Welcome to the Colfax Corporation second quarter earnings conference. (Operator Instructions) At this time I would like to turn the conference over to Mitsy Reynolds, Vice President of Investor Relations.

My name is Mitsy Reynolds and I am the Vice President of Investor Relations. On the call today, we have John Young, our President and CEO and Scott Faison, Colfax's Chief Financial Officer. I would like to point out that our earnings release and 10-Q are available in the investor section of our website, ColfaxCorp.com. We will also be using a slide presentation to supplement today’s call which can also be found on the investor section of our website. Both the audio of this call and the slide presentation will be archived on the website later today and will be available until the next quarterly call. In addition, a replay of this call will be available until approximately August 22. The replay number in the US is 888-203-1112 and internationally it is 719-457-0820 and the access code is 8865744. This information is also listed in the press release. I would also like to note that in order to help you understand the Company’s direction, we will be making some forward-looking statements during the call, including statements regarding events or developments that we believe or anticipate will or may occur in the future. These forward-looking statements are subject to a number of risks and uncertainties, including those set forth in our SEC filings. It is possible that actual results might differ materially from any forward-looking statements that we might make today. The forward-looking statements speak only as of the date that they are made and we do not assume any obligation or intend to update any forward-looking statements except as required by law. During the presentation we will describe certain of the more significant factors that impacted our year-over-year performance. Please refer to the accompanying slide presentation and the MD&A section of our second quarter 10-Q for details regarding additional factors that impacted year-over-year performance. With respect to any non-GAAP financial measures during the call today, the accompanying information required by the SEC regulation G relating to those measures can be found in our earnings press release under the investor section of the Colfax website. References in this presentation to adjusted net income, adjusted net income per share, adjusted operating income and adjusted EBITDA of all non-GAAP measures and may exclude asbestos liability and defense cost income and asses its coverage litigation expense as well as a legacy legal adjustment and one-time initial public offering related cost. Adjusted net income also reflects interest expense as if the offering had occurred at the beginning of the period and present income taxes at an effective tax rate of 34%. Organic sales growth and organic order growth also a non-GAAP measures excludes the impact of acquisitions and foreign exchange rate fluctuations. Now, I would like to turn it over to John.

Before I get started I would like to formally introduce Mitsy Reynolds as our new Vice President of Investor Relations. Welcome to the Colfax team, Mitsy.

Thanks, John.

Good morning, everyone. This is our second quarterly earnings call since we began trading on the New York stock exchange on May 8. Today, I will start by covering some of the second quarter’s more significant highlights and some of the key performance measures that we achieved. I will follow that with the review of our strategic end markets. Finally, I will review the financial results and then we will open it up for a question and answer session. As we announced in the press release issued this morning, Colfax had a strong second quarter. The adjusted net income was $13.9 million or $0.32 per share; a 53% increase over last year second quarter. Net sales for the quarter were a $161.4 million, an increase of 32% including organic growth of over 18%. Organic sales growth was particularly robust in the power generation end market which was up 61% as well as the general industrial market which was up 26%. Adjusted operating income increased 43% to $23.6 million. Driven by the increase in sales, adjusted operating profit margin increased to a 110 basis points to 14.6%.Adjusted EBITDA increased by 32% to $27.5 million. Turning now to year-to-date numbers, for the first six months, adjusted net income was $24 million or $0.55 per share, an increase of over 48% over the first six months of 2007. Net sales for the six months were up 23% to $292.1 million. Organic sales grew just over 10%. Adjusted operating income increased 34% to $41.9 million while adjusted EBITDA increased 27% to $49.5 million. We continue to see strong growth on our order rates and backlog during the quarter. Order rate has grown steadily on an organic basis over the past several years and into the first half of this year. Year-to-date orders were up…

(Operator's instruction) Our first question comes from John Inch with Merrill Lynch. , John.

I guess the obvious question of oil and gas, if I remember I thought from the first quarter, you thought that was going to rebound a little bit in the second quarter and it really did not but you think it is going to improve in the second half. A little bit of color there perhaps, Scott and John, in terms of what happened and sort of why you think it is going to come back in the second half.

