Good morning ladies and gentlemen welcome to the DXP Enterprises Incorporated fourth quarter 2007 results conference call. At this time all participants are in a listen only mode and following the presentation instructions will be given for the question and answer session. (Operator Instructions) I’d like to turn the conference over to Mr. Mac McConnell, Senior Vice President of Finance and Chief Financial Officer. Please go ahead sir.

This is Mac McConnell, CFO of DXP. Good morning and thank you for joining us. Welcome to DXP’s fourth quarter and full year results conference call. David Little our CEO will also speak to you and answer your questions. Before we begin I want to remind you that today’s discussion will include forward-looking statements. We want to caution you that such statements are predictions and actual events or results can differ materially. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings but DXP assumes no obligation to update that information. Our fourth quarter press release is available on our website www.DXPE.com. I will begin with a summary of DXP’s fourth quarter and full year 2007 results. David Little will share his thoughts regarding 2007 results and then we will be happy to answer your questions. Sales for the fourth quarter increased 113% to $168.8 million from the fourth quarter 2006. Excluding fourth quarter 2007 sales of $68.9 million from businesses acquired in 2006 and 2007 on a same store sales basis, sales for the 2007 fourth quarter increased 25.9% from the 2006 fourth quarter. Gross profit for the quarter increased 107% from 2006. Gross profit as a percentage of sales decreased to 27.5% from 28.3% in 2006’s fourth quarter as a result of the acquisition of Precision Industries in September, 2007. Precision’s gross profit margin for the fourth quarter was 24.7%. SG&A increased 111% compared to the 113% sales increase and 107% gross profit increase. SG&A for the fourth quarter of 2007 includes $1.4 million of amortization of intangibles compared to $500,000 of amortization of intangibles in the fourth quarter 2006. Excluding the increase in amortization expense, SG&A increased by 106%…

Thanks for all the participants on our call today. I would also like to give a big thanks to DXP people, customers, suppliers and shareholders who have made 2007 a great year. As Mac has stated, DXP supply chain services had organic growth of 29%, innovative pumping solutions had organic growth of 30% and MROP for the last 12 months had organic growth of 12%. Our acquisition program had a very measured year with three strategic purchases of Delta, Indian Fire & Safety and Precision Industries. All three were very important to our future and even though Precision was slightly negative in the fourth quarter we believe they will have very positive growth of both the top line and the bottom line for 2008. Our outlook for 2008 is very positive despite what is happening to our stock in our stock market. We have done a field survey of our customers and I thought I would share some of the results. When we look at the oil field customers, we see the market remaining strong, refinery: strong, chemicals: good to strong, manufacturing: down, ethanol: strong, power: strong, steal: strong, styrene: bad, polystyrene: bad, ABS plastics: bad, aggregate: strong, semiconductor: strong, general industry: good, food and beverage: good to strong, pipeline: strong, mining: strong. When we look at the drilling rig count the worldwide is up 8% over last year and [inaudible] agricultural being strong. These are a lot of our markets and we feel really good about them even though some of them are slightly down. DXP’s 2007 average price change looking at product categories and what was the inflation factor of products was 4.63% last year and we expect this to be slightly lower for 2008. Based on our understanding of the markets we serve and the fact that…

(Operator Instructions) One first question is from the line of Matt Duncan with Stephens, Inc. Please go ahead. Matt Duncan – Stephens, Inc.: The first couple of question I’ve got are really with regard to Precision and I appreciate the commentary that you gave us there. I’m curious if you can talk a little bit about maybe the revenue impact of the new integrated supply deals that you said Precision has signed since the deal closed. Are these larger deals? Medium size deals? What’s the impact of these deals?

They’re smaller deals. As you all should know Precision lost two major contracts in 07 that represented 25% of their business. Since that time they have signed two large contracts one of which was kind of sales have been deferred really into 08 and so they’re coming they haven’t gone away but they didn’t happen as quickly as we would like. Then, in the meantime they signed several I would say $3 million type deals, ones an extension of an existing customer and I think there’s two others that are brand new. Matt Duncan – Stephens, Inc.: Good. That’s helpful. Then, on top of that given that they have now signed these new deals despite the fact that one of these larger ones is ramping a little slower, do you think those kind of offset each other and precision is still able to do the roughly $300 million in revenue that you guys had expected it to do in 08 when the deal closed?

