Thomas O’Brien – Chief Financial Officer William Rainville – Chairman and Chief Executive Officer Thomas O’Brien Edward J. Sindoni – Chief Operating Officer and Executive Vice President Jonathan W. Painter – Executive Vice President Eric T. Langevin – Executive Vice President

Walter Liptak – Barrington Research Associates, Inc. Claudia Shank Hueston – J.P. Morgan Securities Inc. – Equity Research Paul Mammola – Sidoti & Company, LLC.

Good morning. My name is Barbara, and I’ll be your conference operator today. At this time, I would like welcome everyone to the Kadant Inc. First Quarter Earnings Conference Call. (Operator Instructions) It’s now my pleasure to turn the floor over to your host, Mr. Thomas O’Brien, Chief Financial Officer. Sir, you may begin your conference. Thomas O’Brien: Thank you, Operator, and good morning, everyone, and welcome to Kadant’s First Quarter 2008 Earnings Call. With me on the call today is Bill Rainville, our Chairman and Chief Executive Officer. Before we begin, let me read the Safe Harbor statement. Various remarks that we may make today about Kadant’s future expectations, plans and prospects are forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Our actual results may differ materially from these forward-looking statements as a result of various important factors, including those discussed in our Annual Report on Form 10K for the fiscal year ended December 29th, 2007, which is on file with the SEC and is also available in the Investors section of our website at www.kadant.com under the heading SEC Filings. In addition any forward-looking statements we make on this call represent our views only as of today, but we may elect to update forward-looking statements at some point in the future. We specifically disclaim any obligation to do so even if our estimates change, and you should not rely on these forward-looking statements as representing our views on any date after today. During this call, we will refer to some non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with generally accepted accounting principles. A reconciliation of the non-GAAP. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is contained in our first quarter earnings press release issued yesterday, which is available in the Investors section of our website at www.kadant.com under the heading Recent News. So with that I will turn the call over to Bill Rainville, who will give you an update on Kadant’s business and future prospects. Following Bill’s remarks, I will give an overview of our financial results for the quarter, and we will then have a Q and A session. Bill?