Yes, sure. I think the comment was related to orders, John. We anticipated a large influx of oil and gas orders in the second quarter which we did receive. Orders were up 61% in that end market. We tend to be somewhat backend loaded in the third and fourth quarters on oil and gas shipment this year related to some of the project business that we had. So we feel pretty comfortable with our oil and gas revenue in the back half of the year.

Is it, John, sort of a large project that you are looking at in terms of oil and gas or are they just broader based activity that is going to weigh itself to the back half?

No, it would be broader based activity. Last year, we had one extremely large project that they created some lumpiness in our comparison that is why the revenue on the quarter to quarter basis was down this year but this year it is a series of projects but tend to be for shipment dates in the third and fourth quarters.

Then the order trends for the quarter sort of progress on a linear basis or do they tend to pick up as the quarter progress or actually drop off? I mean a little bit more color as the quarter progress would actually be helpful.

Sure. It was fairly linear. I mean we came out of the blocks, very strong in April and May. June continued to be at a pretty high pace so it was reasonably linear.

And then I guess just lastly, US versus sort of rest of world in perhaps even emerging markets, there is a little of bit of consternation around sort of the trend line of emerging markets. What do you guys seeing there? I know that a lot of you say your European business ultimately ends up there but do you have any kind of a read-through in terms of just end market demand?

Sure. I think our emerging market business continues to be very strong. I mean as you had mentioned, a large percentage of our alien business in Europe ultimately ends up in the Middle East and Asia. We also have reasonable percentage of our sales direct into the Asian region and that business continues to be pretty strong. So, we have not seen any, I would say, sort of any material changed in velocity in that particular market.

Next is Jeff Hammond of Keybanc Capital Market.

Good. So, you are in pretty good momentum in your businesses. I just wanted to see if you are seeing any capacity constraints in any of your plans where you need to bring on more capacity on a near-term basis?

Yes, we are running in a pretty good cliff right now. In fact, we have invested a larger percentage of capital in the first half of the year as a result of that to increase our capacity. I would say we are still in a position to meet our customer needs from a capacity perspective. I think our bigger issues surround the availability and supply of raw materials and lead times, associated with some of the…, for example, drives in caps and etc. I think that probably more than anything is putting pressure on our delivery schedules.

Okay and then just a follow on to the order trend, I think you said on the call last quarter that through I guess April and May, an organic order growth of 28 that is versus I guess 19 for the whole quarter. So, it seems obviously I cannot see the monthly numbers but it seems like you had a fairly sizable downtick and the growth rate is, could you just speak to that?

Sure. Yes, I mean our orders are pretty lumpy month to month and the month of June in particular in '07 was particularly strong so was a tougher comparison I think if you look at the gross amount of bookings month to month, June in comparison to April and May was a very strong month as well. So, I would say no change in the velocity of order intake at this point.

Next is Mike Schneider with Robert W. Baird. Michael Schneider - Robert W. Baird & Co., Inc.: Great. Maybe firstly, just talk about your comment about growth in the second half. You had expressed that you would expect a low double digit growth organically that continue in the second half. I am curious just why you would expect a deceleration from the Q2 rate of 18% because orders at least year-to-date are up 21% organically and I believe that comparison was the second half of last year get easier from here, what is it that you see in any particular market or geography that would cost the deceleration?

Sure, yes. I think we need to look at the first half in total. If you remember the first quarter was relatively low on organic growth basis. So there were some timing differences between the first quarter and second quarter so I think we are a little over 2% in the first quarter and then 18% in the second quarter. If you look at the back half of the year from a revenue perspective, we actually had pretty strong third and fourth quarter last year. So, the comparisons clearly are higher in the second half of the year versus the first half of the year so I do not really view the deceleration of business sometimes is a little bit lumpy quarter to quarter. I think it will be really a continuation of what we have seen for the first half of the year. Michael Schneider - Robert W. Baird & Co., Inc.: Okay and then just maybe some color on the general industrial center, you call that chemical was particularly strong. Can you maybe dive into additional end markets and trends there, up or down and then also geographies because at least investor seem to have the most concerns around that sub segment of your business based on what we read in the headlines?

