Good morning, ladies and gentlemen. And welcome to the MSA first quarter earnings conference call. At this time, all the participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Mark Deasy. Mr. Deasy, you may begin.

Thank you, Kim [ph], and good morning, everybody. As Kim said, I’m Mark Deasy, Communications Director. And on the call with us today are Bill Lambert, President and Chief Executive Officer; Dennis Zeitler, Senior Vice President and Chief Financial Officer; Joe Bigler, President of MSA North America; and, Rob Cañizares, Executive Vice President and President of MSA International. Our first quarter earnings release was issued this morning at 8:30, and we hope that everybody has had an opportunity to review it. The release is posted on the home page of the MSA Web site, which is at www.msanet.com. This morning, Bill Lambert will provide commentary on the first quarter. He will be followed by Dennis, who will review our financials. And after Dennis' comments, we will open up the call for questions and plan to adjourn by about 10:45. Before we begin, I need to remind everyone that the matters discussed on this call, with the exception of historical information, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements, including without limitation, all projections and anticipated levels of future performance, involve risks, uncertainties and other factors that may cause our actual results to differ materially from those discussed here. These risks, uncertainties, and other factors are detailed from time to time and our filings with the SEC, including our most recent Form 10-K, which were filed on February 26, 2009. We strongly urge you to review all such filings for a more detailed discussion of such risks and uncertainties. Our SEC filings can be easily obtained at no charge at www.sec.gov, MSA's Web site, and a number of other commercial Web sites. That concludes our forward-looking statements. So at this point, I will turn the call over to Bill Lambert for his comments on our quarter. Bill?

Thank you, Mark, and good morning, everyone. Let me begin by saying thank you for joining us today in our conference call and for your continued interest in MSA. Presumably, all of you have seen our first quarter earnings release and have our financial figures with all comparisons corresponding to the equivalent first quarter of 2008. In our last investor’s conference call on February, I said that MSA was not immune to the effects of the global recession and that the recession was most definitely having an impact on our business, particularly in markets where you might expect to see it have an impact; markets such as construction, industrial manufacturing, mining and energy sectors, the challenges of reduced US military spending, and even a portion of our fire service market that is dependent on local municipal funding. In these markets, we are feeling the effects of higher unemployment, reduced capital spending, and tighter municipal fiscal policies. Our first quarter results show the impact of the ongoing economic recession and its effects on our business. Consolidated sales in the quarter were $218 million, decreasing $48 million or 18% over the same period a year ago. However, it's important to keep in mind that over half of this decrease was due to weakening foreign currencies of this quarter versus a year ago. MSA gross profit as reported, decreased $23.4 million or a 190 basis points when expressed as a percent of sales due to the decreased sales of higher margin product lines. A greater percentage of total sales coming from Europe and international, which tend to be lower gross margin segments, and due to challenges associated with increased unabsorption on our factories due to lower volumes and through play. Reported net income therefore, was $8.8 million decreasing – excuse me, reported net…

Thank you, Bill. Good morning, everyone. I would like to give you some further insight into our first quarter performance and comments on the balance sheet and cash flow statements. Additional information will be available later today when we file our Form 10-Q with the Securities and Exchange Commission. As Bill mentioned, sales in the first quarter of 2009 were $218 million. Compared to the first quarter of 2008, sales are down 18% with decreases in each of our three geographic segments. However, when you adjust our sales to the relative strength of the US dollar compared to the first quarter of 2008, our sales are down 10% in total; which is a combination of North American sales down 24%, Europe up 15%, and international up 6%. By markets, the fire service was down 17%, military down 1%, and industrial down 23%. Adjusted for currency rate changes, fire service was down 14%, military is up 2%, and industrial is down 11%. As I’ve mentioned, North American sales are down 24%, composed of a 35% decrease in the fire service, a 13% decrease in military, and a 21% decrease in industrial sales. This is a particularly tough quarter for comparing fire service sales, as the first quarter of 2008 was very strong with the implementation of the new NFPA standard. Our international sales were down 15% this quarter. Although fire service sales are up 62% and military was up 28%, our industrial sales were down 27%. Without the changing currency rates, our international sales are up 6% in total; 84% for the fire service, 45% from military, but down 8% for industrial. European sales are down 6%, compared to the same quarter last year, being down 5% in the fire service, up 25% in the military, but down 17% in industrial.…