Thank you, Tom. Good morning, everyone, and welcome to our call as we review Kadant’s First Quarter 2008 results and comment on the outlook for the rest of the year. I’ll start with the financial highlights of our continuing operations for our first quarter. Our revenues for Q1 were down 3% to $85.9 million due largely to a 9% decline in overstock preparation business, due to lower revenue in North America and China. On the other hand, our fluid handling business continues to do well, up 12% to $22.5 of revenue with particular strength in Europe, South America and Southeast Asia. Our operating income increased 2% to $7.6 million with a 14% increase in the paper-making system segment. Our EBITDA increased 3% to $9.4 million. Diluted EPS increased 9% to 36 cents. This compares to our guidance of 30 to 32 cents. Our bookings were $90 million for the quarter, an 11% decline from Q1 of last year. The decline is mainly the result of overstock preparation bookings in North American and China where some projects are being delayed by customers. Our backlog, however, remains very healthy with a 40% increase over Q1 last year to our record $119 million. Finally, we had another solid quarter cash flow from operations, which generated $6.3 million in Q1. Our net cash position is now $15.6 million. We also repurchased $12 million of our stock during the quarter. Now looking ahead for the rest of 2008. As we all know, the growth rate of the U.S. economy has slowed considerably, and we may well be in a recession in the U.S. Some economists have also projected reduced growth in Europe. Concerned about the health of the Western economies has also led to some caution on the part of Asian businesses that are dependent on exports to the West. That said, we continue to see strength in areas such as Russia, India and Eastern Europe. As much as we would like it to be otherwise, we have not eliminated the economic cycle, and we will continue to have periods of growth in the world economy followed by periods of retrenchment. I’ve been through a number of recessions during my tenure, and it’s during the tough times even more than the good times that I appreciate our business model. There are four major factors that benefit us in slower times. The first is our substantial consumables and parts business. Consumables and parts make up just under half of our sales and are fairly stable even during slowdowns. Second, our business is geographically diverse. Only about 40% of our sales are from the U.S. This means that we are not dependent on one part of the world, and typically, when one region is weak, another is adding capacity. Third, we have significant manufacturing capability in North America, Europe and Asia. As currencies and other factors change the relative manufacturing cost from region to region, we have increased flexibility to shift our production to the lowest cost region. Fourth, we have a strong balance sheet and access to capital, which allows us to take advantage of acquisition opportunities. In addition this slowdown, unlike many in the past, is marked by high commodity prices for items such as energy and fiber. We offer many products in our businesses from fluid handling systems to stock preparation, which save our customers money and energy and fiber expense. Higher energy and fiber cost increases the benefit to our customers from upgrading to our equipment. Overall, our strategy for maximizing our business remains the same and is particularly appropriate for the current business climate. Our strategy includes emphasizing products that provide our customers a good return on our investment in a high-cost environment. Also increasing our market penetration in areas where we have lower market share in accessories and water management products, such as China and Germany, continuing to focus on growth markets, such as China, Russia, Eastern Europe and India. Also continue to shift manufacturing and sourcing to lower-cost regions, seeking opportunities to ply our technology outside the paper industry and pursuing acquisition opportunities that complement our business. Let me touch on these strategies while I review our major markets. Let’s start with the outlook for North America and Europe. Many of our customers in North America and Europe are seeing reduced operating margins due to higher costs for energy and fiber. Several of our businesses, particularly fluid handling, are benefitting from this, as we have technology that helps in these areas. Kadant’s energy-efficient drying systems have seen strong growth over the last several years. Although the pace in the U.S. has slowed, demand in the rest of the world remains strong with sales up 12% worldwide and bookings up 11%. We continue to be optimistic about this product line. Our dryer management systems are instrumental in achieving energy savings in the dryer section, which is the part of the paper machine that consumes the most energy in paper production. Our stock preparation products help our customers increase the yield from recovered fiber, which reduces their fiber cost. Fiber is the highest-cost item for our customers constituting roughly 50% of their manufacturing costs. Prices for fiber, particularly OCC, have increased significantly, putting more pressure than ever on paper companies to improve their yield. For example, earlier this year a U.S. customer installed one of our fiber net screens, which could improve yields up to 1% per year. That may not sound like much, but for a 400-ton-per-day mill that’s four tons of clean fiber a day. With liner prices at $700 a ton, the payback can be compelling. In addition many customers elect to reduce their cost of fiber by going deeper into the waste stream. Deeper into the waste stream means dirtier waste. This requires more stock preparation equipment to separate the fiber from the contaminants. We also continue to emphasize aftermarket products that deliver good returns for our customers through energy or fiber savings. Despite the weakened economy, our aftermarket bookings and stock prep are up 10% in North America, due in part to this strategy. Aftermarket bookings of our accessories and water management product lines also saw modest growth in North America. The dramatic decline in the dollar has driven up energy costs for our U.S. customer, but it has also made them more competitive in the world market. I believe that our U.S.