At this time I would like to welcome everyone to the Nordson Corporation third quarter fiscal year 2008 results conference call. (Operator Instructions) I would now like to turn the conference over to Barbara Price.

This is Barb Price, Manager Shareholder Relations along with Ed Campbell, Chairman, President and Chief Executive Officer and Greg Thaxton, Vice President, Chief Financial Officer. We would like to welcome you to our conference call today, Friday, August 22, 2008 on Nordson's third quarter fiscal 2008 results. Our conference call is being broadcast live on our web page at www.Nordson.com and will be available for 14 days. There will be a telephone replay of our conference call available until midnight Monday August 29 by calling 1-800-642-1687 and you will need to reference ID number 59750313. Our attorneys have requested we open this call with a cautionary statement under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. During this conference call forward looking statements maybe made regarding our future performance based on Nordson’s current expectations. These statements may involve a number of risks, uncertainties and other factors as discussed in the company's filings with the Securities and Exchange Commission that could cause actual results to differ. After our remarks we will have a question and answer session. I would now like to turn the call over to Ed for an overview of our third quarter fiscal 2008 results and Nordson's future outlook.

Thank you all for attending Nordson’s Conference Call discussing our third quarter 2008 results. My comments this morning will provide highlights of what turned out to be another very strong quarter for Nordson both in terms of revenue growth and operational performance. In addition I will provide some guidance relative to our outlook for the fourth quarter. Our third quarter performance generated record sales of $288 million up 12% from the prior year driven by volume increase of 6% and favorable currency impacts of 6%. Of the volume increase the first year effective acquisitions added approximately 3%. This quarters performance included very strong results from two of our segments and as expected a decline in revenue in the Industrial Coating and Automotive segment. Regarding the Adhesive segment this the second consecutive quarter with growth of 20% or more which is very impressive for the segment. Favorable movements in exchange rates were significant contributors to the Adhesive segments growth in the quarter however the underlying 9% volume growth is very impressive performance and reflective of the success we are enjoying globally in the Adhesive segment. Following four consecutive quarters of revenue growth in excess of 20% the Advanced Technology segment turned in another solid quarter with growth of 18%. Excluding currency and the first year effective acquisitions organic growth within this segment was 8%. Within the Industrial Coating and Automotive segment the 18% decline in revenue is primarily centered in the US and the Americas. I will remind you that a large component of this segment is large dollar engineered systems and this a Nordson segment most sensitive to general economic softness and any associated pause in capital spending. On a geographic basis Europe and Asia/Pacific continue to grow at a very rapid pace where we experienced growth of 28% and 19% respectively driven by demand for both adhesive and advanced technology system sales and with Europe benefiting from weakness in the Dollar. The sales decline in the US and the Americas are attributable to economic conditions impacting the Industrial Coating and Automotive segment and are most notable within our Powder Engineered systems and automotive systems product lines. Japan’s volume decline is also attributable to Industrial Coating and Automotive but is more related to the timing of large shipments versus any economic impact on this regions results. The overall gross margin rate of 56.3% in the quarter was in line with our guidance. Operating profit increased 25% to a third quarter record $51 million or 18% of sales, equaling our margin performance of the second quarter. This level of operating margin is at a level that we have not seen since 1989 on a full year basis. On a segment basis I’m very pleased with the operating margins in the Adhesive segment, again demonstrating the leverage that revenue growth has on our operating performance. Advance Technologies operating margin declined from the rate that we had achieved in the second quarter of this year due to a number of factors that came together in the third quarter. Of the three point decline in operating margin from the second quarters 20% approximately 1% is associated with transient costs that we do not expect to see repeated. The other 2% is attributable to mix and that is mix across Advanced Technology products and geographic and end markets where net margins are lower than the mix of sales that we had in quarter two. Looking forward we believe Advanced Technology operating margins will improve in the fourth quarter from third quarter levels and over time will average in the range of the 20% level we saw in the second quarter. Our guidance that we intend to share for the fourth quarter is based on an 18% operating margin in Advance Technology. With regard to Industrial Coating and Automotive this segments performance is clearly reflective of the difficult economic environment and the associated impact on certain consumable durable end markets. The decline in operating margin is directly related to lower sales and production volumes. Our management team is sharply focused on taking the steps necessary to improve this segments performance and profitability. I’d like to add a couple additional comments on operating margins. No doubt there are plusses and minuses in the performance of the individual segments. Overall