comes in an sells through six to seven months after that and the price increases will probably flow at about that same rate. So we may see a little incremental gain in the margin upfront but generally it’s more of just mapping together where the cost goes up and the price goes up at the same time over a long period of time. Last thing I’m going to touch on and then I’m going to turn it over to Dan is the progress on our ‘pathway to profit’. I guess the way I would say it is the arrows are all pointed in the right direction. The things that we talked about when we rolled this out in April of last year were store openings; our store openings are on track. We had planned I believe to open 60 stores and we opened in the mid-50s; pretty nice job by our folks. Our sales program is progressing very well. Nick Lundquist, Lee [Hein] went out and met with all their sales people the same way that I did last year. They’re saying, “Hey it’s just getting better Will. These guys are fired up, they’re out there selling.” We have a long ways to go in developing that program but we’ve come a long ways in the last year. Our average store size grew just like we said it would; a little lower than we thought because our top-line revenue is only in the 15s, we hope to get it into the 20s over a period of time and then we’ll even get greater growth per store site. Better return on assets, higher profit, lower inventory, better return and we exceeded our pre-tax goal that we had stated of 1% year-over-year so as I said I think everything is lined up. If you looked at our earnings release we also put some more information in there that shows how it rolls out. Dan is going to talk a little bit more about that. But I think if you spend time looking at that and just look at the percentages and the age of stores, it will start making sense to you what we’re trying to accomplish with our ‘pathway to profit’. With that I thank you and I’ll turn it over to Dan and I’ll be back for questions in a few minutes.