-based paper manufacturing customers have gained competitive advantage, particularly against European-based businesses as a consequence. In the end this will be positive news for the North American paper industry. Although Europe is hit with both an appreciated currency versus the dollar and higher energy costs, our businesses in Europe are doing quite well thanks in part to strong demand for our fluid handling products, as I mentioned earlier, as well as growth in Eastern Europe, Russia, India and the Middle East, which are served by European businesses. For example, in Q1 we received two stock prep orders of roughly a million Euros each from customers in the Middle East and India. Now, let’s turn to China, one of our most important markets. Although China’s economy continues to grow, our customers in China are affected by economic conditions in North America and Europe, as much of the paper production in China, particularly liner board, ends up as boxes that are shipped to the West carrying manufactured goods. This has caused some of our customers to defer their projects to later in the year. For example, the down payment for the $4 million pending order that we announced in March has been deferred from the Spring to the Fall of this year. In general projects are not getting canceled, and new manufacturing improvements—and new ones continue to come up, but the pace has slowed. Until there is a better visibility on demand, this has particularly affected our stock prep sales and bookings, which are most impacted by demand for liner board. Liner board is, by far, the largest paper grade in China and the one most impacted by exports to the West. Conversely, bookings of our fluid handling business, which is much less dependent on liner board, can come later in the capacity-expansion cycle, has grown 50% to $3.2 million. Part of our strategy to minimize impact of swings in capital investment is to build our spare parts and consumable business in China. Our spare parts and consumable business in China for both stock prep and accessories is much smaller than it is in other parts of the world. We believe we have a significant opportunity in this area. In Q1 we hired a senior executive to head up our stock prep aftermarket effort, and we are planning a major campaign for this year. We have already made good progress with aftermarket bookings almost tripling the $3 million in China. In conjunction with this we continue to expand our screen basket manufacturing facility in China with shipments more than doubling over Q1 of last year. We have a similar strategy with regard to our accessories and water management products in China. Historically, we have had very little market share for these products in China despite being the world’s leading supplier of this equipment. Last year we embarked on a major effort to introduce our products to this market, including establishing a local manufacturing base and training a local sales force. I am pleased to report that we have received an order for our first whitewater filter system in China along with a significant order for over 40 Doctor holders for two paper machines. Interest levels remain extremely high for these products in China. We’re also making steady progress manufacturing our stock preparation accessories and water management product lines in China. Manufacturing our products in China and other low-cost areas will help us serve the growing Asian market and improve our margins throughout the world. Our overall margin improvement of 280 basis points in Q1 is due in part to lower-cost manufacturing and sourcing. Before I leave China, I should point out that although we are projecting somewhat slower growth rates for capacity expansion, the production base has grown so much that the increase in absolute terms remains robust. Overall, China continues to be the most important growth market in the world for the paper industry. While it is difficult to predict performance levels for each year due to variability of large capital orders, the overall trend for China remains very positive. Kadant also has two additional areas of growth: expansion beyond the paper industry and acquisitions. We continue to look for opportunities to fire technology into non-paper markets, such as steel, textiles and food and beverage. For example, one of the world’s largest CNC machine builders recently purchased another 1,800 precision units from our fluid handling business. Similarly, we continue to explore potential acquisitions both within and outside of the paper industry. As I have said on earlier calls, one potential advantage of the recent turmoil in equity and credit markets is more reasonable valuations of businesses we could acquire. Let me now review our guidance for 2008. We continue to expect to achieve GAAP-diluted EPS of $1.85 to $1.90 from continuing operations for the year on revenues of $385 to 395 million. For the second quarter, we expect to report diluted EPS of 41 to 43 cents per share on revenues of $94 to $96 million. Now I’ll turn the call over to Tom for a more detailed review of the financials. Tom? Thomas O’Brien: Thank you, Bill. I’ll begin with our revenue performance. Consolidated revenues were $85.9 million in the first quarter of 2008, 3% lower than last year, including a 5% favorable effect from foreign exchange. To better compare the two periods, I should point out that last year’s first quarter revenues included $1.2 million from the casting products business, which we sold in April of 2007. So excluding the favorable effects of foreign exchange in 2008 as well the revenues from the casting products business in 2007, revenues decreased 7% in the first quarter of 2008 compared to last year. Looking at our revenue performance in general, and here I am excluding the favorable effects of foreign exchange, revenues decreased in our stock prep, accessories and water management product lines when compared to last year with the largest decrease both in absolute and percentage terms coming from stock prep. Our fluid handling revenues increased over the first quarter of 2007 largely due to a very strong and encouraging performance in Europe. Now let’s look a the revenues in more detail in each of these major product lines. Stock prep revenues were $36.3 million in the first quarter of 2008 down 9% from last year, including a 5% favorable effect from foreign exchange. Each of our three major stock prep operations were weaker than last year after excluding the favorable effects of foreign exchange. North American revenues decreased 20% compared to the first quarter of 2007. China decreased 11%, including a 3% favorable effect from currency gains. And our European business, although 11% higher than last year on a reported basis, was down by 3% after excluding a 14% favorable impact from currency. In general we are seeing some timing delays in capital project approvals in China where bookings were down 48% when compared to a near-record level last year. On the other