I would like to welcome everyone to the Nordson Corporation second quarter fiscal 2008 results conference call (Operator Instructions). Thank you. Ms. Price, you may begin your conference.

Thank you, Kristel. Good morning, everyone. This is Barb Price, Manager, Shareholder Relations, along with Ed Campbell, Chairman President and Chief Executive Officer and Greg Thaxton, Vice President and Chief Financial Officer. We would like to welcome you to our conference call today, Thursday, May 22, 2008 on Nordson's second quarter fiscal 2008 results. Our conference call is being broadcast live on our web page at www.nordson.com and will be available for 14 days. There will be a telephone replay of our conference call available until midnight Monday June 9 by calling 1-800-642-1687 and you will need to reference ID number 47247543. Our attorneys have requested we open this call with a cautionary statement under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. During this conference call forward-looking statements maybe made regarding our future performance based on Nordson’s current expectations. These statements may involve a number of risks, uncertainties and other factors as discussed in the company's filings with the Securities and Exchange Commission that could cause actual results to differ. After our remarks we will have a question and answer session. I would now like to turn the call over to Ed Campbell for an overview of our second quarter fiscal 2008 results and Nordson’s future outlook. Ed

Thank you Barb and good morning to you all. Thank you for attending Nordson’s conference call, discussing our second quarter 2008 results. My comments this morning will provide highlights of what turned out to be another very strong quarter for Nordson, both in terms of revenue growth and operational performance. In addition I’ll provide some guidance relative to our outlook for the third quarter and some general comments regarding full year performance. Our second quarter performance generated record sales of $294 million, up 22% from the prior year driven by a volume increase of 15% and favorable currency impacts of 7%. Of the volume increased, the first year effect of acquisitions added approximately 6% with 9% coming from organic growth, a very solid number for our mix of business. All segments contributed double-digit revenue growth in the quarter lead by Advance Technology segment gains of 26% its fourth consecutive quarter of growth in excess of 20%. Organic growth within this segment was approximately 8%, the second consecutive quarter of solid performance on an organic basis indicating improvements and some of our end to markets and revenue growth from new products and applications. Sales in the Adhesive segment grew by 23% in the second quarter, aided significantly by exchange rate movements, but even excluding these effects volume grew by an impressive 12.5% with much of the growth generated from our larger dollar per system product lines such as Nonwoven, Product Assembly and Coating. We did experience a sales volume growth in all of our product lines within the segment. Within the Industrial Coating and automotive segment the 10% growth is primarily centered in Europe, Asia Pacific and the U.S. I will remind you that this segment is driven by margin dollar engineered systems and this is the segment most sensitive to…

(Operator Instructions) Your first question comes from the line of John Franzreb with Sidoti & Company.

Compared to your initial guidance, what was the biggest variance in the quarter, what business exceeded expectations compared to what you were thinking, say three months ago?

If I compare where we finished the quarter compared to the high end of guidance, we were just on the volume basis seven times, several percentage in growth rate above that high end of the guidance and I think in terms of execution we saw -- it's probably coming in a bit stronger than we had expected, they were above our own mid-point of our estimates, no doubt advance technology produced for us in levels that we are consistent with our best expectations and then on top of that from an earnings point of view, we clearly had currency with the nice tailwind and that added very good boost earnings per share that took us up a bit. We also, as I mentioned with cash flow and the benefit of lower interest rates, compared to what we might have expected the cash flow was strong and correspondingly we’ve benefited in terms of interest rates unlike and then last we did a good job in spending. So, on-- we really had good performance coming from a number of different directions.

All right, and do you think the advance technologies margins, is it’s sustainable at this 20% plus threshold. Do you think it’s going to be kind of a lumpy kind of a margin quarter-to-quarter this early on?

I think the margins that we produced are consistent with the kind of volumes that we shipped and we from a source of that widened margin clearly we had a good mix in terms of one set of product lines with the other, we had strength in Simtech, we had strength in EFD and those were obviously favorable. We had good and improving performance from the acquisitions and so we had a lot of things operating in that regard. I think the biggest determinant of whether we will sustain those margins or see changes either better or worse is going to -- for the most part be volume driven.