Thank you. We will now begin the question-and-answer session. (Operator instructions) Our first question comes from Edward Marshall from Sidoti & Company. Please go ahead. Edward Marshall – Sidoti & Company: Good morning, guys.

Hi, Ed.

Good morning, Ed. Edward Marshall – Sidoti & Company: The voluntary retirement incentive program that you announced in the press release of $5 million annual savings, what is the expected savings this year?

That will be $400,000 a month, Ed. So you saw about $400,000 of it in the first quarter. Edward Marshall – Sidoti & Company: Okay.

And you are going to see $1 million – these are pre-tax numbers, $1.2 million each quarter thereafter. Edward Marshall – Sidoti & Company: Okay. And then we talked about Europe and you talked about the fact that you feel that sales are going to be pressured in going forward. You said Eastern Europe. Now can you remind me whether it's Eastern Europe or Western Europe that has seen these sale declines?

I think we're seeing it in both areas, Ed. France where we're seeing a definite slowing of orders in Western Europe coming out of France. We're seeing Eastern Europe – we’re seeing a lot of opportunities in Eastern Europe. They remain, but what we're affected by in Eastern Europe is the weakening of those currencies versus the euro, intensifying price competition in those particular markets, and some delays in some of the purchases, either by distributors or by governments in some of the major projects, delays in those decisions being made. Edward Marshall – Sidoti & Company: Is the margins that you see in both Eastern and Western Europe, are they even? Or is there one that's favored and a little bit higher or a little bit lower from margin perspective? Rob Cañizares: This is Rob Cañizares. Margins in Eastern Europe are slightly lower than in Western Europe. And because of the exchange rate impact of the Eastern European currencies, of course, that’s a lot of price pressure that we're feeling. Edward Marshall – Sidoti & Company: I see. And then can you talk about the trends that you saw in the first quarter from January to March in both North America and a little bit of international as well? You can touch on both, and did they improve? And if you would also discuss kind of April and the sales trends that you see there so far this year?

Well I don't think we'll talk much about April or the second quarter, Ed. Edward Marshall – Sidoti & Company: Fair enough.

I could certainly tell you a little bit about what we saw happening in the first quarter. Late last year, we saw a fairly rapid reaction to the economic downturn as distributors initiated de-stocking initiatives within their own companies to improve or maintain their cash flow aspects. We saw that happen fairly quickly in November and December of last year and get to a point with that respect that sort of leveled off in January and February. However, what we started to also seen in January and February though, is a worsening employment picture. And we have continued to see employment decreased, unemployment increased in many of the markets that we served. So, I think that as – I do not see things accelerating any longer, but I certainly, and as I indicated in my comments, don't see things turning around in any kind of a hockey stick fashion and would expect that we would continue to see this in the second and third quarter of this year. Edward Marshall – Sidoti & Company: You have mentioned distributors and there's an awful lot in de-stocking and there's been an awful lot of discussion across the board about the anticipation of a re-stocking in distributors. With the conversations with the distributors that you worked with, what's your feel there? What's your sense?

Joe, I'll let you answer that from a North American perspective.

On our North American perspective, I think most of the de-stocking activity with major distributors in North America has fairly well been completed. And what we're seeing is, as activity fix up at the unusual level, that does translate very quick into manufacturers' orders.

