Greetings and welcome to the Lincoln Electric Q2 2012 financial results conference call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) It is now my pleasure to introduce your host, Mr. Vince Petrella, Chief Financial Officer for Lincoln Electric. Thank you Mr. Petrella. You may begin.

Thank you, Jesse and good morning to you all. Welcome to Lincoln Electric 2012 second quarter financial results conference call. We released our earnings this morning prior to the market’s open. Additional copies are available on the Lincoln Electric website or by contacting our Investor Relations office. Lincoln’s Chairman and Chief Executive Officer, John Stropki will start the discussion this morning and provide commentary on the quarter. Also, joining the call today is Chris Mapes, Lincoln’s Chief Operating Officer. Chris will provide color on the region. After Chris makes his comments I will give you some more detail on the numbers. A PowerPoint presentation is part of today's discussion and is available on the Lincoln website under the Investor tab as part of today’s webcast. The presentation will also be posted along with a replay of today’s webcast on our website later this afternoon. But before we get started, let me remind you that certain statements made during this call and in our discussions may be forward-looking and actual results may differ from our expectations. Actual results may differ materially from such statements due to a variety of factors that could adversely affect the company's operating results. Risks and uncertainties that may affect our results are provided in our press release and in our SEC filings on Form 10-K and Form 10-Q. Now with that, let me turn the call over to John Stropki.

Thank you Vince and good morning everyone. We are pleased with the overall financial results for the quarter. Q2 of 2012 marked the second consecutive quarter of record sales and our operating results were very solid especially given the ongoing economic challenges in many of our key markets. The ongoing commitment to our 2020 vision and our long term strategy continues to driver our results and position the company for continued success. The strong contributions of our global workforce resulted in improved operating performance, increased sales, improved overall profitability and strong operating cash flows. We are very pleased with the overall quality of our earnings and results, Vince will cover shortly. As Vince mentioned at the beginning of our call, Chris Mapes has joined our discussion today. Last Friday, we announced that Chris will succeed me as President and Chief Executive Officer of Lincoln. I will remain as Chairman with a new title of Executive Chairman. This leadership transition will be effective December 31 of this year and it is a direct result of mine and the board’s conscientious focus on developing a deep talented and experienced management team for the company. We believe, we have the strongest and the best global team in our history as a result of our ongoing commitment to hiring and developing the best people in our industry. As COO and as a Director, Chris has demonstrated outstanding global leadership skills, broad strategic insights and significant operational expertise. The Board thoroughly evaluated Chris's qualifications as a director candidate before he joined the Board in 2010. Many of the trades that made him an outstanding Board candidate are also the same trades that the Board and I look for in a CEO. I will be working closely with Chris into the next year to ensure a…

Thank you Chris. Our second quarter 2012 financial results reflects a significant quarter-over-quarter improvement in operating earnings. Consolidated sales were up about 6% and operating income improved to $96 million. The second quarter also represented our 13th consecutive quarter of sales growth. Incremental operating profit margins excluding special items were up 42% in the quarter. The high incremental margins are attributable to an improved sales mix as well as our efforts to pair less profitable business, particularly in Europe and Asia. On a consolidated basis and compared with the second quarter of 2011, volume increase reported sales by 2.1%, pricing increase sales by 1.6% and acquisitions contributed an increase of 6.3%. Foreign currency effects decreased sales by 3.6%. Second quarter gross profit margins increased to 30.2% compared with 28% in the comparable prior-year period. The increase from gross margin resulted from improved pricing and favorable sales mix. The quarter included a $1 million charge to cost of goods sold related to a labor law change in Venezuela, requiring increased severance obligations. The quarter also included a $1.4 million charge related to the initial accounting for recent acquisitions. SG&A expense for the quarter was $127.7 million or 17.2% of sales compared with $115 million or 16.5% of sales in the prior year. The increase from SG&A expense was driven by higher bonus accruals, increased cost from acquisitions and higher spending related to employees compensation. Foreign currency translations decreased reported SG&A expenses by $4 million in the quarter. Operating income for the quarter at $96 million was 12.9% of sales compared to $80 million or 11.4% of sales in the same year-ago quarter, an improvement of 150 basis points. The quarter included rationalization charges, totaling $1.3 million and $1.4 million of charges related to the change of Venezuelan labor laws. As Chris…

Thank you. We will now be conducting a question-and-answer session. (Operator Instructions) Our first question comes from the line of Thomas Hayes of Thompson Research Group. Please proceed with your question. Thomas Hayes – Thompson Research Group: Thank you. Good morning, John. Chris, congratulations on your new position.