hand, bookings were up 23% in our European operations, including a 17% favorable effect from currency in the first quarter compared to last year and prospects there remain promising. In addition the backlog in this product line is still at record levels. Revenues in our water management and accessories product lines were slightly higher than last year on a reported basis but slightly lower when we exclude the favorable effects of foreign exchange. In particular water management revenues were $8 million in the first quarter of 2008, an increase of 1% compared to the prior year, including a favorable effect of 3% from foreign exchange. Accessories revenues were $15.8 million in the first quarter of 2008, up 2% from last year, and included a 4% favorable effect from currency. Although we continue to make steady progress in one of our key strategic initiatives, that is to better penetrate largely untapped markets for our water management and accessories products, such as Germany and China, the growth in these areas has not yet been sufficient to overcome the headwinds of weaker markets in North America and Europe. In North America encouragingly we did see growth in both of these product lines in the United States, but it was offset by revenue declines in Canada where, as I’m sure many of you know, the paper industry has been significantly impacted by mill closures, machine shutdowns and general belt-tightening at many mills. Revenues in our fluid handling product line were 22.5 million in the first quarter of 2008 up 12% over last year including a 9% favorable effect from foreign exchange. Here we had somewhat mixed results amongst our major businesses in this product line. Europe had an exceptional performance of 30% including 14% from foreign currency. North America was up 37% including 22% from currency and our Southeast Asia business, all be it small, in absolute terms was up 52% including 20% from foreign exchange. Partly offsetting these increases was the decrease of 5% in the US which was due to lower revenues arriving from larger system projects. I should note that in general we still have record backlogged levels in this product line and we had near record bookings in the first quarter of 2008 as well fueled mainly by strong performances in Europe and China. Turning to our product gross margins. Consolidated product gross margins were 39.7% in the first quarter 2008, 280 basis points higher than last year. This improvement occurred almost entirely in our papermaking system segment where gross margins of 39.7% were up 270 basis points from the first quarter of 2007. The increase in our papermaking system segment was primarily due to higher margins and our stock price and water management product lines. In stock price margins were higher on larger system projects as we continue to focus worldwide on a number of fronts to lower manufacturing costs including sourcing more products from lower cost countries such as China and Mexico where we have significant operations. Margins in China were up due partly to higher revenues in our aftermarket products. Gross margin and water management increased compared to last year in each major component of this product line including capital and aftermarket products. Now let us look at our SG&A expenses for a moment. SG&A expenses were 25.4 million in the first quarter of 2008, up 1.9 million or 8% from last year. This increase includes 1.4 million or 6% on the unfavorable effect of foreign exchange. Also, the 2008 quarter includes 0.5 million of non-cash employee equity compensation expense which we did not incur in 2007. Excluding both the unfavorable effect of foreign exchange and the employee equity compensation expense, SG&A expenses in the first quarter of 2008 were essentially flat with last year. In the percentage of revenues, reported SG&A was 29.5% in the first quarter of 2008 up from last year’s 26.6% due to higher revenues last year. Go on to EPS results. We reported GAAP diluted earnings per share including the discontinued operation up 36 cents in the first quarter of 2008 compared to 30 cents in the first quarter of 2007. The discontinued operation reported breakeven results in the 2008 period compared to a loss of 3 cents in the 2007 period. So excluding the discontinued results income from continuing operations was 36 cents in the first quarter of 2008 compared to 33 cents in the first quarter of 2007 an improvement of 3 cents per diluted share. This improvement of 3 cents per diluted share includes increases of 2 cents due to the net favorable effects of foreign currency translation, 2 cents to lower net interest expense, 2 cents due to the gain in the disabled assets and 1 cent due to a slightly lower effective tax rate. Diluted EPS was lowered in the first quarter of 2008 by 2 cents due to an increase in non-cash employee equity compensation expense. These factors together account for a net increase of 5 cents in diluted EPS in the first quarter 2008 compared to last year. Now, turning to the balance sheet and our cash flows for a moment. We ended the first quarter with 58.5 million in cash and 42.9 million in debt leaving us with a net cash position that is cash less debt of 15.6 million. This net cash position represents approximately $1.09 per diluted share at quarter end. Our net cash decreased by 5.3 million compared to the end of 2007 largely due to significant purchases of our common stock during the quarter. In the first quarter of 2008 we purchased $12 million of our common stock representing 451,000 shares at an average purchase price of $26.64 per share. Our major sources of cash in the first quarter of 2008 were 6.3 million in cash flows from continuing operations along with 28 million from the issuance of debt under our new 5-year credit facility which we entered into in February. Our major uses of cash were 26 million to repay the debt under our former credit facility. The 12 million in purchases of common stock and 1.6 million in CapEx. I would like to make one additional comment on the 28 million which we borrowed under our new 5-year credit facility during the first quarter. Again the proceeds of which we used to repay the balance under the old facility. This 28 million consists of two traunches [ph], 13 million at a fixed of 3.13% for 1 year and 15 million at a fixed rate of 3.96% for 5 years. Together with our other borrowings we were able to reduce our weighted average interest rate on all our debt from 5.6% effective at the end of the fourth quarter of 2007 to 4.7% effective at the end of the first quarter of 2008. And that concludes our review of the financials and I will now turn to the conference back to operator for a Q&A session.