Hence, our supply chains are lot tighter now than they were, say five years ago or in any previous recession. I think what we've noticed different about this recession is just how tight the supply chains are. And so as end user demand, i.e. unemployment, increases or end user demand decreases. That goes through the distributor quickly and it affects us very quickly. Conversely, as some of these stimulus plans begin to have an impact later this year, and knock on wood that will happen by the fourth quarter of this year, we would anticipate or hope to see some requests coming from our distributors to ramp up in that needed way. Edward Marshall – Sidoti & Company: So it's fair to say that if there's not enough turning or recovery in the order rates, you know those still run relatively lean and look to a managed working capital at adjusted time order?

I believe that's exactly correct. Edward Marshall – Sidoti & Company: Okay. And in my final question on the ACH where we discussed the ID/IQ of the two-year program here, the second quarter, is there a lapse in production here? I feel like I remember the June CA – a lapse from where the ACH contract that you had rolled off and the new one starts, and then what the costs would be associated with that?

Let me answer quickly now and I'll look to Joe to add a little bit more color to that answer. But yes, there will be a lapse. We will finish the order contract in May. I'm sorry, I looked to this month already and saying it's May, but we will end that contract. The deliveries on that contract in May and we will not begin to produce under the new contract – that $45 million two-year ID/IQ contract until sometime in July. Joe is there anything you like to add?

No. I think that's the key. We'll probably look at a 45 or 60 day delay in terms of shipments between the ending of the initial contract at the end of May and the beginning of the new contract by some time in July. That's our plan. Edward Marshall – Sidoti & Company: I understand that you don't give guidance there. Any idea what kind of cost would run through the system and what kind of impact that will have to the bottom line?

I don't think we want to comment on that. Edward Marshall – Sidoti & Company: Okay. Fair enough. Thank you, guys.

Thanks, Ed.

Our next question comes from Keith Kostek [ph] from Morgan, Keegan. Please go ahead. Keith Kostek – Morgan, Keegan: Hi. Thank you for taking my question. Your tax rate was better than it's been. Do you think you can sustain about this level for the rest of the year? How do you see that?

Let me explain a little bit Keith, as to why it's as different as it was – as it is. First quarter last year there was no warranty tax credit, so we couldn't take – took pretty good any benefit from that. We had a special one time charge in Germany because the Germans imposed a tax on retained earnings last year. And we had certain affiliates that were losing money and we could not take the tax benefits from those losses for accounting reasons. So we had a lot of thing going against us. All three of those are gone in the first quarter of this year. And in fact, some of the companies that have historically have lost money, are now making money. And therefore, we can account for that without having the effective – to have an effective tax rate on it. That's why we come out of 33% this quarter. We talked about this a lot yesterday and I guess it’s fair to say that the rest of the year ought to be somewhere in the maybe the 34% to 35% range. I don't want to be as optimistic as the first quarter, but it will not be a tie that it was last year. Keith Kostek – Morgan, Keegan: Okay. That helps. And then also, I guess you have the $900,000 currency gain. For second quarter do you see another gain or any outlook on that?

I'll give you an exact answer to that as soon as you tell me what exchange rates are in June 30th. Keith Kostek – Morgan, Keegan: All right. Fair enough. But would you just – a general trend from what's happening or–

At this point we continue to share gains on that line. Keith Kostek – Morgan, Keegan: Okay. Thank you.

You're welcome.

Thank you.

Our next question comes from Richard Eastman from Robert W. Baird. Please go ahead. Richard Eastman – Robert W. Baird: Good morning.

Good morning.

Hey, Rick. Richard Eastman – Robert W. Baird & Company, Inc.: I just like to ask a couple of things, maybe some clarifications. Dennis, when you gave the sales change by end market in reported dollars, fire service, military, industrial, could you just repeat that?

For the total business, the fire service – oh, in reported dollars. Richard Eastman – Robert W. Baird: Yes. I get the LC number.

Okay. I just want to make sure that I get the– Richard Eastman – Robert W. Baird: And then, I was also just going to ask you under gross margin, Europe, international versus North America. I think you separated those two.

