Richard Goodman – General Counsel Richard Horowitz – Chairman, CEO and President Joseph Molino – VP, COO, and CFO

Timothy Stabosz [ph] – Stabosz Asset Management [ph] Daniel Teran [ph] – Lawndale Capital

Greetings, and welcome to the P&F Industries third quarter 2008 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. (Operator instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Richard Goodman, General Counsel for P&F Industries. Thank you. Mr. Goodman, you may begin.

Thank you, operator. Good morning, and welcome to P&F Industries third quarter 2008 earnings conference call. With us today from management are Richard Horowitz, Chairman, President and Chief Executive Officer; and Joseph Molino, Chief Operating Officer and Chief Financial Officer. Before we get started, I'd like to remind you that any forward-looking statements contained herein, including those related to the company's future performance, and those contained in the comments of management, are based upon the company's historical performance and current plans, estimates and expectations, which are subject to various risks and uncertainties, including, but not limited to, economic conditions, the impact of competition, product demand and pricing, and those described in the reports and statements filed by the company with the SEC, including, among others, as described in the company's Annual Report on Form 10-K for the year ended December 31, 2007, and the company’s subsequent quarterly reports on Form 10-Q. These risks could cause the company's actual results for the 2008 fiscal year and beyond to differ materially from those expressed in any forward-looking statement made by or on behalf of the company. Forward-looking statements speak only as of the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. With that, I would now like to turn the call over to Richard Horowitz. Good morning, Richard.