Thank you. Thomas Hayes – Thompson Research Group: Just kind of wanted to try to, first on Europe position going into the third quarter, is it a slower quarter, because of vacations? I was just wondering how you guys are thinking about Europe now with the mix of general slowing and the seasonal slowing?

You are exactly right, Tom. I mean, the third quarter in Europe is always the slowest quarter because of the August shutdowns in the western, particularly the southern-western countries in Europe. I would expect that the slowing that we have seen seems to have stabilized, but I think that there is still a tremendous amount of uncertainty relative to the economic and the fiscal stature of the EU and what changes that might present. So, the forecasting of a short-cycle business like we are in under these volatile, political and economic times becomes quite challenging and problematic. I believe that we think we are doing the right things. We are focused on the right segments within Europe, and in those areas that we believe have the long-term future for the company we are strengthening and growing our position. Thomas Hayes – Thompson Research Group: Okay. You guys have done a really good job this year of maintaining pricing and actually growing pricing. Just wondering what your thoughts about being able to maintain that momentum. Like you said, John, as going into a period of a little bit of more pronounced slowing?

We have said that for many, many years that our focus is on the value-added side of our business and our target is the customer that really appreciates the value that Lincoln brings to the equation, and Vince commented and Chris commented that we made significant progress of improving the margins in the quarter and that was a direct result of shedding low-margin business that we don’t put into that category. That will be our focus on a go-forward basis. And if you go back to the comments that I made about the individual market segments where we see very positive, not only current but long-term type of views, those are all value-added segments and that’s where we are going to continue to put our energy and muscle behind.

And Tom, I would just add to that, that certainly with our growth rates moderating and some volume declines in international markets, coupled with the softening that we are all seeing in commodity prices, the rate of price increases will be certainly more difficult moving forward in the short term. Thomas Hayes – Thompson Research Group: Okay. Just one last one, Vince. You had mentioned that you expected benefits in the restructuring of $4 million to $5 million, and we saw $1.3 million in costs associated with that, I was just wondering what your thoughts were in terms of the cost side of that for the next few quarters.

Yes, we will have another, somewhere between $3 million to $6 million of additional costs before we fully rationalize those three locations. Thomas Hayes – Thompson Research Group: Okay, thanks guys.

Thank you. Our next question comes from the line of Walt Liptak - Barrington Research. Please proceed with your question.

Hi, thanks. Good morning, guys.

Hi, good morning, Walt.

Let me ask about Europe, too, and on your comments, I guess on the last question, you said that Europe you thought was now stabilizing. But I wonder if you could talk a little bit more detail about what happened during the quarter, kind of on a month-to-month. You noted Russia or Spain get substantially worse. What kind of colors can you give us on the trend that's been occurring there?

I would just comment that from the first quarter to the second quarter, we saw a significant deterioration in Spain, Portugal in particular. And as Vince mentioned, those are markets where we have a very significant market share. So, obviously we are more directly impacted by that than we would be in markets where we are not as strong. The Russian circumstances, one of us having to move fairly significant plant and relocated into an existing facility that requires significant change in the layout of that facility. And the Severstal business, and I think we commented on this when we bought it at a very important market share, but that it was not hugely profitable. And it has been our focus to shed the unprofitable side of that business as we make the move, and when we complete the move, we will reconfigure our marketing strategy to be sure that we get high utilization and maximize profitability of the newly-configured Russian consumable business. And we are quite optimistic, not only on our capabilities to do that, but also in the important growth that we forecast for that market long term.

Okay. Thanks for that. That's an important thing to point out, because the euro profits look good, even though the revenue was a lot lower than I was expecting. Can you quantify how much of a headwind that Russian relo was during the quarter, in terms of like millions of dollars of revenue?

I would just say that Spain and Russia represented the predominant part of the decline on a sequential basis and year-over-year in our European segment.