We’re not going to give guidance on what sales should be but, I will say that we’re very optimistic, they’re very optimistic that they’re going to have a really good year and I think there was some sort of indication that they would get back to where they were in 06 or greater. So, we feel good about that. Matt Duncan – Stephens, Inc.: Mac, you gave us the growth rate for your three different businesses in the full year 2007 and I’m curious if you got organic growth in front of you for service centers, supply chain services and the innovative pumping solutions there in the fourth quarter?

Yes. Supply chain in the fourth quarter, the growth rate, organic growth rate was 15.7%, for innovative pumping solutions it was 67.1% and for MRO sales by our service centers it was 10.95% so, 11%. Matt Duncan – Stephens, Inc.: Great. That’s helpful. A couple more things and then I’ll jump back in queue. Mac, I know that LIBORs been moving down and you guys borrow a lot again LIBOR so I’m curious what is your average interest rate is today?

Oh, that sounds like a question I don’t know the answer to. I don’t know what the average has been for the first quarter, I know we just renewed a small LIBOR contract at 3.08% yesterday and so with 125 adder to that it was 4.3 something. Matt Duncan – Stephens, Inc.: Then, pretty soon that LIBRO plus 1.25 should adjust down a little bit, correct?

Yeah. Matt Duncan – Stephens, Inc.: Then David, kind of more for you, just a little bit more curious about what you’re seeing and hearing from the marketplace and I appreciate the survey you went through there for us about what you’re hearing from your different end markets but just anecdotally, maybe you can talk a little bit about what you guys are experiencing so far in the first couple of months in 2008 and what you’re seeing out there in the marketplace and sort of what are your customers telling you to expect from them in 2008?

Well, our guys are very positive and when I say our guys I am really drilling down to our salesmen which have the voice of the customers and speak with the customers every day. They feel really good about this year certainly, a lot better than what we read in the newspaper. The first two months have been good. February slightly better than January and January was good. So, we’re really not experiencing or seeing anything like what we keep reading about. Matt Duncan – Stephens, Inc.: Okay. Then last thing and I’ll jump back here, acquisitions, kind of what’s your thought on acquisitions going forward? What does the pipeline look like right now? And, do you expect to continue making acquisitions throughout this year?

Well, we purchased Rocky Mountain Supply which we feel really good about, they’re selling bearings and power transmissions to the agricultural industry. We have other deals, we’re always working on deals, we always have a pipeline of deals and so given the right deal we’re going to continue to pursue acquisitions. We don’t feel – when I say even last year we did three and I use the term measured, I use that because it’s not something that we feel like we have to do but it’s part of our growth strategy of getting to $1 billion is to do acquisitions and so we want to do accretive acquisitions and of course Rocky Mountain Supply was done at I think four time EBITDA so it was very accretive.

Our next question is from the line of Paul Resnik with Dutton Associates. Please go ahead. Paul Resnik – Dutton Associates: First of all I’d like to say that you are getting better and better on these quarterly conference calls. You are covering everything and what you didn’t cover your first questioner just made sure he nailed everything so it leaves me with the only question of when do you expect to get your 10Q done?

10K? Paul Resnik – Dutton Associates: 10K, excuse me.

It may not be filed until March 17th.

Our next question is from the line of Murray [Wandstrap] with Bonanza Capital. Please go ahead. Murray [Wandstrap] – Bonanza Capital: Innovative pumping can you give the dollar amount in that category?

For the quarter? Murray [Wandstrap] – Bonanza Capital: For the year.

For the year it was $87 million. Murray [Wandstrap] – Bonanza Capital: Alright. When you guys look at that line of your business, amazing growth 07 from 06 what are your sales guys telling you and kind of what’s the environment there from a capacity standpoint?