Let me give you the answer to your first question. Fire services are down 17%, military is down 1%, industrial down 23%. Richard Eastman – Robert W. Baird: Okay.

In reported dollars. Richard Eastman – Robert W. Baird: Yes. I get it.

And now the second question was gross margin between North America and the rest of the world? Richard Eastman – Robert W. Baird: Yes. Against the 38% consolidated.

Actually, gross margins were – and your question is? Richard Eastman – Robert W. Baird: I thought you said margin in North America was 40 – whatever you said. I don't know.

40%. That was the global number. Operating – gross cost was 38% this year, 40% last year. But that's the global number. Richard Eastman – Robert W. Baird: Okay. I didn't catch that. I thought you distinguished gross margin by region. Okay, all right. And then Bill, given all the cost actions you've taken here in the quarter, and you know fourth quarter into the first quarter, excluding the charge, do you see that the operating expense number, kind of SG&A, let me put it at SG&A, how does that look for the balance of the year in dollars? Does that come down more, or will there be some inflationary items in there?

Yes. I’ll do that one, Rick. I did some doodling on that. There’s no inflationary effect. They are all practical purposes. No salary employee in North America is getting a raise this year. There will be raises outside the US but the pay cuts that are being impacted plus very little inflation that we have to worry about. And for example, the voluntary retirement program wasn’t really effective until March 1st, so we only have one month of that in the first quarter, whilst three months over in the second. Effective February 1, we had another month of expense. We only have one month of benefit in the first quarter. We’ll get three months of benefit every quarter thereafter. The salary cut program will only get one month of benefit in the second quarter, and then three months of benefit in the second half. Same thing with the 4 – we suspended our 401-K match. That was only one month of benefit again in the second quarter, and then the full benefit in the second half. Richard Eastman – Robert W. Baird: Okay.

So what it comes down to, we will continue to see decreases on absolute SG&A expense, second quarter to first quarter. And then by third quarter, we’ll have the full benefit of the reduction. Third quarter and fourth quarter all look about the same and they both should be less than the second quarter. Richard Eastman – Robert W. Baird: Okay. All right. That’s really helpful. Thanks. That seemed to be the trend. And then one just last thing. Bill, if I look at the first quarter and I look at the segments whether is geographically or I look by end market, and I’m thinking of your revenue line being called at $219 million. Are there any end markets here that you would anticipate, should improve sequentially? Again, I’m struggling a little bit. Industrial seems for the balance of this year to be pretty much locked in. We get some pricing competition in Europe. Military flattens out here in this run rate for the most part. And fire service always a bit of a wild card, but again with the AFG budget slightly reduced this year, it’s hard to see some up tic there. So how do you think that your sales line – just qualitatively as you run through the year?

Qualitatively, Rick, I would agree with you. Richard Eastman – Robert W. Baird: Yes. All right, well that’s good. I don’t need much more color than that. Thank you.

Thanks, Rick.

Our next question comes from Greg Halter from Great Lakes Review. Please go ahead. Greg Halter – Great Lakes Review: Good morning, guys.

Good morning. Greg Halter – Great Lakes Review: I know in the release you mentioned the careful watch over capital spending restrictions. What is your budget for 2009 now?

For CapEx, it’s about $28 million. That’s the budget. We don’t expect to spend that much. Greg Halter – Great Lakes Review: Okay.

Last year we spent a little over $40 million. Greg Halter – Great Lakes Review: And I don’t know if you gave the cash flow from operations figure?

No, but I can. Greg Halter – Great Lakes Review: That’ll be great.

Cash flow from operating activities at $23 million. Greg Halter – Great Lakes Review: Okay. So that compares against a use of $6 million a year ago, correct?

Correct. Greg Halter – Great Lakes Review: And anything happening with the insurance receivable? And can you comment on what the dollar amount is currently?

Yes, it went up $10 million since the end of December. So we’re now at $70 million versus $60 million. Greg Halter – Great Lakes Review: And the cases still continue to move along?