Good morning, Rich, and thank you so much. And good morning to everybody and thank you all for listening to our call today, our third quarter 2008 conference call. I would like to start off with a brief view of our financial results for the past quarter. We reported net revenue of $22,104,000 for the three month period ended September 30, compared to $30,353,000 reported for the same period last year. Additionally, our earnings from continuing operations for the third quarter of 2008 were $248,000 compared to $343,000 for the third quarter of 2007. Diluted earnings per share from continuing operations for the three month period ended September 30, 2008 was $0.06 per share compared to $0.09 per share for the comparable three month period last year. Net earnings from discontinued operations were approximately $26,000 for the three month period ended September 30, 2008 compared to $121,000 for same period in 2007. Diluted earnings per share from discontinued operations were $0.01 and $0.03 per share, respectively for the three months ended September 30, 2008, and 2007. As a result of all this, the company reported net earnings of $274,000 for the three month period ended September 30, 2008, compared to $463,000 reported for the three month period ended September 30, 2007. Overall, our diluted earnings per share for the three month period ended September 30, 2008 and 2007 were $0.07 and $0.12, respectively. Before I take a more detailed look at the operations, I would like to review with each of you what we do at P&F. I know this is redundant, but we do it generally for the newcomers on the call. Our Continental Tool Group consists of our Hy-Tech and Florida Pneumatic wholly-owned subsidiaries. Hy-Tech manufactures and distributes pneumatic tools and parts for industrial applications. Hy-Tech manufactures approximately 60 types of industrial pneumatic tools, most of which are sold at prices ranging from $300 to $7,000, under the names, ATP, Thaxton, THOR and Eureka, as well as under the trade names and trademarks of other private label customers. This line of products includes grinders, drills, saws, impact wrenches and pavement breakers. Hy-Tech's products are sold to distributors and private label customers through in-house sales personnel and manufacturer's representatives. Users of Hy-Tech's tools include refineries, chemical plants, power generation facilities, heavy construction industry, oil and mining companies, and heavy industry. Hy-Tech's products are sold off-the-shelf and are also produced to customers' specific orders. Florida Pneumatic is primarily engaged in importing and manufacturing of approximately 75 types of pneumatic hand tools. Florida also markets, through its Berkley Tool division, a line of pipe-cutting and threading tools, wrenches and replacement electrical components for a widely-used brand of pipe-cutting and threading machines. In addition, through its Franklin Manufacturing division, Florida Pneumatic imports a line of door and window hardware. Countrywide Hardware is comprised of Nationwide Industries, Woodmark International and Pacific Stair’s products. Countrywide imports and manufactures hardware products for items such as doors, windows and fences, staircase components, kitchen and bath hardware and accessories, as well as other general hardware products. Pacific Stair was formerly a manufacturer of premium stair rail products and is now a distributor only of staircase components to Woodmark to the building industry, primarily in Southern California and the Southwestern United States. Now let’s review the quarterly performance at each of our units. Net revenue for the three month period ended September 30, 2008 for our Tool segment was $12,253,000 compared to $17,112,000 for the same three month period in 2007. When analyzing this decrease, we note that revenue in Florida Pneumatic decreased to $7,211,000 from $12,686,000. Significant factors contributing to the decrease of Florida Pneumatic include a net reduction in retail revenue of $4,719,000, of which $1,909,000 was due to a wind down of the Home Depot business, and a reduction of $2,810,000 of revenue from a major retail customer, due to reduced volume of promotions and lower sales of basic retail products. Additionally, our Franklin Hardware product line decreased $756,000, primarily the result of the loss of its business with Home Depot. I would like at this time to point out that despite the fall-off in revenue, as a result of improved gross margins and reductions in operating costs, Florida Pneumatic improved its income before taxes by approximately $150,000, or 26.8% to $673,000 for the three month period ended September 30, 2008 versus the same period in 2007. The acquisition of Hy-Tech continues to provide a positive impact to us at P&F. Hy-Tech, which focuses on the industrial sector of pneumatic tools market has not been affected by the sluggish economy as the retail sector. Hy-Tech’s net revenue for the three month period ended September 30, 2008 was $5,042,000 compared to the three month period September 30, 2007 amount of $4,426,000. This increase is primarily attributable to organic growth. At Countrywide, as a result of the continuing reduction in the number of new homes being constructed, a principal driver for the Hardware segment, net revenue was $9,851,000 for the quarter ended September 30, 2008 compared to $13,241,000 for the three month period ended September 30, 2007. Specifically, our Woodmark subsidiary, which primarily markets stair parts to the southern tier of the United States, continues to be hard hit, with net revenue of $5,613,000 for the three month period of this year compared to $8,188,000 for the third quarter of 2007. Within Woodmark, revenue from the sale of its stair parts and accessories product line decreased $2, 231,000, again primarily due to the diminished number of new housing starts as well as a loss of a major customer. Additionally, Woodmark incurred a decrease in its kitchen and bath product lines revenue of $344,000 due to diminishing recreational vehicle market, which in the past had been a key customer group for the kitchen and bath line as well as weakening general economic conditions. Until the downward trend in a number of new housing starts level begins to increase, we do not expect to see improvements in Woodmark's net revenue. Pacific Stair products located in Southern California reported net revenue of $543,000 for the third quarter of 2008 compared to $1,042,000 for the same period last year. This continuing fall of net revenue was primarily attributable to the continuing decline in the new home construction market in Southern California and Arizona. Nationwide, which primarily