Thank you Will. There are four primary points I’m going to touch on and a few other items of note I’ll add on towards the tail end and they really center on these four things; gross margin, ‘pathway to profit’, some discussion on our operating expenses and a few points of note on our balance sheet. First off as it relates to gross margin I think Will touched on it well when he started his conversation with talking about discipline. Nick and Lee and Steve, when I look at working with their 17 regional VPs around North America, actually around the globe, have done a really nice job of instilling discipline into the process to really go after it more with a scalpel than with a dial. And go after the business where we can either look at it and say, “Challenge this business, can we improve it? Or of some of it, are we willing to give up some business.” And yes, there is some business that we’ve given up and yet we’re able to put up a very attractive growth number for each of the months as well as the quarter. As Will mentioned some inflation benefits, however when I look at that in the context of the quarter versus other quarters that’s a relatively nominal figure. When I look at the piece about being able to give up some business I think the two examples are very good case-in-point. And then finally the fuel, I probably put more in the release than normal on fuel because I think it’s a very important detail for our shareholder base to understand both from the standpoint of impact and magnitude. From a gross margin standpoint the impact was fairly nominal, which I really credit to our distribution folks of being creative on how we move product and how we can manage other aspects of costs because the 30% plus increase we saw in both gasoline and diesel, that’s a very much uncontrollable thing. But what we can control is how we maneuver around those costs. And I’ll close the gross margin by throwing it out one more time, it’s really about discipline and how we price and go after business. The second item on ‘pathway to profit’, you know probably the biggest thing I think the information is fairly self-explanatory but one thing I’d like to emphasize and I’ll emphasize on every call when we cover this, its really about morphing the mix of our stores over time. If I look at the March 31, 2007 data, you would see that about 53% of our stores are in the first two categories; either the zero to $30,000 a month group or the $30,000 to $60,000 a month group. And the other 47% is in the upper three, the more mature groups of stores where we really drive our profitability. That mix in the last 12 months has split to now its 50-50; half our stores are in the first two categories, half in the last three. And probably an easier way to think about is we basically took 40 stores out of the first group and put 40 stores into the—and 30-some stores into the top group and the stuff in the middle just shuffled a little bit. As I look at that over the five-year period of our ‘pathway to profit’ going up to 2012, we’re opening about 40% fewer stores a year. So I would naturally look for the first two categories to move down about 40%--when I look at that number five years from now, naturally and so that 50% in the first two categories I believe moves down closer to 30 such that the last three categories, the real profit engines of the organization are at about 70% of our store base. Now that’s a natural progression if you ignore the impact of adding additional outside sales and pushing that faster and growing the groups into the larger categories a little bit faster, I really believe five years from now that we’ll have about 25% of our stores in the first two categories and about 75% in the last three. You look at that based on opening 8% new stores a year and you get a feel both in the change morph and the number of stores we’ll have in each of those respective categories looking out five year. In the operating sense category, again a simple way to look at our operating expenses is about 65% to 70% of the dollars in that number is related to payroll. We did not enjoy leverage on that cost this quarter and the—I really looked at it when I start looking at the components of the cost, our base and hourly costs did leverage in the quarter. What didn’t leverage was our commission and bonus payouts and those are really more centered on the store side of it where we did a very nice job of raising our gross margin and were able to improve that and its about gross profit dollar increases and how we leveraged relative to that. The second component of our operating expenses is occupancy; it’s about 20% of our dollars. I’m pleased to say and I haven’t been able to say this since about 2000, we did leverage our occupancy expenses this quarter and I would expect us to continue to enjoy that going into the future and again really predicated on the fact we’re opening 8% stores and we’re able to move that needle down from about 6% of sales, what it is today, down one or two percentage points over the next five years. That’s our internal goal. The third category, all the remaining items, the biggest individual component in that is store fleet and again the fuel prices did beat that expense up a little bit and we’ll see how that plays out as we go through the year. I put some information in the release as well about where our fuel costs are running. Finally on the balance sheet, from a working capital standpoint accounts receivable we continued to eek out modest improvements in that. We’re in the third year now of our call center and so that the numbers we’re going after are getting more challenging but I’m pleased to say we’re still seeing incremental improvements in our accounts receivable. On inventory, extremely pleased with the execution at the store, district and region level as well as our distribution centers on managing inventory growth to about 10.8% year-over-year versus our sales growth for the same period. Finally on fixed assets as I’d mentioned in the Annual Report last year, there are some significant capital expenditures going on in 2008 and they really center on four items. One is the replacement of our Dallas distribution center which is occurring currently. Some of the construction on that was delayed in 2007 into 2008 because of bad weather; so significant dollars being spent there currently. Indianapolis and there’s really two pieces to that, we purchased some adjoining property to our distribution center down there in the first quarter and on a portion of that adjoining property we are in the process of expanding our distribution center as we speak. And then the final piece is our Cold Heading division in Rockford, Illinois, we purchased a new 100,000 square-foot facility in the first few months of this year and plan to be into that mid-summer of 2008. A few other items I wanted to mention, it’s interesting we start looking at different components of your business, what you can do to affect numbers. Very pleased to look at—if I ignore our US and Canada business for a second and look at our other foreign business, our profits there—those are relatively new operations. Our profits are fairly nominal. In fact they were marginally profitable as a group in the first quarter of 2007. Our profits in that group improved by $1 million from first quarter of 2007 to first quarter of 2008 and I really credit it to the people that we’ve put in—when I look at our new leadership in Mexico, our new leadership in the other foreign operations, really doing a nice job to stimulate the profitability and the growth of that business. And then one other item I wanted to make note of next Tuesday at 10:00 am Central time we are going to be hosting our Annual Meeting here in Winona, Minnesota and invite those of you that can make it to please attend. If you can’t please listen to it over the internet; we will be webcasting it. Two things I’d highlight, two of our senior regional VPs are going to be in and speaking at the Annual Meeting this year. Randy Miller who is our VP of our Indianapolis business unit’ he’s going to focus on talking about the role of store manager. Ken [Manse] who is our regional VP down in our Dallas region, he’s going to be talking about the role of our outside sales personnel within the organization. I think those two discussions are really important for both our shareholders to hear as well as our employees at Fastenal because it really helps to understand what’s driving the organization and those two roles are key to our success. With that I’ll turn it back to the moderator and we’ll start the Q&A and again I do want to thank everybody for taking time this morning to listen to our conference call.

Your first question comes from Michael Cox - Piper Jaffray Michael Cox - Piper Jaffray: Congratulations on a great quarter. My question is on the goals towards the 100 basis points of operating margin expansion for the full year, you’re off to a very good start here through the first quarter. I was just curious how you feel about that now, three months into the year and what level of sales growth would be required to reach that goal as you see it today?

As I see it today Mike, if we can maintain the level of sales growth that we have that 15%, maybe a little more than 15%, right around 15% we can make that happen and really it’s going to be driven by our real good job on support labor and also we think that most of—I don’t know how much of the margin will remain but we’re going to have a strong margin relative to where we have been over the last couple of years. So at 15% to 16% sales growth we should be able to get our 100 basis points for the year. Michael Cox - Piper Jaffray: That’s great thanks a lot.