Our next significant legal event isn’t until July when we actually have a hearing with the judge here in Pittsburgh. I don’t expect that we’ll see anything of any significance in the second quarter. Greg Halter – Great Lakes Review: Okay. Thank you.

(Operator instructions) At this time, we have a call from Walt Liptak from Barrington Research. Walt Liptak – Barrington Research: Hi. Thanks, guys. Walt Liptak with Barrington.

Hey, Walt. Walt Liptak – Barrington Research: Okay, just a couple of quick ones. On the Fire Grant Program, can you talk a little bit about the money that’s flowed from last year and the timing of the new program?

Yes. This is Joe, Walt. As far as the 2008 dollars, just about all of the 2008 funding is now complete. As far as the 2009 dollars, it equates to about $565 million. And the application period was delayed. It just opened for the 2009 funding on April the 15th. So if you take that April the 15th date and really extend that through the process, we should see money actually flowing into the municipalities and into the fire departments. So hopefully, sometime in that September, beginning of October timeframe. Walt Liptak – Barrington Research: Okay. So we’ve got a lap from now until September for that fire grant money?

In comparison to last year, the money really started to flow right at the beginning of July. I think the first release was right around July 5th. So there’ll certainly be a 60-day delay because of some bureaucratic delays in opening up the application period not until April 15.

But Joe, is it safe to say what we’re hearing is that the government is viewing these kinds of competitive programs as some form of stimulus. And so they are trying to get this money out into the economy just as quickly as possible. So if there’s some optimism, we could hope that decisions would be made to release this money quicker as opposed to slower as they did in years past.

Correct. Walt Liptak – Barrington Research: Okay. Okay, that’s good. I apologize. I got on call just a little bit late. Timing on the IOTB awards?

Yes, the IOTB is still being reviewed by the government. And at this point, we expect to hear a decision from the government during the month of July. Walt Liptak – Barrington Research: Okay. And then last, I think a number of years ago when they had the SARS outbreak you saw a bump in some of your sales. I wonder if you’re seeing any distributor build from concern over swine flu? And then I’m just thinking what your percentage of sales is from breathing apparatus?

Well Walt, this is a situation that we, and I think everybody else, is monitoring very closely. And while there might be some opportunity for us, I really think it’s important for me to level-set some expectations relative to that question. It comes up a lot. First of all, disposable respirators, sometimes referred to as paper masks and other masks that we see when we watch the news on the evening, these disposable respirators are not a major product line for MSA. Nor is it a particularly high-margin business for MSA. And aside from maintaining some capacity that allows us to serve our retail channels, we made this strategic decision a few years ago to, in effect, exit the industrial side of this business because primarily of the liability risks associated with this particular product line. This is the single greatest reason I think why we see that masks could be in short supply. Our products warn that masks like the N-95 respirators that are approved by the government do not provide universal protection against flu viruses. Now they could help to control the spread of flu, but they do not provide universal protection against it. But when we balanced that against the potential for lawsuits coming from individuals who contract the flu while wearing the masks, even though they probably contracted the flu through hand-to-mouth contact or by some other means, we view that risk and the potential for lawsuits is simply too great. It’s a somewhat complicated issue, I’ll tell you that. But until Congress and the administration provide manufacturers with some sort of protection against litigation, you are not going to see MSA focusing on this part of the business. Through organizations like the ISEA, The International Safety Equipment Association, of which we are a member, and most other safety equipment companies are members, we’ve been actively attempting to get Congress and the administration to make changes and address the need. But it’s been to no avail. Walt Liptak – Barrington Research: Okay.

So looking at our current situation, our highest priority right now with these types of masks is to use our inventory to protect our own employees in regions where the flu threat is elevated so that we’re able to better serve our customers and continue with our business in those regions. But from our perspective, shareholder value at MSA is derived from other higher margin product groups and competencies. And that’s where I’m putting our focus. I don’t see at this point in time with the influenza breakout that product areas you mentioned, that’s TBA, where higher levels of protection might power their purifying respirators. We are not at this point in time seeing any real impact to our business because of that. Walt Liptak – Barrington Research: Okay. All in, can you comment on just what percentage of revenue breathing apparatus represents?