Walter, if we look at our core European business and we break that down to the one, the markets, and two, the kind of equipment and consumables that we consider to be normal regular flow of products, year-over-year, for the full year and in for the quarter, those businesses are relatively flat. We got a few markets that are up a little, we got a few that are down, we have a few product categories that are up a little, and a few that are down. And again, if you take Spain and Russia out of that, that would have been the scenario that we see. It's hard to predict that Spain could get any worse than what it is, unless there is total collapse of the euro, and again, while we will have another six months or so in re-organizing this Russian business, I think the prospects for growth in steel and in welding consumables in Russia is very positive because of the high demand in the energy sectors there.

Okay, got it. So, you should see some kind of a sequential improvement out of Russia?

Yes, but I would emphasize just on the Europe sequentials, that the third quarter is almost always weaker in terms of volumes and sales levels than the second quarter, Walt. And it would take – because of the shutdowns in August that almost the whole month of sales are lost in the third quarter on our European segment. So, I wouldn't expect the third quarter of 2012 to be any better than the second quarter, and it’s likely to be a lower quarter because of that seasonality.

Okay. And just looking at sequentials in Europe, the Spain and Russia might have crossed to $12 million in revenue during the quarter, is that the number that you are thinking of?

It was more than that.

Okay. Good. Okay, and that answers the question of, you know, your competitors had better revenue numbers, organic growth numbers in the 7% to 9% range coming out of Europe during the quarter, and that it sounds like you would attribute the difference to this Russia situation, as well as Spain, Portugal?

Yes, I would say that we have a different situation in Russia, Walt, and that our exposure in the rest of the continent may be a little bit different than others in the industry. Spain is one of our biggest markets in the continent.

Okay, thanks. I will get back in queue.

Thank you. Our next question comes from the line of Mark Douglass of Longbow Research. Please proceed with your question. Mark Douglass – Longbow Research: Hi, good morning gentlemen, and congratulations Chris.

Thank you. Mark Douglass – Longbow Research: So, moving on from Europe to Asia, I assume that was incrementally worse than maybe what you are anticipating, can you talk a little bit more about just some of the markets that you saw some pretty declines in Asia-Pacific, and do you think that markets has stabilized as well as or, you know, there is more to go?

We certainly saw a softness in the Asian market across the host of the segments. We certainly feel that we will continue to see some seasonal and cyclical weakness in the ship-building area. We have seen a little softness compared to where we had expected in the automotive segment, but really, I think that the broader execution that we are working on in Asia and specifically China, is ensuring that we are positing the portfolio for the growth that we see in that market moving forward. And certainly, although the general market was down as we expressed in our comment, certainly some of that top line compression was driven from some activities that we had in the marketplace to make some improvements in the portfolio, and we have executed on many of those in Q2, certainly believe that we are positioned for the growth that we think we see in that market moving forward. Mark Douglass – Longbow Research: Would that be a lot of – I know in the past, you talked about – ship-building was really significant, it’s floating, you are trying to shift a lot of your, I don’t say production, but moved more towards end markets outside of ship-building, and is that I get what you are referring to on the product portfolio and market exposure?

Yes, continuing to really expand into some of the other segments, as John mentioned earlier, that have a need and a desire for higher value-added applications for our products, then we are certainly, we believe achieving that in Asia. I also would say that the consolidation of our shared services structure in China, which we have completed in the last several months, we believe strongly, will be an enormous catalyst for us to be able to effectuate business there in that region and globally and more effectively, and the management team there has done a very nice job of completing that for the company over the last few months.

Yes, Mark, to Chris' point, I mean, the work that we have done with the regional headquarters and our ability to import globally produced products to fulfill a much broader segment of the Asian in total, but the Chinese market in particular is really starting to show some good progress. Our exports in China were actually up despite the slowing economic conditions there, and we think that's a direct result of broadening our distribution to open up our global portfolio to a large group of Chinese specific distributors, who serve an important market segment there that we never really participated in. Mark Douglass – Longbow Research: Okay. Would you offset the product lines you are moving towards, are more profitable than the ship-building as well, is there a mix benefit?