Your next question comes from David Manthey - Robert W. Baird & Company David Manthey – Robert W. Baird & Company: I wonder if you could talk a little bit about other things in the gross profit, that was really a great number and I’m wondering you talked a little bit about mix and inventory type gains in terms of pricing. I think you mentioned that a little bit Will, rebates, any other factors in there? And then last quarter Will you had mentioned that you thought the 51 and change type level was sustainable based on what you said, it sounds like a lot of the changes that have been made are also sustainable so is the 52 to 53 level the new plateau here?

I’m not sure if it’s the new plateau but I’ve been talking 52% for a long time, the last two or three years, saying that I think those numbers—really what I’ve been saying is the margin of old has not gone forever and that’s what we used to run at; 52% or 53%. Our goal and what we’ve stated is we’re going to be 51% or above is what we said last year; we still think we can do that and probably even higher than that. I don’t want to paint myself into a corner and everyone expect 53% next quarter because you’re the first one that has said that Dave. But as far as the mix goes, there’s nothing unusual with the rebates at all. Product mix is very similar; nothing has changed there. We are working hard internally to push our people to sell fasteners and the more profitable products because that’s how we pay them. As far as inventory going through and that, nothing has really changed in that. Understand that our fastener pricing was slowly moving up last year. Its not like just the light went on everything took a big jump. It was a lot of little pieces coming together and a lot of it is sustainable.

A couple of things I’d add in, if you look at what we’re doing on working capital standpoint managing our inventory, if I look at our rebate number its actually a slight negative over last year. And so and it’s really about we’re doing such a good job managing our spend; it hurts just a little bit on some of those avenues. If I look at what concerns me and what makes me optimistic looking out three, six, nine months, probably the biggest thing that concerns me is what’s going on with fuel. When I look at just intuitively, there’s two types of fuel that are predominately used; diesel and unleaded gasoline. Diesel has a lot less ability to move consumption-wise. I’m a farm kid and I know in the spring there’s a certain amount of diesel that’s going into a tractor that’s putting crops in. That hasn’t changed based on the price. When I look at our distribution fleet and I look at the trucking fleet, generally speaking nationally, if the miles are driven fuel is being consumed and the ability to manage that is a different animal. Gasoline is a little different animal and so when I look out to the three and nine month horizon, everybody has said when it hits $3 there’s going to be changes in demand. Everybody said when it hits $2.50 there’s going to be changes in demand. As fuel prices are well—gasoline are well north of $3; that has to start having an influence on consumer consumption. The only item I’d throw in there when I look at looking out, the big piece of it and we probably said it four or five times, is about discipline and that is sustainable.

In the last three months I’ve had the opportunity to travel and visit with all of my outside sales people in our Eastern business unit, in meeting settings as well as all the branch managers and there’s been a lot of enthusiasm out there and I also believe that with our outside sales program, our level of service to the customer is actually increasing. We’re getting more touches with the customer. Not necessarily our large big strategic customers but with the other than our medium and small customers and I believe our service level is increasing and it’s having a positive impact on our margins as well. David Manthey – Robert W. Baird & Company: Thanks and congratulations.

Your next question comes from Adam Uhlman - Cleveland Research Company Adam Uhlman - Cleveland Research Company: Dan could you quantify how much pricing impacted revenue growth in the quarter and also how that impacted the March daily sales rate and then kind of related to that what kind of trends you’re seeing so far here into April in terms of revenue growth?

On the part about inflation I’d say we’re looking at somewhere in the 2.5% to 3% inflation neighborhood.

Almost all of that is narrowed down into that small group, the core fastener group.

Yes, and so when I look at the March timeframe, it isn’t a case of that really changed dramatically from what we were seeing in January or February. I mean could it have been [inaudible] to half a point, maybe. But the change is fairly nominal. On the question about April, in January Will and I talked a little bit about what we were seeing in January trends and that at least was deep into the month and the day after we did it, I think both Will and I looked at each other and said, “You know, let’s just shut up about the current month.” because things can change and you hate to set a false hope.

And we had a lousy day that Friday sales day and I thought I jinxed it.

But it’s the 11th of April and so any trends we have are pretty meaningless at this point. Adam Uhlman - Cleveland Research Company: Okay thanks.