markets fencing and gate hardware, had not until very recently been materially affected by the sluggish homebuilding sector or the general slowdown in the overall economy, and it had net revenue of $3,695,000 during this past three month period compared $4,011,000 for the same period in ‘07. Nationwide's net revenue for fencing increased a modest $30,000. However, it incurred decreases of $228,000 and $118,000 in its OEM and patio business lines respectively. We anticipate that competitive pressures and cost increases from our foreign suppliers may continue to reduce the beneficial benefit of the new products which were introduced during the first six months of 2008. I am pleased to report, though however, that our consolidated gross margin increased to 31.1% during the three month period ended September 30, 2008 compared to 27.6% for the same period last year. Gross margins in the Tool segment increased 8.8 percentage points to 34.5% for the three month period ended September 30, 2008 from 25.7% for the same period last year. Despite the increase in gross margin percent, gross profit dollars for this segment decreased $162,000, obviously due to the reduction in our net revenue. Specifically, gross margins at Florida Pneumatic increased 8.9 percentage points to 32.5%. Factors contributing to this margin improvement include, a reduction in the fee arrangement paid to an overseas trading partner and continued various cost reductions implemented during 2008. However, when taken in conjunction with a decrease in revenue, Florida Pneumatic’s gross profit declined approximately $664,000. Hy-Tech witnessed increases in gross margin and gross profit when comparing the three month period ended September 30, 2008 versus 2007. Gross margin increased approximately 5.7 percentage points to 37.2% for the three month ended September 30, 2008 from 31.5% reported for the same period last year. In combination with the increased revenue, Hy-Tech’s gross profit increased $502,000 during the same period. The increases reported in this quarter at Hy-Tech are primarily due to product mix as well as improved manufacturing efficiencies. However, partially offsetting the above, overall gross margin for the Hardware segment decreased as it continues to be severely affected by the downturn in new home construction. For the three month period ended September 30, 2008, the Hardware segment gross margin was 26.9% compared to 30% last year. Gross profit for the Hardware segment for the third quarter of 2008 was $2,648,000 compared $3,975,000 for the same period in ’07. Specifically, gross margin for our stair parts business, as well as our kitchen and bath businesses at Woodmark, decreased 1.3 and 6.2 percentage points, respectively when comparing the three month periods ended September 30, 2008 versus 2007. These gross margin decreases combined with a reduction in revenue combined to generate a reduction of gross profit at Woodmark of $844,000. Gross margin decrease in the stair parts business was primarily the result of lower absorption of fixed expenses as a result of lower revenue. The decrease in gross margin for the kitchen and bath product line is due primarily to combination of vendor price increases combined with selling price concessions. Gross margin for the three month period ended September 30, 2008 at Pacific Stair continued to reflect the impact of the severely reduced number of new homes being constructed in the southwest region of the United States as well as the inability to reduce fixed manufacturing overhead costs as sales levels decreased. As a result, for the three month period ended September 30, Pacific Stair products reported deficit margin of 4.3%, compared to gross margin of 14.9% in 2007. In an effort to improve the overall result of Pacific Stair, during the fourth quarter we completed the closure of its mill and consolidated all its operations into one warehouse. As a result of this mill closure, during the three month period ended September 30, 2008, we recorded in our SG&A a write down of certain assets and inventory aggregating approximately $136,000. We believe this action should improve the Pacific Stair financial results moving forward; however, there can be no assurance that other factors will not impede this action. Gross margins at Nationwide were 33.5% for the three month period ended September 30, 2008, compared to 38.2% reported for the same period last year. The gross margin decrease was primarily due to price increases from overseas suppliers, as well as competitive conditions which, for certain items, necessitated price reductions. Combined with decreased revenue, its gross profit fell $295,000. I am pleased to report that during the three month period ended September 30, 2008, our SG&A decreased $823,000 or 11.8% to $6,122,000 when compared to the three month period ended September 30, 2007 amount of $6,945,000. Significant components of the reduction in SG&A include reduction in salaries, benefits and bonuses aggregating approximately $333,000, commission costs were lower by $145,000, advertising and other promotional charges decreased $374,000, freight expenses were lower by approximately $119,000, and lastly, warranty charges were down $41,000. Offsetting the above reductions in our operating expenses was an increase in professional services of $144,000. Additionally, in connection with the closure of the mill at Pacific Stair, we recorded impairment charges in connection with the write down of certain assets and inventory which aggregated to $136,000. We believe the closure of the mill, which has been significantly under-utilized, should enable Pacific Stair to improve its overall financial performance in the future. In conclusion, I would like to state that although our overall results from continuing operations for the third quarter of 2008 were down compared to the same period last year, and despite a decrease in our nine-month net revenue total, net income from continuing operations has improved $331,000 or 46.0% when comparing the nine-month periods, September 30, 2008 versus 2007. Our results from continuing operations for the third quarter of 2008 reflect the country's general economic tone, and, as such, we believe it is likely that our results from operations will remain weak for the remainder of 2008. The keys to our recovery and growth will be the eventual timing of a housing recovery as well as improved consumer spending at the retail level. Until such time, everyone at P&F remains dedicated to optimizing our efforts in order to enhance shareholder value. At this time, I would like to turn the call over to Joe Molino who will review our year to date results and other financial matters.