Okay and one last question, you kind of reference in your order discussion that the larger jobs are what’s holding back what's going on in an ease of an industrials as far as the order book. Can you kind of talk about what you are seeing there, is there some sort of global equipment spending trend going on at that we should be cognizant of, just kind of talk about some of the larger jobs and why there is a little bit weakness going on there?

Well, the areas that have driven the good order growth that we have seen in the first part of the year, even I think in the tail end of 2007 were focused in those businesses where orders tend to be quite large and that being the non-woven adhesive systems that are used for the assembly of baby diapers and feminine hygiene products and like wise the orders for large coding systems which are very large laminating systems using hot melt adhesives that tend to have very high ticket prices, long lead times in the like and these often times will come in particular the no-woven systems, they will tend to come in a pattern that might be associated with a large producer looking to recapitalize the production capability or in connection with the introduction of new products that they maybe rolling out in various geographies around the world. That tends to be source of the variability we occasionally see. This is a business where we have very good market positions and we saw in the orders in recent months and shipments as well, god activity in North America and so as you look at the geographical relationship of our orders, you’ll see that some weakness that’s crept into the US and a portion of that is the same determinant that has caused adhesive orders to be lower in the most recent reporting period than we had previously. There is nothing though -- I think to answer your question more directly, there is nothing that I see associated with a shift in global patterns or anything like that, I think its more about the buying patterns of particular customers that it is a macro economic driver.

Your next question comes from the line of Charles Brady with BMO Capital Markets

Thanks, good morning. Ed congratulations, obviously phenomenal results and should feel pretty proud of that as I imagine you are

Thanks Charlie.

I had a question, on the margin in the adhesive dispensing -- they are obviously really god margins, but you are also talking about having a mix of the lower margin larger project business embedded in there and so I guess my question is this level of margin, it sounds there as though we are not going to have these lower margin projects or I guess how long do we have these lower margin projects in here, because it sounds as though the margins might have a tendency to move even above where they are at now once that mix shifts a little bit to the less of the larger project business?

I think that’s a fair question, we’ve got a couple of different countervailing forces in there. As you note on the second page of the schedule, attached to the press release, we had very favorable currency in this segment as well, as a large portion of the systems that we sell or sold in international markets and that has a favorable benefit to not just to revenue, but also to gross margin and net operating margins and then the force going the other way of course is the mix within the products that we are selling within that segment in a sense moving against this and so, we were able -- the extra volume as well as the currency affect more than offset the unfavorable mix. If we can have the same volume, the same currency with the different mix of products you are absolutely right. There is significant additional operating in gross margin opportunities, but I think what we are talking about is less of a shift in the mix of these products -- it’s the same revenue, same revenue growth rate, but rather a portion of what’s our overall growth for these lumpy sales and I think the deceleration that you see in the order rate in correspondingly the volume growth rate that’s in better than our outlooks that we shared for third and fourth quarter are associated with some of these large systems orders are not associated with the period that we forecasting as much as they were in the prior periods.

Thanks that’s helpful. Can you expand upon the comment with regard to the industrial coatings business? The think you are doing to improve the margins there?

It is more about the operating margins that it is necessarily about the gross margins, but it’s a portion of that, these are businesses that are located in our Ohio campus and it’s an area where we have been active and looking at the how we can better utilize the investment embedded in that campus and we have activity underway to reduce some of the cost in there associated with how we operate. We also have been looking at the totality of the product line and focusing upon those portions of the product line that have best advantage to expand our emphasis and correspondingly for the portions of the various components to go into that that maybe there is area that we could deemphasize and that then gives us ability to correspondingly adjust all the support systems within the product lines in a consistent way that at the end of that those shifts will make us to be more efficient. We also have been about introducing some new products that are in their induction. Were a portion of the spike and spending that we had in this past quarter and there is a lot of excitement about these products, we’ve introduced these at shows around the world in recent periods and we expect that the profit performance of this group with the shifts to the new products, the reactions that we are getting in those things I’ve talked about in terms of operating expense all add up to a better level of profitability that we would otherwise have at any level of revenue.