I think, there is a mix benefit from two perspectives. One, there really is no ship-building activity, it comes to almost a complete standstill. I mean, there are some shipyards that are fulfilling past contracts, but if you look at the new contract portfolio for shipyards, it's non-existent. So, that was always a very challenging portfolio, and we made a very conscious effort to move away from that, which we think is good because of your comments that the products that we are going to produce in those facilities will be different products, that will be higher value added than the more generic products that are used in the shipyard segment. And we also believe that the segments that we will be approaching and focusing on will be much more organically growth-oriented than the ship-building industry that will be slow for the foreseeable future. Mark Douglass – Longbow Research: Okay. And Vince, couple of questions, was there any LIFO gain or expense in the quarter than what the consumable equipment mix?

Yes, there was a LIFO credit in the quarter of about $1.4 million, and the mix on machines or equipment versus consumables now is about 65% consumables, 35% equipment, so a slight shift towards equipment. Mark Douglass – Longbow Research: So, consumables were down a little more in the quarter versus equipment, it seems fair?

Both were relatively flat, and actually equipment was up double digits without acquisitions. Mark Douglass – Longbow Research: Okay, thanks.

Thank you. Our next question comes from Liam Burke of Janney Capital Markets. Please proceed with your question.

Thank you. Good morning. John, with the overall uncertainty of the markets, are you seeing acquisition pricing becoming more favorable since it is a big part of your strategy?

I would say that we are seeing the pipeline, maybe a merge with some people who had been sitting on the sidelines. But it’s my experience and we are early in the stages of that that people’s expectations for valuations change very slowly. So that will be an ongoing dialog that we will have to have and will be very much product specific in terms of how we see the long term value and market specific in terms of how we view those markets over the more medium term that will determine valuations, but we remain optimistic and I think that our track record, particularly in North America in the last year with the five acquisitions that we made and all of which are performing very well and ahead of expectations that we are optimistic that that pipeline is going to continue to stay full.

Okay, thank you. You mentioned part of the second half of the year you would expect more product introductions and acquisitions to offset the weakness in Europe or help partially offset it rather. Is Europe a major focus in the product introductions, or are you looking across the board worldwide across all markets?

I would say we look across all markets. The products that are used in different geographies or sometimes different but when we look at all the important segments that we refocus on Energy, Construction equipment, transportation, there is a commonality that goes across most of those segments. In generally, there are global customers that we are focused on. So, an introduction of a product to specifically serve the oil and gas industry would have reach across all of the geographical type of segments because of that commonality. There are some uniqueness in the product developments in Europe, in Asia and North America that are very much market specific and as we see markets starts to soften, our focus would move from supporting existing product lines, by introducing new product lines to give us that opportunity to capture a larger share or may be a shrinking market.

Thank you, John.

Thank you. Our next question comes from Holden Lewis of BB&T Capital Markets. Please proceed with your question. Holden Lewis - BB&T Capital Markets: Thank you, good morning. Congratulations to both Chris and John. It sounds like should be pretty seamless, that’s fantastic.

Thank you, Holden. Holden Lewis - BB&T Capital Markets: I wanted to ask, since we are repeating up the revenue stuff in Europe and Asia pretty well, I would say we can move now on the profit side, you in past downturns you actually sort of printed losses from an operating margin perspective. In Europe, I guess briefly third quarter in 2009, and then Asia of course since you had pretty significant operating losses. Can you just talk about what you have done to sort of improve the profit generating elements of the company? What I am trying to get down to is that volume come down and pricing softens, is it likely that’s going to generate losses, or the progress that you have seen in your margins in recent quarters, suggest that maybe your floor is somewhat higher? Just trying to get a feel for that.

Yes, Holden, thanks for that question. We do believe that we have improved our businesses, particularly in the international arena significantly in all aspects of execution. We have lowered our cost base, we have been impairing costs in both Europe and Asia aggressively. We have aggressively moved to manage our pricing much better with our existing customer base. I believe that the numbers speak for themselves in terms of the quality of earnings that we have delivered in this quarter, in the phase of 17% decline in volumes in Asia-Pacific. We have expanded our margins significantly. Same is true in Europe where we lost about 9% in pure volumes and we still expanded our margins there. So, it’s quite gratifying to all of our teams around that world that we have improved the quality of our business in both Europe and Asia-Pacific. And with that we firmly believe that if we were to have similar downturn to what we experienced in ’08 and ’09 which we don’t at this point foresee that we will have higher trough earnings capability across all of our operations. And again, as a reminder, our trough EBIT operating profit margins in 2009 were 7% on a consolidated basis and we are quite confident that with softening in world markets and the potential eventual natural cyclical decline that we will achieve a much higher trough EBIT earnings ratio. Holden Lewis - BB&T Capital Markets: Okay. One of the things that happened this quarter was that your revenues started coming down in those two regions pretty aggressively, but the pricing seems held up pretty well, when you talk about sequential pricing, whether that begins to soften or whether we are just seeing the affected comps, but achieving the type of margin do you think you can in a weaker environment, does that rest heavily on the ability to maintain price in a weak environment or is that not the primary sort of determinant in how your margins were all clean?