Thank you, Richard. We reported net revenue of $72 million for the nine-month period ended September 30, 2008 compared to $85.9 million in revenue for the same period in the prior year. However, our earnings from continuing operations increased to $1,050,000 compared to $720,000 for the first nine months of 2007. The diluted earnings per share from continuing operations for the nine-month period ended September 30, 2008 were $0.28 compared to $0.19 for the comparable nine-month period in 2007. Net earnings from discontinued operations were approximately $81,000 for the nine-month period ended September 30, 2008 compared to $3,129,000 for the same period in 2007. Diluted earnings per share from discontinued operations were $0.02 and $0.82 respectively for the nine-month periods ended September 30, 2008 and 2007. I would like to point out that the net earnings for the nine-month period ended September 30, 2007 included a non-recurring gain on the sale of real estate assets of discontinued operations of $3,027,000 or $0.80 per diluted share. As a result, the company reported net earnings of $1,131,000 for the nine-month period ended September 30, 2008 compared to $3,849,000 for the nine-month period ended September 30, 2007. Accordingly, our overall diluted earnings per share for the nine-month period ended September 30, 2008 and 2007 were $0.30 and $1.01 respectively. With respect to revenue in our Tools segment, net revenue for the nine-month period ended September 30, 2008 was $40 million, down from $44.5 million for the same period in the prior. When analyzing the change, we note that net revenue at Florida Pneumatic decreased by $8 million. This decrease is primarily the result of the following factors impacting Florida Pneumatic’s performance; the wind down of the business with Home Depot, a reduction of retail and promotional sales volume with a major customer, and reduced volume at Franklin, primarily due to the loss of Home Depot. However, the decline in year to date net revenue at Florida Pneumatic was offset by an increase in nine-month net revenue at Hy-Tech of $3.5 million during 2008 to $14.4 million compared to $10.9 million reported for the nine-month period ended September 30, 2007. Hy-Tech offers its products to the industrial sector of the pneumatic tools marketplace. Its growth is organic, as it widens both its product line and consumer base. I would also like to point out that Hy-Tech’s results for 2007 are inclusive from February 12, 2007, the date of the acquisition through September 30, 2007. As we have indicated during the previous quarter's earnings call, we expect retail revenue of Florida Pneumatic to remain weak for some period going forward, as we have been advised by our largest retail customer that they have reduced their expenditures on advertising and are expecting lower in-store sales. In addition, the Home Depot business has finally concluded. As for the net revenue for the Hardware segment, it continues to be severely impacted by the ongoing downward trend of new home construction. This segment reported revenue of $32 million for the nine-month period ended September 30, 2008, down from $41.4 million reported for the same period last year. Specifically, net revenue of both Woodmark and Pacific Stair both adversely affected by the reduction in new home construction, reported decreases in net revenue of 28.5% and 47.8% respectively, when comparing the nine month periods ended September 30, 2008 and 2007. Woodmark reported revenue of $18 million and $25.2 million respectively for the nine-month period ended September 30, 2008 and 2007. Likewise, revenue of Pacific Stair products decreased to $1.6 million from $3 million when comparing the nine-month periods ended September 30, 2008 and 2007. It is difficult to predict when the new home starts will begin to improve. Until such time, we will continue our ongoing efforts to reduce costs and overhead wherever possible to offset lower revenue. Lastly, when comparing the nine month periods ended September 30, 2008 and 2007, net revenue at Nationwide decreased to $12.4 million from $13.2 million or approximately $800,000, primarily due to a weakening of the general economy and competitive pressures. We reported consolidated gross margin for the nine-month period ended September 30, 2008 of 31.4%, a 2.1 point improvement over the same period in the prior year of 29.3%. Overall gross margin for the Tools segment for the nine-month period ended September 30, 2008 improved over the same period in the prior year by 5.7 percentage points to 33.5% compared to 27.8% in the same nine-month period in the prior. Specifically, Hy-Tech improved its gross margin to 37.5% for the nine-month period ended September 30, 2008 from 33.6% reported for the same period in the prior year. Hy-Tech’s gross margin increase is due primarily to