One follow-up final question, I’ll get back in queue. On the SG&A expense you commented about the sort of how far back you have to go to see a level that well, but you also commented, that you had –sounded like some headwinds on additional costs on tradeshows in coatings and that aren’t going to be repeated. I guess my question goes to sustainability of SG&A at the Q2 level at least as a percentage of sales?

I think that the comment that I'd repeat is that presuming we hit these forecast that we have been laid, we are within that range and I would think that these relationships would be consistently sustained.

Your next question comes from the line of Matt Summerville with KeyBanc.

A couple of questions first Greg, can you quantify what the FX benefit was to EPS in the second quarter and then remind us what it was in Q1 and then if we go back to Ed’s outlook for the third and fourth quarter, what kind of EPS contribution you have embedded in that from currency.

Yes Matt, this is Greg. What I can say about quarter two is FX benefit to the high-end of our EPS guidance was about $0.05. Now we did have as Ed, mentioned some benefits with declining interest rates on our debt that added about our $0.02 to top end and then lower SG&A as well was in another benefited as Ed called out, in quarter one currency added about $0.06 to our earnings.

So it actually added less in the second quarter?

What I’m reconciling to – I’m sorry my second quarter comments, is to our top end of guidance.

In the total Matt, the foreign exchange this year as compared to last year was $0.12 a share in earnings per share impacting quarter two. Net number was $0.06 in quarter one.

Okay and then the back half of the year do you have something similar as to the $0.18 than total in the first half of are using the number less than that.

We are using a number less than. If you look at the currency, the currency gain on the revenue growth in the third quarter is that about 5% and in the fourth quarter is about 3%.

Okay. All right I just want to verify that. I guess I think I probably know the explanation, but I would like to just digging a little bit Ed on the sequential decline in the overall backlog.

Yeah the backlog in the quarter one was as I recall. The exchange rates at that time something like 131 million and we are now at these exchange rates are 121 million and then a sense its -- if you look at the volume that we shifted, we shifted 9% volume and then we had orders depending upon the order dates don’t exactly line up with the that reporting period, but we’ve talked in constant currency 8% order growth we see during the first quarter’s conference call, and 0% order growth in the most recent period looking backwards. So, it’s in my mind not surprising that the backlog can down a bit, particularly some of those large engineered systems jobs, the Costing jobs for example they were at Hughes, that were portion of our shipments in quarter two. These are jobs that are literally in the backlog for periods approaching a year and so, some of the growth that we had in orders, in the first half of 2007 are products that were being shipped in the most recent quarter.

Okay. That’s kind of what I thought. Tuning to Advanced Technology, how do you feel about the sustainability of the organic growth you’ve experienced through the first half of the year, and then I just what has to happen for that to accelerate, and then I just want to see if there is consistency around that what your hearing from your key customers in and around Advanced Technology, that would reconfirm your prior statement. Do you think ’09 is gong to be more robust than ‘08?

Yes, well first of all there is a variety of different factors that we look at and looking at our expectations for Advanced Technology. First of all if I start with a macro and I will immediately give a cavy that in our experience in present observations we often times perform a different levels in some of those macro trends we get, when you look at Garnett group and some of those, but nevertheless we’re a -- we do operate in some aspects of some of these broader markets and it’s always interesting to look at what they have to say. The most recent Garnett group forecast would indicate that the market for some of the capital equipment is very weak right now, primarily focused in derma capital equipment. There was a real -- I think in a lot of people’s mind an excess of capital spending to built the capacity, to build the volume of memory that’s being shipped and now there is a gloat not only of capacity but also of inventory. Good for Nordson, we hardly operate in those areas today, I think over time going forward, we are going to see major changes in the architecture of home memory is assembled that will significantly benefit Nordson and the technologies that we bring to those markets, but as of today, we are not being impacted accept in some minor ways. We are much more focused on capital equipment necessary to assemble that processors and the boards that are used in products like cell phones other handheld devices and personal computers. For example in cell phones, there is the macro numbers you see in cell phones that people probably tend to be most familiar with, but the reality is cell phones are getting significantly more capable. These cell…

Okay. Just sticking with the advance tech business can you talk about outside of the absence of inventories step up costs? What kind of operating margin improvement we’ve seen out of the businesses, you’ve bought recently?