Sure. [distorted part] so it is a little bit of misnomer that ends up getting classified in general industrial but that is how our systems pick it up when it goes to distribution. So, I think if you look really in each of the sub segment in general industrial which we have about eight different sub segments, the growth was very broad based in all of the sub segments. Building products, diesel engine, waste water, really across the board it was very strong and that was on a global basis, not just in emerging markets but our European business and our US business as well. We had a good quarter in general industrial. Michael Schneider - Robert W. Baird & Co., Inc.: And then were there any particular deceleration or was there a particular deceleration that has occurred in the US general industrial portion?

No, not that we saw. Michael Schneider - Robert W. Baird & Co., Inc.: Okay and then just final question on commercial marine, there is a lot of press about slower shipping trends globally. Do you have or have you seen any cancellations in the order book related to commercial marine or any more cautious commentary from the ship builders themselves?

No, we have not had any cancellations either in new ship construction or any after market activity. It is certainly we read the same press that do you do related to the commercial marine and we do a fairly aggressive betting out in that particular market on the look out for any type of change in activity level or cancellations. But so far, we have not seen any. Our customers tend to be large European ship owners and we are selling through very large, well capitalized shipyards so as of yet, we certainly have not seen any change in the order rate or any cancellations.

We will go next to Shannon O'Callaghan with Lehman Brothers.

Good. Maybe just help us out with a little bit of the lumpiness as we think about it for the rest of the year. Organic growth first quarter 2% now 18% and you mentioned some projects maybe shifting from 3Q to 4Q so I mean could we be seeing that kind of variability in the organic growth pattern in the second half too or what kind of variance might we see?

Yes, I think from a second half perspective in total, we feel very comfortable with the guidance overall. The question is whether hit from the third quarter or the fourth quarter and that is just a factor of our project-related business that tends to move around a little bit on delivery dates. I think at this point we feel pretty comfortable about the overall growth level in the second half of the year.

Okay but it feels like fourth quarter is going to be the strongest productivity base on what you are saying.

Yes and that is our normal seasonal pattern. Fourth quarter is definitely the largest overall quarter of the year for us, year in year out.

But even on the growth year-over-year perspective, it sounds like more maybe comes in the fourth based on the project push-outs you mentioned?

Yes, potentially.

Okay.

Yes, that is the way we could see that.

And then on the gross margins, you mentioned the system's impact, I mean can you either size that for us or give us a sense I mean get a really strong gross margin in the first quarter or the last quarter, can you talk through the fact that it is there and how are you thinking about that for the second half?

Sure, yes. I mean that is related to very large systems business which again tends to be a little bit lumpy business and there is a higher buy out content on those very large systems so the gross margins tend to be a little bit lower than our average gross margin and the fact that they are very large sort of excuse the mix number a little bit. I think for the balance of the year, from various margin perspective we should see some moderate increase in our gross profit in the back half of the year.

I think the situation somewhere at the sale, we had very good mix and positive impact in the first quarter and I think the blending of the two quarters was more indicative of that are underlying rates.

How is the acquisition environment out there and how are you guys thinking about progressing towards that goal?

Sure. Certainly, acquisition is a big part of our growth strategy in building the business and we are actively looking at transactions right now, the pipeline seems to be pretty good. So, I think well certainly I will not comment specifically on any transactions. At this point, we continue to see pretty good activity in the M&A market in our sector.

And we have a follow up question from Jeff Hammond, Keybanc Capital Market.

Can you just speak to how you are seeing price in the quarter on a go forward basis and how are you thinking about working capital source use for a full year basis?

I think, on the price question Jeff, I think we continue to be pretty successful at passing along raw material price increases in the marketplace given the engineer to order type of business that we have. We continue to be pretty effective in passing price along. On the working capital, I think we certainly have a pretty big buildup in the first half of the year particularly on the inventory side. We will certainly convert a fair amount of the inventory receivables in back half of the year. We tend to be more working capital positive in the first quarter of the year is all that as the receivables are collected but we will see certainly a reduction in the inventory in the back half of the year.

And it does appear there are no further questions at this time.

Thank you for joining us this morning. I guess that ends the second quarter call. We will speak to you again at the end of the third quarter. Thanks very much.