an improved product mix and lower variable costs. Additionally, during the period from the date of the acquisition through September 30, 2007, we amortized and added to Hy-Tech’s cost of goods sold $428,000, which represents the write-up to the then fair value of Hy-Tech’s inventory acquired at February 12, 2007. Gross margins at Florida Pneumatic improved as well to 31% for the nine-month period ended September 30, 2008 from 25.9% reported for the same period in 2007. This improvement is primarily due to reduced costs from overseas suppliers and product mix. However, gross margin for the nine month period ended September 30, ‘08 for the Hardware segment was down 2.2 percentage points to 28.8% from 31% reported for the same period in 2007. Woodmark's overall gross margin was down 1.7 percentage points to 27.3% for the nine-month period ended September 30, ‘08 from 29% in the prior year, due in part to less efficient absorption of warehouse costs due to lower revenue as well as general market conditions. On a year-to-date basis, Pacific Stair products reported a deficit margin of 9.3% compared to a gross margin of 13.5% reported in the nine-month period ended September 30, 2007, principally the result of the under-utilization of the facility. However, as noted above, actions have been taken which we believe should improve its gross margins in the future. Gross margins for the nine-month period at Nationwide decreased three percentage points to 35.8% from 38.8%, primarily the result of higher material costs combined with current competitive market conditions. Our SG&A for the nine-month period ended September 30, ‘08 aggregated $19.4 million, reflecting a reduction of $2.2 million from $21.6 million from the nine-month period ended September 30, 2007. Key elements contributing to this reduction include a decrease in total salaries, payroll taxes and other employee costs aggregating $804,000, much of which is due to a compensation charge in connection with the sale of Embassy’s real estate asset, which occurred during 2007 of approximately $400,000. Advertising and other promotional charges decreased by $632,000; commission expense decreased by $264,000; freight costs decreased by $241,000; depreciation was lower by $259,000; warranty expense decreased by $190,000; product liability decreased by $236,000; stock-based compensation decreased by $133,000; and total engineering expenses decreased by $56,000. Additionally, certain intangible assets related to our acquisition of Nationwide were fully amortized during 2007, resulting in a reduction of amortization expense of $133,000 when comparing the nine-month periods ended September 30, 2008 and 2007. Lastly, during the first quarter of ‘08, we receive a payment of $155,000 as reimbursement of fees and expenses incurred related to a legal matter which was settled in our favor, thus reducing professional fees during 2008. The above items were offset by a one-time severance and equipment write down of $219,000 incurred as a result of loss of the Home Depot business as well as impairment charges resulting from the Pacific Stair mill closure of $136,000. Lastly, we incurred additional fees for professional and consulting services of $154,000, primarily in the accounting area. Our net interest expense for the nine-month period ended September 30, ‘08 was lower than the same period in the prior year by $806,000. Key components of this change include, interest expense incurred in association with Hy-Tech’s term loan, decreasing $318,000; interest expense associated with the Woodmark acquisition, decreasing by $359,000; and interest on a note payable was lower by $85,000 as this note was paid off in full in 2007. The preceding reductions of interest expense were partially offset by an increase in interest expense incurred in our short-term borrowings, which increased primarily as a result of the pay down of long-term debt in January of 2008, thus increasing short-term debt. Under the terms of our credit agreement, we can borrow at prime or LIBOR plus applicable additional loan margins. The primary factor for the lower total interest expense is low average interest rates, compounded by lower year-to-date balances on our credit facilities. Total borrowings of approximately $31.9 million reflect a decrease of approximately $2.1 million from the $34 million at the end of December of 2007. The year-to-date change is primarily due to a decrease in working capital needs, consistent with lower revenue. Other items of note, our capital expenditures for the nine months were $694,000 compared to $1,028,000 at the same period in the prior year. We also reported depreciation and amortization of $1,277,000 and $1,138,000 for the nine-month periods ended September 30, 2008 and 2007 respectively. With that, I would like to turn the call back over to Richard. Richard?