I am encouraged with the operating margin improvements that we have delivered during the last couple of quarters. Since 1997 we have pursued continuing and persistent strategy of improving operating efficiencies. Over the past 10 years we have improved the ratio of SG&A expenses to sales by five percentage points. This has directly translated to improving operating margins by five percentage points as well with the average through the first nine months of 2008 at 17% and the last two quarters at 18%. I believe that over the next 18 months we have the opportunity to improve operating margins to 20% of sales all other things being equal. Although we’ve not yet finalized our detailed plans around the actions we will be taking and I’m therefore unable to provide much specificity at this time I would expect to update all of you at an appropriate time certainly within the next few weeks. Net income for the quarter increased 32% of the prior year to a third quarter record of $32 million and fully diluted earnings per share increased 29% to a third quarter record of $0.93 versus $0.72 in the prior years third quarter. Let me provide some perspective on cash flow for the quarter. In addition to net income, non-cash charges added $14 million. Regarding uses of cash excluding $7 million of stock option tax benefits that show up as both a use of cash from operations and a source of cash from financing activities. Working capital increased by $5 million and other long term liabilities decreased by $12 million. Net capital expenditures and dividends were each $6 million in the quarter resulting in adjusted free cash flow of $17 million in the quarter. The current quarters EBITDA was $62 million a 27% increase over last year’s $49 million. Our debt levers measured as debit to total capital ended the quarter at 31%. Net of cash this ration would be 29%. In summary, the third quarters strong performance follows a very solid first half of the year with sales, operating profit and earnings per share at record levels through nine months. Let me now turn to some brief comments about our outlook for the fourth quarter of 2008. Recent demand as measured by orders both on a segment and geographic basis has been provided with our press release. In summary, orders for the last 12 weeks ending August 17, measured in constant currency and including acquisitions in both years were up 3% from the same 12 week period in the prior year. To add some perspective to the segment order rates, Adhesives 5% growth in orders is a good rate for the segment and reflective of solid growth rates across most of our geographies. With regard to Advanced Technologies 1% growth in orders we continue to see double digit growth rates in those of our businesses that are associated with material deposition. This growth has been offset in the recent order period by weakness in our other Advance Tech businesses such as Test and Inspection Equipment. To put our numbers into perspective Gartner Group is forecasting the Test and Inspection Equipment for semi-conductor markets will be down 20% in 2008 but will rebound in both 2009 and again in 2010 with growth rates of between 16% and 17%. Regarding the Industrial Coating and Automotive segment we are encouraged with the 1% increase in order rates, this increase in the second quarters weak order rate is driven by strong Powder system orders in recent weeks. With this perspective on order rates we currently have an outlook for a sales volume change from the prior year’s fourth quarter of down 3% to up 1%. I’ll add that the prior year’s fourth quarter was very strong with revenue growth of 20% so we’re up against very difficult comparison in each segment. At current exchange rates currency effects should contribute a 2% benefit the year to year sales and I might comment I think we did our outlook at approximately $1.47 per Euro today it’s a little bit above $1.48. This currency together with volume results in overall sales for the quarter of down 1% to up 3% as compared to prior year record for fourth quarter. Obviously this revenue guidance is below the preliminary estimate for the fourth quarter that I shared during our second quarter earnings conference call and I would like to provide some insight as to what changed. First, currency rates have clearly moved of late with the US dollar strengthening against the currencies that impact us the most. Also with another three months behind us we have a better understanding of how the current economic environment is impacting our Industrial Coating and Automotive segment. While our preliminary estimate in May had forecast a rebound in Industrial Coating and Automotive sales we are now projecting a further decline for the fourth quarter. There are some positives, however, and as demonstrated by the backlog we’ve built during the third quarter and the improving order trends we’ve seen in recent weeks. Given the mix of products we should see gross margins around 56%. This outlook results in earnings per share for the fourth quarter in the $0.84 to $0.94 range versus the prior year’s $0.87. This outlook does not include any non-recurring charges associated with operating improvement activities that I commented on previously. I would like to comment on what’s changed since our preliminary estimate for fourth quarter earnings per share that we shared during our May conference call. Our reduced outlook for the fourth quarter sales in Industrial Coating and Automotive coupled with a more modest benefit from currency accounts for all of the $0.14 per share change in our earnings guidance for the fourth quarter. The strong performance delivered through the first nine months of the year coupled with this outlook for the forth quarter will generate another very strong year for Nordson with revenue exceeding $1.1 billion and record earnings per share. Let me now turn to your questions.