Yes, I would put that at the top of the list, Holden. It’s also how aggressively we are able to take cost out. Certainly, there is a fair amount of fixed cost in any manufacturing model and that’s difficult to pair [ph] down. But, what happens on the pricing line is that certainly the most powerful, determinant of what our margins will be in the down turn. But I would continue to emphasize that important factors driving that pricing capability are one, what volumes are in the industry in general, what level of capacity utilization we are experiencing, then finally, those two factors drive the third, which is what’s happening with raw material prices, and certainly as you follow those prices, you can see around the world the import inputs of steel and other commodities are falling and they are led by China and to a lesser extent Europe and not quite flowing through in earnest in North America. But as raw material prices fall in the future, that will certainly put pressure on pricing and the ability to hang on to that pricing is certainly a key determinant of what our margins will be in a softer environment. Holden Lewis - BB&T Capital Markets: Okay. And just the last thing on that is, you referred sort of the mix, you just tell us exactly what about the mix is more favorable versus how it has normally been in boosting the margins?

Well, our equipment business grew by over 10% and our consumables business was relatively stable and most of the business that we share was in consumable that was marginally profitable. So that mix certainly helps our margin profile.

And I would add to that, Holden, again, we talked about the particular market segments that we are strong, again oil and gas and energy, those are generally very product specific high margin kind of products and we expect that trend of the greater participation and that mix as well as the big demand that we are seeing now in the automation side that we talked about which is also a very good margin, just a continue as people look to shed product cost, offset shortages of skilled workers and improve quality by using automation as a tool. And Chris mentioned specifically the Wayne Trails acquisition, that is a very good margin business and it now has a pretty significant backlog in its portfolio where we see demand only increasing as we worked to integrate that business into Lincoln and then we will offer up a broad Lincoln product portfolio into their portfolio. Holden Lewis - BB&T Capital Markets: Okay. Great, thanks guys.

Thank you, Holden.

Thank you. Our next question comes from the line of Steve Barger of KeyBanc Capital Markets. Please proceed with your question.

Good morning, gentlemen.

Hi, Steve.

Just to follow-up on that last conversation, Vince. As you look at 3Q and we are a month into it and you are looking at volumes, utilization, raw materials. Is it fair to say that you expect pricing will remain positive in the back half outside the US or I guess even inside the US, or is there some risk to that?

Well, our overall consolidated price increase on a year-over-year basis was 1.6% and North America led the way in the core welding business with a 3.4% increase. That was largely in line with what our expectations were. I would say with what we are seeing in raw material costs right now and what we are forecasting into the rest of the year that these increases will abate in the last half of the year.

Abate towards, I guess towards zero or are you still thinking it remains positive or are things moving quickly in the marketplace right now?

Well, certainly, raw material prices are in places like China are declining fairly rapidly. So, it will be difficult to equate positive pricing in the last half of the year.

Got it. And from a competitive standpoint, are the bigger more sophisticated players remaining rationale at this point?

I don’t know that I can comment on our competitors’ rationality, but there is nothing notable that I can share with you in terms of irrational behavior at this point in time.

That’s fair enough.

I would also, Steve, just make a follow-up comment to that. Certain markets the global international players have a very significant share of the market and you have a certain dynamic that’s driven by that. There are other markets, Asia in particular, where there is no global international player and there are a lot of local players and that market dynamic is obviously significantly different that you would see in a mature consolidated market like North America.

Understood. To that point are you seeing things change more rapidly in Asia right now, or are some of the competitors getting more aggressive given some of the volume declines?