Thank you, Joe. And that is the end of our report today. We will be happy to answer any questions anybody may have. But in closing, I would just like to make mention that Sidney Horowitz was the Chairman of the Board of P&F, the original founder of the business, the informant first Chairman passed away last week at the age of 87. And he will be missed, and I just wanted to make mention of that since he was our founder. Any questions, operator, we will take them now.

: : : Timothy Stabosz – Stabosz Asset Management: Hi, Good morning, Richard and to everyone at the company, my condolences on Sidney's passing, very sorry about that.

Thank you. Timothy Stabosz – Stabosz Asset Management: As far as the company goes, I have got to say that considering that you’re a housing related stock, the fact that you have had a sales decline of nearly 30%, and are maintaining profitability is quite impressive. How do guys feel about that – is that surprising or I guess it’s – just seems like a good sign, though.

Well, I mean, thank you for saying that. We feel in our company that we have very, very good management at all levels and it is kind of miraculous between the retail sector and the housing sector, both being down that we are maintaining profitability, even though it’s, it’s a shadow of our former profitability, but we do feel like we -- when the economy does pick up and things get better, that we are in a very good position for all the things that we are doing, we are much, much leaner than we were. And we do feel like we are in a good strategic position to take advantage of the recovery whenever that comes. We should all live so long that it should come sooner rather than later. Timothy Stabosz – Stabosz Asset Management: I missed the early part of the call, could you say little bit about liquidity, I think the stock is down to $1 or $1.50 clearly because of your relatively high debt levels, and yet again maintaining profitability suggest that you are recovering your interest payments and things are stable. Do we say anything about covenants or how close we are to violations or what not and management’s comfort level going forward if things stay at least as stable as they are now?

Yes, I will let Joe mention more of the specifics on it, but our bank relationship stays good and stays firm and I believe we are not in any violation of any covenants at this time. Joe, you want to elaborate?

Yes, that is correct. We are not in violation of any covenants at the third quarter. The debt is not only -- we are not only covering our interest, we are amortizing the loans each and every quarter and so even if we simply stay the course in this lousy economy, with each passing quarter, the debt in relation to our EBITDA continues to fall.

Having said that, our agreement had a four-month extension and extended till the end of November, I believe. Am I right? And we expect the extension to be granted once again. We don't expect, we haven't heard anything, any issue or any problems in that regard whatsoever. Timothy Stabosz – Stabosz Asset Management: Yes, let us explain the extension again, what are they waiting for, in terms of the longer term, instead of leaving you hanging in terms of the longer-term type thing –

One of our lenders and Joe can be more specific than I can, but one of our two lenders had a policy within their own bank that if certain assets weren’t covered in a certain way with real estate that they would only give us short windows of extension. Having said that, we are in the midst of changing that whole arrangement right now with our mortgages and all of that and we do expect the new extension to last through the anniversary, which would have been July or August, or June or something of last – Timothy Stabosz – Stabosz Asset Management: And then still working on something then that would be longer term?

Yes, Joe?

Yes, we will move back into our regular cycle, which is the June 30 renewal after this next renewal here in the next few weeks. We were simply realigning some of the collateral that – we formalized a little bit more of a collateral relationship with the banks. Prior to this, our real estate was not completely collateralized with our general loans. There were a couple of small mortgages on the real estate, but we have got some substantial value in our real estate and we are going to be providing some of that collateral to our main lenders. Timothy Stabosz – Stabosz Asset Management: We have had an annual renewal on the line historically, I am sorry, I don’t remember that?

Yes, usually renews June 30. Timothy Stabosz – Stabosz Asset Management: Okay. So you are looking to get back to that.

And we will go back to that cycle. Timothy Stabosz – Stabosz Asset Management: Final question, if I have anything else, I'll get back in queue, you know with the debt levels and the profits down, what is the policy in the stock buyback at this point, and you know there is a lot of value that could be created for shareholders if you can buy back stock. Did you buy anything back in the quarter? I know you are more concerned about liquidity, I won’t say liquidity, but more concerned about the profits being down on the relative debt levels and not buy back stock, are we still going for that?

Yes, the answer is yes and yes. We did buy stock back in the third quarter, we will tell you in one minute if we can –

22,000 shares.

22,000 shares. And at this point, obviously we feel that the stock is way undervalued and we would like to buy, but it is a balancing act at this point between our own needs in the company and buying stock and with legal guidance as to what we can and cannot buy, we will be doing it clearly in the future. Timothy Stabosz – Stabosz Asset Management: I am sorry, doing it clearly, can you explain that?

When the opportunity arises, and we can do it with our finances not being – the company obviously finances take first priority. So, when we feel like we are in a good enough financial position with the window going forward, we will be back in the market buying stock again. Timothy Stabosz – Stabosz Asset Management: 22,000 shares, is that the max that you could have bought according to the trading limit restrictions –?

No, we could have bought more, we could have bought more. Timothy Stabosz – Stabosz Asset Management: Okay, that is it for now. Thank you.

Okay, thank you.

(Operator instructions) Gentlemen, it appears we have no further questions coming from the phone. I'd like to turn the floor back over to management for closing comments.

Operator, we have one very active stockholder who always has questions, and I am a little surprised. Could you just ask one more time if there is any other questions?

Certainly. (Operator instructions) And we do have a question coming from Daniel Teran [ph] with Lawndale Capital. Please state your question. Daniel Teran – Lawndale Capital: Hi, Andy’s out, so I going to couple of questions. I wanted to get an update on where we are with the legal action regarding the real estate?