(Operator Instructions) Your first question comes from Kevin Maczka – BB&T Capital Markets.

I want to touch on visibility in general because I think last quarter you did something that you don’t normally do which is provide a more detailed outlook two quarters out instead of just one. Obviously some things change and you just described some of those. Can you comment on visibility in general that you have in your three major businesses?

Across the 17 businesses we have and product lines across the three segments it does vary greatly I’ll put a caveat right out front around my comments. At EFD for example substantially everything that we sell we ship the same day we get the order so we have literally no visibility. At the other extreme have one business in the Adhesive segment where the average lead times are well in excess of six months and so we have quite a bit of visibility. More generally if we look across the businesses our backlog averages 45 days so that is obviously less than a quarter and as we look out one quarter at a time there is not a small degree of forecast that we’re relying on not just the backlog but the quoting that we’re doing for some engineered systems. We look at momentum factors around spare parts kind of purchases and the like as well as standard systems. Over time we have done reasonably well with our forecasting for the near quarter. When we go out beyond that we’re now delving into economic analysis as to the pace of end market growth and we’re getting outside our comfort zone and as a matter of practice we don’t believe it’s helpful for us to project more than one quarter. The reason we did give the extended preliminary look back in May for the fourth quarter of this year is that we were concerned that the momentum that we had announced in the second quarter and was embedded in our third quarter guidance was not going to be extending into the fourth quarter so we did in fact have a volume underlying the specific numbers. The volume forecast in quarter four back in the May guidance for quarter four that was down considerably from what we shipped in quarter two. We thought if we gave our best estimate it would be helpful for analysts and investors to at least have some perspective on the outlook that we were seeing. I don’t expect us to continue to do that.

On the Industrial and Auto segment the weakness there you commented a little bit geographically that that was mostly related to the US and the Americas but I’m wondering can you give a little bit more color around the three buckets there, the Container Coating, the Powder Coating and Liquid Finishing business was there any relative strength or weakness between the three of those?

The principle area of weakness that we’ve seen in ICA (Industrial Coating and Automotive) over time has been Powder Coating primarily North America and Latin America as well but primarily in those areas. It’s also been associated with declining demand for automotive systems and just as significantly automotive spare parts which are proportionately more profitable than the engineered systems. The Automotive spare parts has been a function of run rates and the quantity of vehicles being produced. We’ve seen significant drop off in the use of spare parts for our systems that are involved in the production of light trucks and SUV’s but we’ve also seen some reduction in the scale and scope of the systems demand there. Likewise in the Powder Coating business we’ve seen frankly fewer people being prepared to make big systems investments in the domestic market. A not insignificant piece is in this market are sales associated with systems being used to manufacture products that would find there way into housing and to markets like appliances and the like. We have seen some recovery here of late. We’ve had some nice orders in recent weeks. We’re beginning to lap ourselves some of the comparisons in certain markets are probably getting a bit easier as we saw some softness in some of these markets filter in over the last few quarters. Those have been the principle areas. The Container business has been one that is generally steady. It does have its own peaks and valleys that are associated with investment cycles more than anything that’s tied to the economic cycles. We had good demand in the later part of last year. We had good system sales in the first half. We have seen a little bit of weakness in container orders of late. I don’t think that that is anything other than those same kind of volatility and lumpiness that we see in demand for those kinds of systems.