We have seen a mix, we have one of the four companies and I’m not get into specifics just for competitive reasons but we had one of those four businesses that has had significant growth in volume and corresponding benefits in the - in the arrangement of their P&L. At the other extreme, we have a business that’s primarily U.S. centric and it is suffered from weakness that’s been specifically associated with some Advanced Technology weakness for businesses that are headquartered in the U.S. customers headquartered in the U.S. Our Asian businesses have been strong in advanced tech and general we are seeing expanding performance in the P&L as a result of that.

Okay, then just one final - actually two final questions. First, what’s the tax rate we should be using for the full year has that changed and then Ed can you qualify what you thought the excess spend was in industrial coating in the quarter?

Sure. As Greg, is grabbing the tax rate. The extra spending rate is in the order of $1 million.

Okay.

And tax rate Mat is consistent with what we are seeing here in the second quarter about 35.5%.

(Operator Instructions) And your next question comes from the line of Bob Schenosky with Jefferies.

Good quarter, first up, just one house keeping note CapEx estimate for the year?

Full-year estimates for capital expenditures from operations would be about $21 million and we -- as we’ve articulate in the past, we’ll have some spending throughout the quarter associated with real estate and through the second half of the year.

And then, just I want to clarify on the FX comments you made on the quarter at, you said that there was $0.12 in currency benefit in earnings, is that all translation or you will also mentioned interest rates, so can you break that out?

I’m sorry this is Greg, that $0.12 is all currency benefit. It’s not includes about the benefit from the interest rates.

Okay, thanks. You’ve been quite clear on the AT demand in the next year and also in the second half of this year, but what about the other two segments and related CapEx spending given macro concerns, commodity prices. Are you getting any indications that all from your customers in terms of then want to pullback some CapEx decisions?

No, it’s something that, I have asked regularly if our guidance -- we get together to try to understand. I think we have seen some conservatism of people in the industrial coating customer markets. Those are the market that, typically things that are painted with powder or made with metal and that’s you are talking about durable goods that have a verity of end-market locations that are consistent with where we see weakness within the U.S. and embedded in our forecast for the third quarter is a decline in revenue associated with industrial coating activity, but we have some sense that the -- that that business can have an improved fourth quarter unlikely the dip that we see in the third quarter. With regard to Hughes we have less types of visibility and less observations around those kinds of patterns to back away. We’ve had generally across all of the product lines, good performance in the product lines within the Hughes. These are businesses that have lots of orders and in the lead times other than those large systems that I have talked about earlier, tend to be very short. Products that are relatively standard and that we shift with them just a couple of few days from the time we get the orders. So, we tend to be more momentum focused in our own internal forecasting. The end to markets that we are selling to tends to be much less associated with durable good products that our customers are making with our systems and so, we don’t expect, nor have we specifically observed the kind of things that we’ve seen elsewhere in the economy and within ICA in particular.

Okay, thanks Ed and are you able to delineate any further for us, the strength that you have seen in Europe by geography. I mean, just certainly it’s a big dichotomy there with strength in Germany, but some other countries showing pretty extreme weakness now because of several issues

Yes, I think our pattern would not be -- unlike the things that you read about from various sources. Southern Europe is -- for the whole 90s Southern Europe is what really drove demand and Northern Europe struggled and here of late it’s been the inverse of that. Germany and the adjacent countries have been doing well and some of the Mediterranean countries have struggled a bit more; the UK’s economy has been mixed as well.

Okay and then finally, give the strength in cash and the balance sheet that you have, can you talk about acquisition strategy for the back half of this year and into ’09?