Breathing apparatus? Walt, self-contained breathing apparatus as you can see in the annual report last year, that was 24% of our business for the year. Walt Liptak – Barrington Research: Okay. And then how about with the–

A step down to just a genuine respirator that’s has a rubber fit to your face and cartridges, that was 14% of our business last year. Walt Liptak – Barrington Research: Okay.

That 14% includes a very small percent that Bill said, that paper mask, which is less than 1% of our business. Walt Liptak – Barrington Research: Okay. Okay, thanks.

Thank you. Our final question comes from Dick Ryan from Dougherty & Company. Please go ahead. Dick Ryan – Dougherty & Company: Good morning. Bill, you mentioned the certification on the police ballistic vesting. Can you talk about what the go to market strategy is there? What you see is getting to that market and timing?

Sorry, let me ask Joe to comment on that. He’s tracking that a lot more closely than I am. So he can prod you with the latest news.

The over all motivation here would be the passage of the NIJ standard. MSA was the first manufacturer to pass all of the testing from NIJ. And so we have really expanded our sales organization within the law enforcement market, have been very aggressive over the last nine to 12 months of setting up quite an extensive law enforcement distribution network. So combined with this expanded distribution network that specifically serves the law enforcement market as well as some new distributors that feel that this is an opportunity that are getting involved with this, that combined with our sales and marketing efforts and being the first manufacturer to pass NIJ, we see some nice activities, significant activities certainly coming in the second half of this year and continuing on. Dick Ryan – Dougherty & Company: Could there be some demand with the NIJ standard that you saw at the FCBA a year or so ago?

I don’t think it would be to the extent of FCBA. But there certainly are police departments that we know, are in need of some vests. And they are waiting for only NIJ approved vests. So there is some pent up demand. Dick Ryan – Dougherty & Company: Can you go to a market right now or is there something else that’s needed to happen with NIJ?

We would be ready to really deliver within the next two to three weeks. We have passed all of the NIJ testing. What we are waiting for is the official letter from NIJ which we expect within the next week. And then we would be set to go. Dick Ryan – Dougherty & Company: Has anybody else passed the standards, to your knowledge?

To the best of our knowledge, we know that there are other manufacturers that are in the queue and there is some testing done. I don’t know the extent to where that testing stands. Dick Ryan – Dougherty & Company: Rob Cañizares: Sure. In China, partially because of our new product lines and new capacity in the Suzhou facility, we’re actually seeing a relatively strong order pace this year compared to the first quarter of last year. And the sales have been strong. We also had a significant success that Bill highlighted in the breakthrough with the Hong Kong Fire Service, which of course was a first. We just opened our facilities in the Hong Kong about two-years ago and this was a major breakthrough. That contributed significantly to our growth in the first quarter. In South Africa, we have sort of a mixed bag. As you can appreciate, the gold price has gone up to nearly $1,000. Some miners are looking for gold and producing gold rather strongly. On the other side, platinum which is a supplier to the catalytic converter in the auto industry is significantly down. The good news for us is in the balance, we are seeing a stronger activity in South Africa and our improvements in the operations and our improvements in our cost structure have actually improved the financial performance of our business. Dick Ryan – Dougherty & Company: Great. Thank you. Rob Cañizares: You’re welcome, Dick.

Thanks, Dick.

At this time we have no further questions.

Okay. Thank you, Kim. And I would like to thank everybody again for joining us today. We do appreciate your interest as always in MSA. Also I want to remind everybody that an audio replay of today’s call will be available on the MSA Web site for the next 30 days. So if you’re taping the minutes and you need to go over it again, please feel free to visit our site. On behalf of Bill, Dennis, Joe, and Rob, we look forward to talking with you again.