On the Advance Tech side the revenues and the order growth continues to outperform these Gartner forecasts for the semi-cycle and I’m just wondering I’m sure a lot of your new product introduction has a lot to do with that. Can you talk about what else is driving that if there are big market share gains or something else going on there because I’m assuming you expect to continue to outperform that forecast?

We do and in fact I’ll tell you embedded in our guidance for the fourth quarter is another quarter of rounding double digit volume for the Advance Technology segment of Nordson. The particular strength that we’ve enjoyed as I mentioned in the order rates that we had in the most recent 12 weeks has to do with our dispensing product lines. That would be a Asymtek, EFD, TAH, Pico Dos Tech, these are products that we’ve enjoyed the benefit in the case of Asymtek with good demand arising not only from new products that we’ve introduced that have had a positive reception but also a steady and growing demand for the kind of dispensing capability that we have as a company that’s being used in a whole variety of end to markets like cell phones and other handheld devices. There is contemporaneous with that same Gartner forecast that talks about a decline in the demand for semi-conductor capital equipment is forecast by them that handheld devices the demand for those, cell phones in particular, will grow by 11% this year. What we’re seeing in the Nordson end markets is good demand generally for assembly systems that are used for these consumer electronic handheld devices but there is in generalized market for semi-conductor capital equipment a decline. That area of decline is more centered in the demand for tools to make memory chips where there’s been an overcapacity of both chips and production capacity. Our dispensing equipment it does not particularly rely on demand for those systems that really is strong elsewhere. Some of our general test and inspection equipment probably has broader and less focused application for some of the strong areas and would have some exposure to some of those memory markets. I think what we’re seeing here is industry typical softness and the demand for some of the test and inspection equipment but a lot of forecasters all call lessing around of view that 2009 is going to be a very handsome snap back in demand.

Your next question comes from Charlie Brady - BMO Capital Markets.

Can you give us any color regarding the comment on the adjustments in the operating improvement activities to improve operating performance you talked about in the release? What kind of costs or charges you might expect from that and the timing of this process?

I can’t really because if we’re going to launch a program there’s a lot of audiences that we need to be sensitive to and I’d like to just leave it at the comments I’ve made. I would want to reemphasize that we will be back in a few weeks to be able to talk about these things. The next time we have officially scheduled to be on the record with FD is going to be our Investor Day on the 12th of September and I look forward to having an opportunity to talk by then if not sooner.

Your comments on the Industrial Coating and Automotive systems business going into Q4 when you talk about further deteriorating are you talking about it sequential or are you talking about it on a year over year basis?

Year over year. When we talked about the fourth quarter back in May we indicated that we expected a rebound from a forecast decline in quarter three. We no longer believe it will rebound, by that I mean have a quarter of growth over the prior year as compared to a quarter of decline over the prior year in shipment. Our current forecast is following the decline we had in quarter three compared to the prior year of sales decline and additional decline or another quarter of declining sales quarter four this year compared to quarter four last year. That spread in the forecast from the May guidance for quarter four to the current guidance for quarter four coupled with slightly less currency about one percentage point and less currency benefit accounts for all of the $0.14 per share decline between the $1.03 we talked about three months ago and the $0.89 we’re talking about now.

Would you expect a sequential improvement in that segment on both margin and sales from Q3?

We’ll get back to you on that during this call. I don’t have it at my fingertips.

On Adhesive dispensing business that order goes to 5% a pretty respectable for that business. Any kind of lumpiness in big systems order in that 5%?

Actually not. I’m particularly pleased by the fact that it’s broad based. It is centered in the product lines within Adhesive that have good margin and have less of that long lead time lumpiness. The Adhesive segment is performing very nicely. I will say that in the fourth quarter of last year we did have some of those big system shipments that were very long lead time and probably were in backlog all the way through 2007 and shipped in the fourth quarter. I would say directionally this year’s fourth quarter doesn’t have some of those big shipments as much, it has a few, but the demand that we’ve seen in the orders is the kind of demand that we’d like to see.

We are looking at a sequential improvement in the Industrial Coating and Automotive segment fourth quarter versus third quarter.

In terms of margin and sales?

Certainly in terms of sales and I think with that volume growth there would be some margin improvement.