Your next question comes from Holden Lewis - BB&T Capital Markets Holden Lewis - BB&T Capital Markets: Can you address the pathway to growth initiative obviously is heavy on hiring people upfront and new people aren’t known to necessarily have an immediate impact from a profit standpoint, can you address the degree to which you think that your pathway initiative is currently impacting the margin in a favorable way, or a negative way and if its less of a positive at the margin line, can you give a sense of when you expect that crossover to take place?

You mean the operating margin line? Holden Lewis - BB&T Capital Markets: Right, I mean when you hire a new person typically they may start to generate some revenues but I mean it takes a while for them to actually be a net positive to the margin and since you’ve sort of been ramping the hiring recently are the new people that you’ve added to pathway to profit, are they a net positive to this margin that you’re seeing or are they still a bit of a drag or where are we in sort of the evolution of the margin of pathway?

I believe it’s relatively neutral but one thing that’s very important is that we are working very hard to continue to staff our stores with more part-timers so that they become better educated in our business model before we hire them to come full-time outside sales. We have really ramped up our outside sales people to help our part-time people, to help our outside sales people go make sales calls. At the same time they’re learning the business and that’s really where we’re trying to pull the majority of our pool of outside sales people from and that’s our part-timers. So I think it’s pretty neutral but I don’t believe it’s a drag. I think the way we’re setting it up is actually going to help the business.

And I think if you compare it to the old growth initiative the additional sales people are costing us no more than the rent that we saved on those buildings and those sales people probably gaining us more than the brick and mortar would have at the same cost. So the new strategy is probably incrementally positive but the person-for-person; they’re barely paying for themselves after 12 months. Holden Lewis - BB&T Capital Markets: Okay.

Your next question comes from Michael Hamilton - RBC Capital Markets Michael Hamilton – RBC Capital Markets: I was just wondering if you could spend a little bit of time on what some of your larger customers are doing and talking about as they look at some of the fairly stiff inflation and price increases that are likely to roll through over the next year. How do you expect them to respond?

I actually met with one of our top five customers last week on a sales call, and they’re responding—they’re throwing the door up on us but one of the good things, if it’s a positive, is that the steel guys always beat us to the door because we have a lot more inventory in the pipeline than the steel manufacturers so we’re never the first one there with the price increase. And typically they’ll spend at least ten times on steel that they would on fasteners. Although they still don’t want the price increases. With the biggest customers it’s a long process. Like I said in many cases we’ll have a CRU index put in and we’ll have to wait it out. They understand our inventory turns, they monitor our financials and they say we know when it started up, we know when the stuff is coming through, we know when we’ll accept the price increase and we work through it. As long as we can maintain our profitability we understand their demands or the pressures they have and we work through it. But most of them are reasonable and they know that the service we offer they don’t want to lose because there is a line in the sand. If we do not make money on the business the saying we have is “we don’t do it for the sales, we do it for the profit.” And so if they absolutely refuse the price increases at some point we will walk from the business. These companies are smart, they realize that other people aren’t going to do it for a loss either and if we’re one of the best distributors out there, which we believe we are, we should be able to pass these through and its all a matter of time and inventory and getting the price up before the new inventory is in. Or sometimes we’ll give up a little and it’s a little wavy as it goes through. I’ve been actually in touch with probably four of our top ten customers and they know its coming and nobody is happy about it. On the other hand, most of them seem pretty positive about business. In fact the one I was with last week, one of the owners of a large private company took me aside to see what I was seeing. He said, “You know, our business is okay.” It was kind of a knock-on-wood conversation. He was surprised. I said, “Hey our business is pretty good.” I couldn’t say much because it was after the quarter and he said, “Ours is also doing pretty good.” And either one of us quite knew why. Michael Hamilton - RBC Capital Markets: Well I’ll say what everybody else has said, congratulations on a fabulous execution.

Your next question comes from John Baliotti - FTN Midwest Securities John Baliotti – FTN Midwest Securities: I think the, at least from the survey that I’ve seen and probably to your benefit as well that prices generally not the highest criteria for, service seems to be a higher criteria for customers so but I’m wondering on the—as pricing on the steel and the raw materials stays up it seems like you’re able to more than offset that and with respect to where the gross margin is today, are you feeling that you’ve got control of that sort of that 52% level you’re at now if let’s say the global demand for steel subsides a bit and that raw material price comes down, how do you feel about cost of inventory with respect to pricing? I know you’ll probably benefit on the fuel side because there might be some related pullback in the cost of fuel but I’m just—in the terms of that mix how do you feel about if we start to see raw materials start to moderate or actually decline?