Thank you. (Operator Instructions) Our first question is coming from Tyler Ols [ph] from J.P. Morgan. Tyler Ols – J.P. Morgan: Morning. This is probably something I should know but what was the asset that you all sold for a [Inaudible] that gain?

That was some land actually in Europe. Tyler Ols – J.P. Morgan: In Europe, okay. And then second could you elaborate a bit more on the demand slowdown you are seeing in Asia and North America? Is it more on the capital side or consumables?

Tyler, in North America for example in the consumables and water management we have actually seen a slight pickup in the business. I think that the big swing you may be referring to is what is going on, for example, in Asia. And as you know I mentioned in my remarks longterm trends in Asia for us is really focused on China at this point and the long-term trends remain very strong. The economy will continue to grow, paper producers in the region have added a lot of capacity and actually stretched somewhat putting it into operation getting the plants up and running. In addition, I think there delaying projects a few months to see what happens in the world economy. I should also point out that we have signed contracts for five projects for 19 million which have not been recorded as bookings and are not in our backlog because we do not yet have the down payment. But, in concerning Europe, our bookings in the European business somewhat offsets the softness in China as we are seeing good activity in Russia, Ukraine, India as well as Western Europe. And I think what really helps us in all of these markets is the focus on reducing energy costs as well. Tyler Ols – J.P. Morgan: And I guess just staying on Asia for a second. Is the slowdown in more of the capital equipment? Is that making it more challenging to grow the parts and consumable business there?

No actually our parts and consumables business went up fairly well in the stock prep and as well we are penetrating the market with accessories and water management so that part of business we are very encouraged on because we are starting to really mine our large install base there. And I think the only impact that we have seen in concerning Asia is some delays in some of the major capital projects. All work for Asia continues to be very strong. Tyler Ols – J.P. Morgan: Great. And then lastly on the share repurchases this play is a little more aggressive than we had in our model. Can you just remind us what is left under that authorization?

There is 8 million left under the authorization Tyler. Tyler Ols – J.P. Morgan: Okay great. And then lastly how are you thinking about uses for cash. You talked a little bit about acquisitions I guess you could go up to a little bit more depth on the M&A environment and then thoughts on a potential dividend?

I will answer your last one first. On the dividend I think that the stock repurchases are very tax efficient. Efficient way to provide a dividend and we continue to view that as an option for our cash and the other one is acquisitions. We find that back a couple of years ago some of the multiple were quite high in companies that we would look at. That environment has certainly has changed and the strength of our balance sheet provides and also the facilities which were put together, a credit facility provides us with the means to really be an inquisitive company. We constantly look at acquisitions both within and outside the paper industry and other industries that we would like to get more of a distribution in. And we do not comment on any of them individually although we are constantly looking in and exploring acquisitions in looking for the right ones which should add a lot of value to our business which would be very complimentary, either within paper industry portfolio or provide us with the means to penetrate markets outside the paper industry. Tyler Ols – J.P. Morgan: Great, thanks very much.

All right. Thank you Tyler.

Thank you. Our next question is coming from Paul Mammola from Sidoti & Company. Paul Mammola – Sidoti & Company: Good morning gentlemen. Given Tom the weak geographic outlook you provided, what gives you confidence that you can increase revenues in the second quarter say by 10 to 11 million?

Well we have a healthy backlog. We have never had a backlog of 119 million and that backlog, again, is primarily on capital equipment because we carry very little backlog on our parts and consumables. And because that is more of a daily business, a slow business. That gives us fair amount of confidence for our guidance we have given on the second quarter. Paul Mammola – Sidoti & Company: Right and you touched on it a couple of times. So you are saying it is a timing issue at this point.

Yes this is why the second half of the year we expect to be better simply because we have a fair amount of visibility now that it is getting clearer for the rest of the year. Paul Mammola – Sidoti & Company: Okay that is fair. And Bill you talked about expanding the parts and consumable business in China. Now, does that have anything to do with expanding the Woushi [ph] facility and if so how is that going?

Yes it does. In fact we have made expansions in that facility and we also did comment that by early next year or the very end of this year we’re going to be acquiring another manufacturing facility right nearby because we are really starting to make some nice end roads. And we are very encouraged by the response that we have had from our customer base within China so we expect that business to have some nice growth opportunity in the future. Paul Mammola – Sidoti & Company: Okay. And we have seen a lot of reports out of China saying that there will be a manufacturing shutdown in the Beijing area for the Olympics. Is that effecting you guys at all, do you see that happening?

No, there is no real modern paper mills around the Beijing area. However, I think that that may benefit us to some degree because they do have some smaller paper mills in that area that are not only going to be shut down for the Olympics but they are going to shut down. And those are the types of mills that do not have western technology, they are old, they are small, they are not economical and whatever production in the area we have would add to the capacity expansion with modern mills somewhere within China. Paul Mammola – Sidoti & Company: Lastly, just going forward would you say that G&A that is just going to be the seasonally high due to compensation expense right here. How should we think about that going forward?