Your next question comes from John Franzreb - Sidoti & Company.

I’d like to talk a little bit about the growth in Europe nearly 15% in volume. Can you talk a little bit about what the driver was in the growth in Europe? Also, about your concerns about potential deterioration on the continent and what you’re hearing as far as quotation activity.

Our European business is disproportionately associated with sales of Adhesive systems and in particular Adhesive systems that are targeted at packaging and non-woven end market. The reason for that is that many of the OEMs that make the integrated packaging in non-woven assembly lines are based in Europe and they export from that location to places around the world that our sales gets booked at European sales. That tends to have a little less volatility then perhaps the Industrial Coating and Automotive segment that is more dominantly US as a percentage of our US sales. Never the less we do have all of the segments represented in Europe. Where we see the biggest demand softness is in Industrial Coating and Automotive. There is some deferral in customer’s attitudes and the like. Greg you might want to comment on some of these numbers.

As Ed mentioned certainly some improvement within the Adhesive segment and his comments on Industrial Coating some softness there as well. We’re seeing some pick up in Advance Technology in Europe as well current quarter versus prior year third quarter.

You anticipate Europe remaining strong in your outlook.

Your own view in terms of volumes in Europe is continued double digit performance. I just looked at the wrong column. Continued positive growth but I’ll eliminate the double digit adjective.

Your initial restructuring of what was then the Finishing and Coating business if I remember correctly was designed so that during down turns you wouldn’t have as much of the margin deterioration as we just saw. What happens to the initial restructuring compared to your expectations?

The kind that we’ve seen within that segment has been directly attributable to less revenue with fixed costs existing both in the manufacturing operation and the selling organization. It has flowed right to the bottom line. You look at revenue minus material costs and it fell at the bottom. We did nothing in this quarter to address spending rates it’s not where our focus has been. Our original strategy around the restructuring of the organization in Europe and in North America had to do with moving away from some product lines that were not performing, moving some of our fixed costs to variable costs in Europe, all towards an eye that we would have operating margins well in excess of our cost of capital across the business cycle. I think as we’ve said in a couple different quarters we’re not finished with the things that we think that we need to do in that segment and the management team is focusing not only at spending issues but also in looking at the products that we have and paring product lines and really looking to make sure that the investments that we’re making on an ongoing basis are targeted at high return activities. That continues and obviously we’ll have more to talk about that in the future.

In the Advance Technology segment we’re seeing a drop in the order rates this year has the Gartner expectations of growth deteriorated since May or is it still for a drop in 20%. Can you give us some color as why your order rates seem to be dipping and dipping and what’s going on out there?

Some of the dipping that we’re seeing is lumpiness. As I mentioned in the last quarter order rates for Advance Technology products were 10% stripping out currency. While we talked about 1% this quarter I shared a double digit outlook for sales volume in the fourth quarter. This is not a segment that has huge and long backlogs, it is one that I think we have estimation of what people are going to expect from us. Embedded in that 1% are some areas that are disappointing. To answer your specific question around Gartner I’m going to grab a number here and I may not grab it while I’m actually trying to answer this call but before we hang up I’ll give you what it was three months ago. I have it right now. Automated test equipment for 2008 back in a report published in May by them was down 13% as compared to todays down 20%.

The end markets deteriorated since that timeline.

What’s interesting is that they still end up with a strong outlook in all scenarios 2009 and 2010.

You’re comfortable with that outlook?

I don’t have the ability to go out all the way into 2009 and 2010. I think we view that the information we’re seeing from a number of fondants is that the atmosphere is going to get better. It’s directional in nature. I don’t believe that a 20% versus a 13% directly translates into a different set of conditions for Nordson. I believe that the market generally for capital goods and some of these segments of semi-conductor assembly are not good right now. If it was centered around memory we do have some memory exposure in some of our test and inspection equipment companies. In the areas where our dispensing technology plays there’s very good demand and I think that’s reflected in what we’re doing. I think we have some of our own initiatives relative to expanding geographic reach of some of our products, changing some of our distribution patterns within Advance Technology where some of the acquired companies are now going to begin to get exposure in Asia and Europe compared to what they had in the past. Those things give me some Nordson specific optimism on top of what I think is going to be an improving environment next year.