I will talk about our strategy Bob and obviously we have got a very strong position, we have -- if you look back over the last five years, we have obviously concentrated our spending in 2007, but if you look at it over time we are spending -- the needs of our business for reinvested cash are not huge and so we have an ongoing expectations of our selves that we are going to find acquisition opportunities of high performing companies that because of their unique market positions, your technologies are going to deliver revenue and earnings growth in levels of profitability that are at or better than what we would average as a corporation overall. That strategy to find companies of that nature, that bring us not new end markets or geographic markets, so that we can bring them into those new markets is something we search for; always looking for a way to ensure that we are adding value and we are not just simply investing in areas where we cannot add that synergistic boost to performance. In terms of what we will find, I can’t project. We have an active and ongoing look. I think that the level of sellers out there and looking to -- their initiative to sell businesses is not as high as it was a couple of years. I think there’s a bit of latency added t it in many business owners, but on the other hand, we are very active in trying to find ways in which we can identify companies that we can establish relationships and do things to build a plan, particularly an entrepreneur founders plan at the time that they love to retire from their business with a partner that they are going to work with in terms of selling that business.

Your next question comes from the line of Gregory Macosko with Lord Abbott.

Could you just remind me a little bit on the third quarter with regard to advanced tech -- I mean the margins clearly were tremendous. Where did they stand in the third quarter and relative to a -- on a comparison basis?

I don’t have, Greg a specific operating margin to share with you for the third quarter, but…

No, last year excuse me, I am sorry.

Last years third quarter.

Yes, excuse me.

That’s okay. We will grab that for you just a moment well…

And then with regard to the order growth as well there was a bit of a -- a couple of comparison in some of the sectors. I mean just again remind me how -- what those comparisons are in order of the rate -- growth look like in the three sectors for the third quarter of ’07?

Yes, the third -- yes the orders looking at the order pattern. We had a year ago and I don’t have the sheets in front of me, so I will dig off because I am drawing on memory here, but the adhesives and the industrial coating and automotive business segments a year ago had very strong orders around this time of the year and in fact if you -- as we could look at a graphical pattern that these orders have crossed the fiscal year 2007 you would see some humps that existed there in the mid part of the year and we are kind of driving into those humps as point of comparison right now and then the order rates in these segments were softer in the final four months or so of the fiscal year and at the rates that we are running out now if we just maintain those rates we will go from flat comparisons to positive comparisons. There is always a bit of seasonality and that’s not to say that we might not have in a sequential basis some softness as we get into December months as we have in some years, but there is clearly a hump that we are having to compete with as we compare this year's dollar order rates compared to one year ago.

Good and the margins -- the comparison in the Advanced Tech.

Yeah, Greg the Advanced Tech margins in the third quarter of ’07 was 14.1%.

And the fourth, do you have that?

And the will more -- in just a minute.

We had last year -- I will caution that last year's operating margins in Advanced Technology had within them these purchase accounting affects, for example in quarter two it was about $0.08 a share I think in quarter three it might have been something like $0.05 a share and maybe a penny or so in quarter four.

And so that is going down now what we are seeing here and that’s less now in the current quarter, is that right?

Yeah we picked up $0.03 a share.

$0.06 a share.

No, $0.06 a share pardon me -- $2 million; $0.06 a share in the second quarter and $0.05 in the third quarter.

And the prior year fourth quarter was 15.5%.

Okay, so they have been progressing steadily nicely.

Yes.

At this time there are no questions in queue.

Okay operator, well thank you. Last quarter when we had this conference call we got that notice from the operator and I thanked everybody and hung up and I later heard from some people that you didn’t give us a chance to push the button, so I guess as they sometimes say this is the last call, but as I give folks an opportunity to consider whether they have more I again just want to reiterate that we feel real good about the momentum that this business has. We have a good solid look at the third quarter. It’s a less clear for the fourth quarter, but we wanted to share with you an outlook for the fourth quarter so that you could get a sense of the momentum and the pace of business that we see. I think if you look at the currencies that we’ve shared; 3% on revenue, we don’t know what it’s going to be. That maybe slightly conservative, but we will leave it to you to do your own currency forecast but we thank you all for your attention. Operator, are there any more questions?

No sir, not at this time.

Alright, well then we will call it a day. Thank you, all very much. Look forward to having the same conversation with you in three months. Bye, bye.

This concludes today's Nordson Corporation second quarter fiscal year 2008 results. You may now disconnect.