Yes, nothing new. We have a preliminary trial date set for February of 2009. Daniel Teran – Lawndale Capital: February of 2009. Is there any like mandated kind of mediation or arbitration that you have to get through before that?

No, that is the trial date. Daniel Teran – Lawndale Capital: Okay, you’ve done that already. Could you just tell us what the gross margins were at Woodmark, I think you mentioned the delta but not the absolute numbers.

If you give us a second, I can come up with that. I don't know that we did say that. Why don't you go onto another question, and we will answer that. Daniel Teran – Lawndale Capital: Sure. How about – okay, at Hy-Tech, it is flat sequentially, I guess up year over year a bit and just trying to get a feel for where we are in terms of what the revenue drivers are, the strength there at the moment, is it in the oil and gas area strictly or is there other areas that have been –?

It’s across the board, really every market we serve, all the larger ones that we serve are up, whether it would be power generation, oil and gas, heavy construction, manufacturing. Oil is probably leading the way, but we don’t really see right now that there has been any weakness. And in some cases, we’ve been taking some market share, so that may be masking that. Going back to your question about margin, Daniel, Woodmark gross margin in ’07 for the quarter was 28%, for this year’s quarter, 25.6% for the year, Woodmark’s margin was 29% for ’07 and 27.3% of ’08. Daniel Teran – Lawndale Capital: Okay, thank you. And now, when you are making cost reduction cuts here, what type of assumptions are you making about market recovery on the back side? I guess, how much cuts are you retaining based on some type of assumption that the market might come back 30%, 40%, or whatever in new housing starts. Or are you making less optimistic assumptions in those cuts?

Well, you have to remember, with respect to capacity, the capacity is driven by overseas, when you have a tremendous flexibility in our capacity here in the US side of things. So, nothing we’ve reduced really has an impact on our ability to recover after the starts rebound. Daniel Teran – Lawndale Capital: All right. Okay. But what about for instance at Pacific Stair, I guess it’s got a gross loss there at this stage. Are you maintaining that more from maintaining a regional presence?

Yes, well, if those customers return, we will get that business and we are still serving the same customer base, but now with imported product. I mean there were several customers that weren’t interested in that, but by and large we have the same customers that we had. Daniel Teran – Lawndale Capital: Are your businesses positioned, that have been selling into the new build market, are they positioned to benefit at all from renovation? I mean some of these places, you know, are building, a couple years ago might not be ready for renovation, and is that the same distribution channel for your products?

It’s generally the same distribution channel. But it’s their part refurbishing; it’s a very small part of the market. In fencing, it’s probably half the market. And we are already in those channels. Daniel Teran – Lawndale Capital: Okay. And then final question, is there any areas that you are seeing any regional strength or resilience, I know the aggregate numbers are very ugly, but what about from a regional basis?

I would say, the area that’s down the least is probably the Texas area, and probably the northeast, it’s probably not down as much. But generally the south and certainly the west are down a lot. Daniel Teran – Lawndale Capital: All right. I think that’s all the questions I got for now. When do you think the Q will be out?

Tomorrow afternoon, I believe. Daniel Teran – Lawndale Capital: Great. Thank you very much.

You are welcome.

(Operator instructions) We do have a follow up coming from Timothy Stabosz with Stabosz Asset Management. Please state your question. Timothy Stabosz – Stabosz Asset Management: The real estate for the sake of your common stockholders and perhaps even your lenders and the whole community around the company, can you give us a sense of what the book value and the market value is?

Well, the appraisals are just going to be coming in, in the next week or two. I don’t want to speculate other than saying it’s certainly a few million dollars more than they are on the books for us. And I would say most of that difference is at the Florida Pneumatic property in Jupiter, Florida. Timothy Stabosz – Stabosz Asset Management: So, low single digit millions right?

Yes. Maybe even mid single digit millions, but in terms of a delta. But I don’t want to speculate. Timothy Stabosz – Stabosz Asset Management: I guess, that’s all for now. Thank you.

Okay.

Gentlemen, we have no further questions at this time. I would like to turn the floor back over to management for any closing remarks.

Hey, thank you all for participating on the call today. And we look forward to giving you better news and earnings going forward in the future.