Your next question comes from Bob Schenosky – Jefferies & Co.

How much of the EPS change in the fourth quarter is a function of FX and can you remind us how much of the total EPS this year is FX including your fourth quarter projection?

The change in the fourth quarter projection is $0.02 per share. It’s basically going from a 3% tailwind to a 2% tailwind and that rounds out to be $0.02 per share. In terms of the entire year for fiscal 2008 based on our current projections its $0.33 per share and this is the midpoint of our guidance and the increased volume that we have in products is $0.46 per share. We’ve got some changing tax rates, we’ve got some benefits from the expiration of the inventory portion of purchase accounting and the like but $0.33 is the answer to your question.

As we think into next year given where currency is right now its certainly fair to assume that this will flatten out and potentially even turn negative for your ’09 results as compared to ’08 as it relates to currency is that correct?

That’s correct. If you look at where rates are right now against for example using the Euro we’re at $1.48 this morning. If you go backwards in time it has been higher than $1.48 beginning around the first of March. Our first quarter is November, December and January; it should be probably a push from where we are right now. As we move into the second quarter assuming things don’t change it would then be negative for the second and third quarters.

Could you assume given you’re using your European customers you’re using that as an export base if the Euro does weaken versus the dollar could you see a little bit of that offset potentially in terms of increased orders because of the currency?

Probably not, we don’t price based upon our costs, we don’t gain volume and lose volume as a result of exchange rates. We’ll price to whatever the local market will bear so to speak. What we see with currency is that it flows through offset by local spending. It is sort of like a price increase or a price decrease. Where we do sometimes see volume impacts that are associated with currency is that our customers and the currency in which they operate may be influenced by economic activity more generally.

Forgetting the Gartner forecast for a little bit but more so your view and your customer interactions the 1% new orders that you had in Advance Tech was this in line with expectations coming out of the second quarter and how does that relate in terms of your potential views looking into ’09, is this a concern or do you think that it broadly speaking will bounce back.

If I look at how those numbers have looked, those numbers bounce around. To put in perspective two weeks prior where we have rolling 12 week average and two weeks roll in, two weeks roll off. The two weeks before it was up 1% it was up 10%. Two weeks before that it was up 13%. It bounces around and I don’t want—the 1% is real. During the 12 weeks compared to a year ago orders are up 1%. I think because we only share these once every three months one data point sometimes gets fixed in peoples mind in an exaggerated way. For the whole corporation three months ago it was 0% now it’s up 3%. If I look at where it’s moved around that period it’s been up more than 3% sometimes. It does bounce around and I guess when we look at the specific forecast that we have for the corporation for the fourth quarter it sort of reflects our judgment as to what we’re going to have ship.

I recognize the Coatings business is certainly not one of the key components when we think about the company and stock price compared to the other two businesses but what specific end markets are worse than you had anticipated is it specifically automotive related or are there other surprises in terms of your forecast.

Powder is by far the biggest business in that segment. As Powder goes so go the numbers generally because the other pieces, liquid is quite small, our container business is generally stable and not tied to economic cycle that’s more just the recapitalization and cycles of our customers. If you come back to Automotive and Powder as being the ones that are moving. Powder painting systems are used to paint metal and when you think about what is manufactured in factories around the world that are metal it tends to be generally durable products both for industry as well for consumers. We see the demand from office furniture manufacturers, from appliance manufacturers as being two very large end markets that use powder painting that are important to our revenue and these businesses are not very active right now. Some of the other end markets that we might sell to that would say be in China for example continue to move along at a reasonable pace. Our powder systems business worldwide is proportionately stronger in the US than our other two segments and US economic activity plays a big roll in that segment than it does in the other two segments for Nordson.

As we look at the ABI index we’re seeing a dramatic fall as we get into ’09 for commercial construction. Is that a surprise for you or at least surprise in terms of the significant drop off in office furniture, this early?