Well, the market has always been very very competitive. The customers always are very short term cycle buyers, they follow steel pricing and they move, they feel steel moving up and down the curve. I wouldn’t say that we are seeing any significant shift in terms of how that market evolves and I guess. As we talked earlier, we think we know where we want to play and how we are going to play and I think we will be pretty consistent with that.

But I would emphasize again, Steve, Asia-Pacific really focused on China is the most stressed geographical area because of the highest volume declines in the industry, as well as the biggest raw material price declines. So those coupled together make that the most challenging markets that we face today.

Okay. And earlier you were talking about 3Q being lower than 2Q from a top line perspective, in Europe you do shutdowns, but just as you look at your order book, I know it’s short cycle, but should we be thinking about that general pattern for a consolidated sales, given how end markets are reacting, would you expect revenue to be down sequentially?

Well, that’s a fairly a comment as well. The third quarter tends to be a lower volume in revenue quarter than the second and in Europe is simply the most pronounced of any region in terms of a quarter-to-quarter decline.

Okay. In North America, specifically, you are kind of facing a tough revenue comps. Should we be thinking that North America sales can still see double-digit organic growth based on what you are see right now is that moderating towards more single?

I won’t be able to make that kind of forecast at this point in time, but certainly our growth rates are moderating and double-digit would be a very fine result for us in the third quarter.

Got it, thank you.

Thank you. Our next question comes from the line of Greg Halter of Great Lakes Review. Please proceed with your question.

Good morning, guys.

Hi, Greg.

Relative to the pension situation, any indication on how many takers you have for that program so far?

It’s still early, Greg and the deadline for responding is the end of August and so, there is a fairly low percentage of the total available participants that can select this option that have responded to date. So, many of the responses are likely to common in august and even perhaps the later part of August. So, there is again a small percentage of elections that are in right now. It’s not in our view inductive or what might even happens. So, at the end of the third quarter we will have that count and we will be able to give you a final result in the third quarter call.

Okay. What was pension expense on the P&L in the quarter?

Well, the expense was about $11.8 million in the quarter as compared to about $8.8 million in the prior year. So we had $3 million increase in pension expense in the quarter on a year-over-year basis. As I have talked in previous calls, that’s split between COGS and SG&A, but the SG&A cost increase for pensions was $1.3 million.

Okay. And you would expect that figure assuming that you have 100% or anywhere near that $11.8 million number coming down, assuming you gave a large portion that would take the offer?

Well, it won’t necessarily come down, but it would be less volatile in the future.

Okay. Do you have an estimate on how much of the consumable business that you refer to was shed in the quarter and if there is more of that to go?

We don’t have an estimate of the amount of consumables that were shed in the quarter, but we think that we are not completely through that process and we will continue to see that shedding during the remainder of this year. We are still in the process of consolidating those two Russian plants, so we expect there to be a continual pairing there. We are not through yet in Asia-Pacific and China, in particular, and trying to reposition ourselves towards more profitable segments of that market, shedding less profitable parts of the business. So I think we see that continue through the last half of the year and probably taper off in the first half of next year.

Okay, thank you.

You are welcome.

Thank you. (Operator Instructions) We do have a follow-up question from the line of Walt Liptak of Barrington Research. Please proceed with your question.

Hi, thanks. Sorry, everyone, I realized already (inaudible). I want to ask about the share repurchase, Vince. It looks like you are doing about $20 million per quarter last two quarters. With your stock down today, can you just refresh us and how much is left and I guess what your aspirations are with the repurchase?

Well, we are certainly the buyers when the window opens at the end of this quarter. We have a fair amount of shares available, over 3 million, so there is no shortage of shares available on existing board authorization and even that is in my view isn’t limiting, if we do run out, we will ask our board to reauthorize additional shares in due course. We will continue to be the buyer in the last half of this year. As you can see we have ratcheted up our buying in 2012 and I would expect that to continue into the future.

Okay, but the program right now is not $20 million per quarter, it could be whatever you think is appropriate?

Yes, that’s what we think is appropriate. That was our number for the first and the second quarter, and that’s not a bad assumption for the last half of the year. But we remain open to increasing that amount if we see fit.

Okay. I just wanted to get a couple ones on the acquisition. In the press release you had $50 million in revenue, is that LTM or is it more with that contract that you talked about on this call?