Well, that’s a great question. We’re running in two points of capacity. You say capacity, one is that as you know part of these innovative pumping solutions is we buy a pump from a national Goulds, [inaudible] or somebody like that so their lead times are pretty long and then our own capacity strength even though you remember we enlarged our top 29 facility and we fluctuate with production based on how many shifts we’re running, whether we’re running three shift, two shifts, I guess we don’t ever get below two shifts. But, we are running in to some capacity so I think they’re projecting another really, really great year. They really make a lot of money over there, they’re margins are higher than our MRO business. But, I don’t think we expect to see the same growth rate that we’ve had last year even though I think we’re really happy with the fact that we will have a nice growth rate it just won’t be as substantial. Murray [Wandstrap] – Bonanza Capital: Then looking out, is that the mix inside of innovative pumping, is that similar to where its been in the past offshore, [inaudible]?

Over the last three years and we expect this to continue is we’ve had a lot more pipeline jobs. Murray [Wandstrap] – Bonanza Capital: Okay.

We still are doing offshore, we actually have some on shore jobs. We were also talking yesterday about some jobs in Wyoming and things like that. We’re still doing the Chevron South Africa type stuff that’s offshore. But, there’s a lot of pipeline stuff, pipelines domestically and offshore. Murray [Wandstrap] – Bonanza Capital: And back to Precision, you’re four months or so into this thing, five months, any positive or negative surprises with you wouldn’t call it integration because you’re not doing a whole lot of that but with how things have progressed?

We’re actually surprised by the fact that some of the ideas being generated is to integrated quicker and so we look at that as being positive, getting everybody on one computer system and then also the fact that they have what we’ll call these product managers that are really, really good and I’ve talked about we want to maintain expertise around the products we sell. We don’t want to become just a general list or a catalog house. So, they have a structure and some key people that really head up, maintain the fact that they’re a general mill supply company and that we’re going to be the best general mill supply company that we can be, the best pump company we can be and they have positions that we’re leveraging at DXP and we’re pretty excited about that. Then, on the integrated supply side, they’re really, really good at managing big volumes of data better than we are so they’re bigger in integrative supply than we are so we’re learning a lot from what they’re doing and we’re actually using their data group as data management of some sort. And then of course, purchasing power and rebates and things like that, we’re all over those things. So, there’s a lot of interaction between the two companies and it is very positive. Murray [Wandstrap] – Bonanza Capital: Does it change your perspective in shortening the timeframe to get to 10% EBITDA margins? Or, is that still kind of just a long term goal?

Well, they have adopted a lot of – we call it – anyway we’re trying – we have programs that help us raise our margin, they’ve adopted those programs. I think the timeframe is getting shorter, I think Precision obviously took us back a step because their EBITDA percent of sales is not as high as ours so that took us backwards a bit but, on a go forward basis, they understand that that is where they need to be and they’re excited about getting there. And again, I think it’s all positive.

(Operator Instructions) Our next question is from the line of Schon Williams with BB&T Capital Markets. Please go ahead. C. Schon Williams – BB&T Capital Markets: Just a quick question, can you talk a little bit about some of your 2008 and margin initiatives? Can you tell me about some of the supercenter conversions? Do you they take place in Q4? And then maybe also some comments on pricing. I know you’ve been trying to implement a new pricing metrics and I was actually surprised that you thought pricing might be decelerating a little bit 08. Can you just talk a little bit about those two points?

I think the deceleration of pricing was talking about inflation. C. Schon Williams – BB&T Capital Markets: Right. So, I guess that given what we seen on some of the commodity side that you actually see inflation decelerating a little bit in 08.

We looked at the price increases we got from our manufacturers in 07 and across – of course, within different product groups it would be a different number but as an average of what we purchase from them, we’ll call it our inflation index was 4.63. What we’re seeing this year again, can very if you’re talking about special alloys and steal and the pump industry well you know, we’re seeing maybe 8, 9% increases and then when we’re seeing gloves and things like that well things like that then the increases are smaller. We’ve just felt like overall that that number – we’re still going to be north of four but it wasn’t going higher sort of the point and we thought would be slightly less. C. Schon Williams – BB&T Capital Markets: Okay. And no trouble kind of passing that on that on at this point then?