The office furniture market has been pretty weak for quite along time. It’s not really been as active as it was in the 90s before the real bubble burst back after the dot com boom. What’s been more important to us I would say generally is a whole variety of end markets that have everything to do store shelving to racking and other industrial tools and then of course all of the various products that go into consumer durable products. The consumer is an important element to what goes on within our Industrial Coating and Automotive.

It’s more reflective of the general economic malay then?

I think it is.

Your next question comes from Walt Liptak – Barrington.

Your margins in two of your three segments are for an industrial company very enviable. In the Industrial Coating and Automotive for quite some time I think these have been lower margins, they struggle from time to time. You’ve demonstrated you can do acquisitions is this core business at this point, what’s the long term strategy for C&A?

As we’ve talked on many occasions, the things that we focused on was in the other two segments has been to be best in class operating organizations, take care of the present set of customers with best in class products and services and find ways to grow the revenue by identification of new end markets and new applications. In Industrial Coating and Automotive it’s been different. We’ve paid less emphasis on that third which is growing the top line and we’ve set our priorities to get the bottom line right. The profitability in that segment has not been adequate. I think the management has done a very nice job and the team that runs these businesses is fully engaged in doing all the things that they can to improve results and as recently as a quarter ago we had operating margins of 9%. Clearly though this is a business that is at the intersection of the weakness that we’re seeing in the US economy and that has affected demand and there’s not much we can do to persuade customers that are concerned about capital spending and their own well being to induce them when we’re involved in this kind of environment. While we’re down as much as we are, we still are moving along at a pace that is 80% of where we were a year ago when business was very strong.

You’ve got a long way to go to get to 20% operating margin in that business, do you think you can get there over the next couple of years?

No, I don’t, that’s not a number that we’ve ever described the business as doing. What we’ve talked about here is what do we need to do to get it to be 15%. Anything north of 10% we don’t have a lot of capital invested in this business, anything north of 10% is providing a full return on our cost of capital of what we have invested but that eye on the leadership I think that this business can do better than that and we’ve set at least an interim target to say get this thing to 15%. Not at every point in the business cycle but at an average through the cycle. That’s the basis upon which we’re making the improvements that we are today.

What’s the tax rate assumption for the fourth quarter?

35.5%

Is there any thought of share repurchase?

I saw some of the after hours trading last night and that started to cross my mind and I’m probably being a little bit facetious here I’m not trying to make any broad pronouncement here let me give you more serious answer. We do have a share repurchase authorization, as I know is obvious within our SEC quarterly filings that we did buy shares back in the early part of the year as the stock began to move sharply upwards, it moved top side of the brackets that we had established in our 10B5 repurchase program. We’ve not bought shares in the most recent quarter. Our ongoing belief is that share repurchases are one of the avenues by which we can use our excess capital and we’ll do it from time to time so that we at a minimum offset the dilution that might otherwise occur in connection with our various stock based employee benefit plans.

Your next question comes from Matt Summerville – KeyBanc.

If you look at Advance Tech volume trends relative to order activity recently they haven’t been too far off one another and now we have 1% order growth and you’re talking about double digit volume growth moving into the fourth quarter. Are you assuming test gets better is test actually gotten worse than how it had been trending. I’m trying to put all those pieces together, can you go through that in more detail again.

As I mentioned a few minutes ago there is a certain amount of volatility around the orders. We had the last couple weeks were somewhat weak. If I look back 14 weeks ago we had a very strong order period and as we look at a moving 12 week average our most recent results no longer include that two week period where we had a big jump in the scale of our orders.

Have you started to see any of your major semi customers start to commit to major recapitalizations as you’ve launched the 900 series?

Now we’re talking Asymtek, part of what has driven Advance Tech this year has been really excellent performance by the Asymtek organization. What’s interesting about their particular success is that in launching the 900 series they had expected that they would have an opportunity to quickly move from some prior generations products into an order pattern that would be highly centered around the 900 series. What they found is that the 900 series has attracted a lot of new customers that have not in the past made the kind of investments in the capital equipment that they could with this product line and of course some of the new customers as well. We also have seen a real surge in orders this year compared to last year and the demand for the older products. Those have been more centered in customers that already have sizeable investment in those older products are not prepared to switch from operator familiarity point of view and from other reasons that they like the products they have. We’re seeing high levels of demand for both the old and the new products at Asymtek. Over time I’m confident that we will see a continuing shift away from the old to the new and that brings not only greater simplification within our production processes and supply chains but it also gives us an opportunity to expand margins from where they are today. The other point to answer your specific question, yes we have seen some investment programs by large customers in the 900 series. These are ramping up gradually rather than you just get this monumental order all at once. You sell a few and then they get those, get familiar with them, they buy some more and so on.