What will happen is the big customers will start pushing us right away for lower pricing of course but we’ll go back and say, “Remember that six month inventory lag?” Well we get to wait so the true change is to the other foot and you work it through it and you get back the price increases over time. So from a margin standpoint I’m not worried about that but it would hurt our top-line revenue as it went through. But on the positive side, the bottom half of our customers are—numbers that you know the thousands of small customers, most of what we pass through in the higher prices will stick because its small orders and a lot of that so we’ll exactly expand our margin with that group of customers, over time compress the margin a little bit with the larger customers. At the end of the day we’ll probably have an incremental gain because there’s been a new higher price level established. Just like if oil drops, there’s a whole new level there’s a new mind set and people aren’t looking at this as close. So as long as it doesn’t come real fast I think we’re fine and looking at the world market and looking what we see, we don’t see a real quick decline unless there’s a really slow international world economic slowdown because of the ore pricing is already guaranteed through—Asia and ore price are—pricing getting sent to Asia has already been contracted for several months. John Baliotti – FTN Midwest Securities: Right so in terms of the gross margin you said that pricing helped about 2.5% to 3% on the top-line, is that the similar impact on the gross margin or the other initiatives?

No, the gross margin wasn’t driven much at all by the pricing. The gross margin was driven by the initiatives and the real initiative is not about what we did it’s about what we didn’t do. What we didn’t do was chase unprofitable business. We’ve been under a lot of pressure for years to do top-line revenue growth and we’ve gotten a little sloppier and a little sloppier in taking business and trying to talk ourselves into it being profitable and Nick Lundquist, myself and Dan and a bunch of us got together and said you know what, sales are slow right now in 2007, let’s just clean this thing up and we worked really hard on it all of 2007. Every week I get a report that—actually I’m working between myself and the district managers and it’s an unprofitable list. Its business below a certain level and there’s different criteria and so I probably do 30, 40 emails a week between myself and just my little part of the project because I want to raise the awareness and it’s not like we went out and raised prices, we just brought the bottom up. And as Dan mentioned it has had a slight negative effect on our top-line revenue but the timing was good because we weren’t doing that well anyway.

Your next question comes from Zachary Kleinhandler – Forest Capital Management Zachary Kleinhandler – Forest Capital Management: I was just wondering for your P to P goals, most of the guidance you’ve given is at about 20% growth specifically on both sales per store and also on the pre-tax profit margin increase, do you have any guidance for below 20% growth what you would expect?

You mean on the 1% incremental gain? Zachary Kleinhandler – Forest Capital Management: Yes. What do you expect on the sales per store?

Well first it’s really not guidance it’s more laying out what our plan is. I want to make sure that we’re not saying that we’re guiding to that number. All of our planning to hit 1% growth in pre-tax profit over a five year period is done on 17.5% revenue growth. That’s the number that we worked with, that’s where we did all of our planning. We are investing to grow in sales people to grow our business at 20% over a cycle. That’s what our investment is and that’s hopefully if we can execute, we will get there—if we can execute we will get there and hopefully we can do that. So 17.5% right now is kind of the fulcrum point. I said earlier that we could do it at 15%, that’s because we haven’t been investing quite as heavily in sales people because of the lower revenue growth and our gross margin is up a little more than we had expected. We had not baked any gross margin gain into our plans. But with that we can lower the sales growth number. Did that answer your question? Zachary Kleinhandler – Forest Capital Management: It does and if I can just ask this one more quick question, the active account growth. You offer I know usually yearly, but do you have a quarterly number for that?

We are up in the mid-teens right now on year-over-year store growth of about 7% or 8% so we are in the mid-teens.

And then Nick and I talked a lot about this. We’re very happy with that because one of our concerns was slowing the store openings, was active account growth and actually our active account growth is growing faster than they were last year over the same period.

Very positive number and we look at that as taking market share simply by not just sales revenue but number of customers that are buying from us this year versus last year; mid-teens. Zachary Kleinhandler – Forest Capital Management: Thank you.

Gentlemen there are no further questions at this time; I’ll turn the call back over to you for any additional or closing remarks.

Once again I’d like to thank everybody for taking time to listen on our call today. Have a good weekend. Thank you.

Thanks a lot.