I am not sure it is going to necessarily the low point for the year. I mean, again, when you factor out FX and take out the increment from employee compensation expense it was pretty much flat with last year. I think that SG&A pretty, pretty well under control if you account for those two items. Paul Mammola – Sidoti & Company: Okay, great. Thank you.

It is a percentage of revenues obviously it is going to go down as our revenues increase during the year.

Thank you. Our next question is coming from Bo McKinney [ph] with LeSanc Capital [ph]. Bo McKinney – LeSanc Capital: Hi guys. Congratulations on the good quarter. Couple of questions for you. I think the last time we were up there we were talking a little about the Cadant Lamorgue [ph] facility up in France. With the pickup that you have seen in European business and the restructurings that you undertook in the last couple of years in the business, are you starting to hit the target margins you were looking for out of the business or is there still some more to come?

There is more to come. I mean we are seeing steady progress certainly in France. We are also encouraged by the progress we make actually every quarter. We are also seeing good bookings and good booking prospects for their business. They get involved in projects in India, the Middle East, Eastern Europe as well as into Russia and this year we expect our French operation to achieve operating income somewhere in the middle single digits. And as I said before I expect that progress to continue throughout 2009 and beyond. We are starting to see steady progress out of there. That is very encouraging. Bo McKinney – LeSanc Capital: And that has been what a $50, $60 million a year business for you guys. Is that moving up towards 70?

Actually that is more for two reasons. One is on the euro, the strength of the euro and the other reason is that they are getting very good capital bookings out of places like Russia and out of the Middle East. So that is very encouraging for us. Bo McKinney – LeSanc Capital: Okay. Then secondarily on a different issue, if you were to look at your experience in previous delays and projects and I know there is probably no average that you could look at but generally if there is some hesistency to move forward how long does that hesistency period last before it is resolved one way or the other? Is this something that is a temporary just people getting their confidence back in the general direction and within a quarter or two you start to see changes in sentiment or could it last longer?

Well our experience in the past has been just basically a quarter or two and I think part of it is for two reasons. One is that some of our bigger customers they are in a process of starting up a number of new paper machines and getting that equipment going so perhaps limited on staff and that has been part of the stall. And the other is certainly is taking look at the economy as a whole but the encouraging thing is that we continue to see new prospects and projects continue to surface so I would expect, Bo, that it would probably be a quarter or two at least that is our belief at this point is what we would expect. Bo McKinney – LeSanc Capital: And on that thought how late would be too late for those projects actually being shipped during fiscal 2008 for you guys. If they delayed to the end of the second quarter could you still get the products finished up and done before Q4 or is there some drop dead point before it falls into 2009.

Even if they come within the third quarter we start getting bookings. We recognize revenue and income on percent completion. So we would still get the benefit and on the other hand, the economy besides our 119 million backlog we still have 19 million of capital orders coming out of China which we have not yet recognized in the backlog yet. We are waiting for down payment. So we feel fairly confident about what China may do this year. And the long-term trend is very good. I mean they are going to continue to add on capacity. They are on a path that they have a couple of bumps in the road from time to time but the trend is very clear. Bo McKinney – LeSanc Capital: And finally a separate unrelated question and I apologize if you answered this earlier but I had people trying to ding me while I was listening. On the new credit facilities and given the fact that you have seen devaluations pull back somewhat on some of the things that might be attractive to you guys, how much incremental facilities do you have firmly committed and what has been indicated beyond that given the right type of opportunities should they arise? Thomas O’Brien: In terms of the facilities that we actually have in place, the 75 million committed and then there is another 75 million under our credit facility and accordion feature so we could expand that. That is uncommitted however. So that total facility should be 150 million, 75 million of which is committed. The only thing I was going to also mention was that last quarter we did announce a letter of intent for an additional 100 million, again, uncommitted with Prudential Capital. That has not been finalized but that would also be uncommitted assuming that we were to finalize that. BoMcKinney – LeSanc Capital: Great. All right. Thanks guys.

There appears to be no further questions at this time.

All right. Thank you Barbara. In closing I would like to say we believe Kadant is well-positioned to continue to thrive even during times of economic uncertainty. Importantly we have a record backlog of 119 million. In addition we have a strong parts and consumable business, geographic diversity, as well as an excellent balance sheet and improved access to capital. I look forward to reporting on our progress as the year unfolds. Thank you for joining us today and supporting Kadant.

This concludes today’s Kadant Inc., Corporate conference call. You may now disconnect.