No. C. Schon Williams – BB&T Capital Markets: Then just on the supercenters any progress there to report on?

We have, I wish I could remember the number, I think we have eight, by our definition we have eight supercenters. Precision actually has three by the way, when they looked at what we’re doing and using our definition they had three and I believe they think they’re going to have three more this year and then DXP has 11 under construction and I thought this was pretty cool, I learned this yesterday myself, that under construction means that they have hired the people which is the hardest part to do and they have an internal measurement that says until they’re doing $500,000 in that product category it’s just under construction. They’ve really done it, they just haven’t realized the revenue growth from it yet. C. Schon Williams – BB&T Capital Markets: Then, back on just a follow up on Precision, are you guys still thinking – you know you talked a little bit about the integration there and the progress, are you still looking at $2 to $4 million in savings? Has that number changed and do you think in terms of timeline are we still looking at that happening in 08? Or, is that more of an 09 event?

We’re still good with that number and it’s an 08 event. C. Schon Williams – BB&T Capital Markets: Okay. Then just lastly, a little housekeeping, can you tell me what cap ex was in Q4 and what you guys expect in 08?

I know I have the total year cap ex in front of me, it’s $1.9 million. Let me see if I have the quarter listed here some place for you. I don’t know that I do have that.

Most of our cap ex is going to IT related. We normally, like we have initiatives to open up four new stores but we would lease the space. So, most of that’s IT, our IT departments doing a really great job of keeping up with our acquisitions and our growth and they just finished this past weekend a new project to enter our backup systems and a whole bunch of stuff done and I can’t compliment them enough. C. Schon Williams – BB&T Capital Markets: Okay. And, any reason why that would accelerate in 08>

I mean, we’re talking about such a small number. It’s going to be in that range of $2 million to $3 million.

Our next question is from the line of Ray Rund with Shaker Investments. Please go ahead. Ray Rund – Shaker Investments: You had a great quarter and I’d like to congratulate you on that but you were going so quickly at the beginning I had trouble following you. I was wondering if you could just restate or re-mention what the sales were for Precision Industries in the quarter if you gave that and what the sales by the businesses acquired in the last 15 months were.

Precision’s sales in the fourth quarter were $59.9 million. Then as your question kind of broken down by our three business solutions, the supply chain, innovative pumping solutions, are those? Ray Rund – Shaker Investments: Well, last quarter I believe you gave your core sales and sales by businesses that had been acquired in the last 15 months is the way you’ve broken it out and I was just wondering if you were defining it in the same way for this quarter or if you had gone to a new?

I think last quarter in the press release we released it one way which his saying, “Okay how many sales for businesses acquired during the year, what were their sales?” Then we also, in the conference call, disclosed what I would call kind of a same store sales basis where we were actually backing out the 2007 sales even to the extent that if we only bought a business on July 1, 2006 then we backed out the first six months of sales in 2007 so we were doing a comparison of having six months of sales in 2007 versus six months of sales in 2006. Ray Rund – Shaker Investments: Well, if you could give it on the same basis then.

Well, the same basis, the sales that we backed out for the fourth quarter was $68.9 million. Ray Rund – Shaker Investments: So that would be the total sales including Precision for businesses that were acquired?

That’s right. It’s backing out all of Precision sales, its backing out sales for Indian Fire & Safety, Delta and it’s backing out a tiny amount of sales that we bought in the first quarter of last year when we purchased Safety Alliance, Safety International & Gulf Coast Torch. So, there are actually six companies that that number is backing out from sales. Do you want it for the year? Ray Rund – Shaker Investments: Sure.

The amount we backed out for the year was $121.1 million and with that one it’s the same companies plus we’re backing out some sales for Production Pump which was acquired in May, I think, May or June of 2006.

There are no additional questions at this time. Ladies and gentlemen this concludes the DXP Enterprises, Inc. fourth quarter 2007 results conference call. You may now disconnect.