No, that’s total acquisitions. Chris mentioned that we had done five deals in North America in the last, just shy of a couple of years. So, it not only includes Wayne Trail but it also includes our acquisitions that were made in last year’s second and third quarter.

Okay. In the press release from May 17, you got $50 million for Wayne Trail’s revenue?

Right. That was the latest 12-month Wayne Trails revenue.

Okay, did that include the $20 million contract in it?

No, that hasn’t started yet.

Okay. So over the next 12 months it is going to be something in excess of 50 million?

Yes, Wayne Trails sales will be higher than 50 million in the next 12 months.

Okay. And the purchased price from your cash flow looks like 27 million?

That’s not the complete purchase price, Walt, because there are some holdbacks. The total purchase price was a little over $31 million.

Okay. And you mentioned, John, I think mentioned that the profitability is being very good. Is it above Lincoln margins, operating margins?

It is above Lincoln’s operating margins. Remember we did have some initial accounting charges of $1.4 million that came through the quarter. So, once that all gets cleaned up, we think it will have a very good margin profile.

Okay. And this is going to get reported in North American segment?

Yes, it will be in North America.

Okay. Are the margins above North American margins?

No, I am not going to give you any more detail on that, Walt.

Okay. Alright, fine. Thank you.

Thank you. Our next question comes from Stanley Elliott of Stifel Nicolaus. Please proceed with your question.

Good morning. Thanks for taking my question. Real quick on the acquisition side, certainly been very active this year. Is there a trade off with some of the restructuring things that you are going to be doing now as opposed to continue with the momentum on the acquisition side in the back half of the year -- how do you think about that?

I don’t know that I see a trade off, Stanley. We are going to continue to execute our strategy and improve our business and one of those strategies is buying companies that fit our product or geographical mix requirements and the second one is continually improving our cost position and the operations of our existing businesses. We don’t see those as at all related. We will do both and we will do them both concurrently and we think we can do both of those well concurrently.

Last question from me. On the inventory on a year-over-year decline, was that more finished goods, raw materials, a little more color on that please?

Well, it was across the board. Some of that was translations as particularly the euro weakened significantly it translates into lower inventory dollars, but it was largely across the board in terms of the effect on categories of inventory.

Great, thank you very much.

Thank you. Our final question today is a follow-up question from the line of Holden Lewis of BB&T Capital Markets. Please proceed with your question. Holden Lewis - BB&T Capital Markets: Thank you. I just wanted to touch base on sort of expectations for production and any risks you might have from under absorption, obviously, things that sort of cascaded lower pretty quickly here. Do you feel like your import levels are flat, but do you feel you need to adjust your production going forward to sort of the new global realities, or how are you viewing sort of your inventory and production levels?

That’s a good question, Holden. We are adjusting our production levels to meet current demand. And certainly lower product levels will have ultimately an impact on the absorption of those fixed overheads, so that will certainly result in a headwind to our business going forward, but we will aggressively manage our cost down to meet current productive needs. Holden Lewis - BB&T Capital Markets: At current levels of demand how long do you think you need to under produce demand to get inventories where you sort of envision them being, is it a one quarter sort of hit or let me say, a couple of quarters all other things being equal?

We are managing our inventory levels right now and to current demand and I wouldn’t say there is a period of adjustment that’s required, Holden, over the next quarter or two, it’s happening currently. We have reduced, based on the previous question, we have taken down our finished goods inventories in line with what our expectations are and raw, equips have come down to some extent as well. So, I wouldn’t say there is a significant adjustment period to come but we are continuing to adjust our production levels in all of our plants around the world, particularly in the slower regions to meet existing demands. So I wouldn’t say there is any period of adjustment from this point on.

I would add, Holden, we still have certain markets, North America being a good example, where our year over demand, the numbers are still positive and depending on what happens in the rest of the world and how that might impact the North American export business, we still view the second half of the year to be reasonably positive for North America. Holden Lewis - BB&T Capital Markets: Okay.

You are welcome, Holden.

Jessie, is that it?

There are no further questions at this time, Mr. Petrella.

Thank you very much and thanks for joining our call today. We very much look forward to talking to you at the end of October and reviewing our third quarter operating results. Thank you, very much.

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.