The other businesses within Advance Tech with the exception of test just to be sure I’m clear are performing well and then has test actually gotten better or worse recently. How should we start to think about organic growth potential of Advance Tech in 2009?

There’s an environmental change that a lot of forecasters are saying that we’re going to have a more favorable operating environment. I’m repeating their forecast, I don’t have independent ability to be able to look at the ebbs and flows and capital investment in that industry so I’m relying on that somewhat. Within the specifics of some of our businesses where we do have technology road maps in front of us in terms of what they intend to do when they plan to make investments our expectation is that we’re going to have a very good 2009 better than 2008 as we’ve said in the past, that external environment shares with that. Back to the non-dispensing businesses, they didn’t have a real good third quarter. It was some of the mix within some of those businesses both in terms of the geographies where they sold where there was geographic strength versus geographic weakness. Some of the specific products within their product lines came with lower margins than the product lines that they might have sold in the other geographies. It was less about volume because the volume in this segment was pretty good but it was more about negative mix. That was a big factor in, not the revenue, but it was a big factor in the difference in our operating margin.

If we’re looking at double digit volume growth in Q4 why are you only anticipating roughly 100 basis points maybe a little less of sequential margin improvement there if we can account for that entire 100 basis points from what you described as transient expenses and then if you can also describe what exactly you mean by that?

One time charges could be anything from establishing reserves for inventory that we do periodically or special charges like that, it’s those types of things that are non-recurring that are in the production portion of the income statement. What we’ve based our assumption on in quarter four is another quarter three. Are we going to use all of our energies and efforts to do better than that, of course but we haven’t forecasted it and we’ve not asked you to plan on it.

Switching over to the Adhesive business, obviously organic growth has been excellent, the margin performance probably at or very near record levels. How should we think about margins going forward how is the mix in the third quarter, is there still upside to that 26.5% run rate. Maybe I’ll leave it there on that question.

As we look at quarter four in Adhesives we’re probably going to see and embedded in the guidance that we’ve given for the overall company is essentially a flat Adhesives quarter compared to a quarter a year ago that was very high and had a lot of large engineered systems. I think this quarter is going to have a different kind of a mix, it’s going to have a mix of more standard systems and that generally come at reasonably good margins. I don’t know, Greg, if there’s any particular guidance you want to share with regard to operating margins in the segment this quarter versus next but I think the direction and my sense is good operating performance is expected again from this segment but perhaps not revenue growth.

As you look at order tempo has the last 12 weeks progressed at just through Adhesives, can you talk about what you’ve seen from a geographic standpoint, specifically I want to delve into more around if you’ve seen any major changes in Europe and I know a lot of that stuff gets exported that you sell there but have you seen any major changes in Asia specifically in China?

We continue to have double digit growth rates in Asia. We have strong high single digit growth rates in Europe most recently. It’s interesting, the only place we have a little softness in Adhesive order rates is in Japan and frankly that’s lumpy, it’s a smaller territory it can bounce around week to week. We’re quite balanced.

What was in other income in the quarter, I think it was like $2.6 million, what were the big components of that?

The biggest component of that would be unrealized currency gains in our balance sheet.

Should we be looking at something similar in the fourth quarter, how should we think about that?

It depends on how we release some of those liabilities but a lot of that was in Asia as well as in Europe as the currencies reverse course we got some benefit out of that. I’d say in quarter four we may have less of a benefit.

At this time I’m showing no further questions.

I appreciate the interest everyone’s had. I won’t go any further in terms of looking for questions. We all look forward to speaking to investors again at our Investor Day on September 12 and having an opportunity to update you on all of the programs and activities that we’re about. Thanks again.