Good day and welcome to the ESCO third quarter conference call. Today's call is being recorded. With us today are Vic Richey, Chairman and CEO and Gary Muenster, Executive Vice President and CFO. Now, to present the forward-looking statement and for introductions, I would like to turn the call over to Ms. Patricia Moore, Director, Investor Relations. Please go ahead.

Good afternoon, everyone. Statements made during this call regarding the timing and amounts of fiscal 2009 expected results, earnings, sales, cash flow, EPS, future growth prospects, strength of the co-op market, success and timing of the Company's pursuit of AMI opportunities, success in international markets, the impact of the stimulus package, and other statements, which are not strictly historical are forward-looking statements within the meaning of the Safe Harbor provisions of the Federal Securities laws. These statements are based on current expectations and assumptions, and actual results may differ materially from those projected in the forward-looking statements due to risks and uncertainties that exist in the Company's operations and business environment, including, but not limited to, the risk factors referenced in the Company's press release issued today, which is an exhibit to the Company's Form 8-K, also filed today. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, during this call, the Company may discuss some non-GAAP financial measures in describing the Company's operating results. A reconciliation of these measures to their most comparable GAAP measures can be found in the fiscal 2009 third quarter results press release issued today and also found on the Company's web site at escotechnologies.com, under the link 'Investor Relations. I'll now turn the call over to Vic.

Thanks, Pat. I'm going to let Gary provide a few comments on the financials first and then I will provide an overview of the current market and also discuss my perspective on our outlook.

Thanks, Vic. As noted in the release, operational EPS was $0.49 a share in Q3, excluding $2.3 million or $0.07 a share associated with the Aclara RF facility exit and relocation costs. This $0.49 compares to $0.47 in the prior year third quarter. GAAP EPS was $0.42 in the '09 third quarter when including the facility relocation charges. The effective tax rates contributed positively and consistently in both the '09 and '08 third quarter results. The 23% effective tax rates in the third quarters of both years were favorably impacted by approximately $2 million of tax benefits recognized in the respective years. Year-to-date 2009 operational EPS was $1.11 per share compared to $1.05 in 2008. And I will remind you that the '08 year-to-date EPS amount of $1.05 includes $0.20 a share related to the accounting revenue recognition catch-up at PG&E. Sales were down slightly in the third quarter but increased in the nine month period of 2009. The Q3 decrease was driven by lower sales of Aclara PLS products, fewer Chamber deliveries in test, and lower commercial aerospace filtration products at PTI. These decreases were partially offset by significantly higher sales of RF and software AMI products at Aclara and additional hardware sales at VACCO. Year-to-date, sales increased 7% or 12% when excluding the '08 deferred revenue recognized. The nine month sales increase was driven by an additional $50 million in sales of AMI products at Aclara RF and higher sales at Doble and VACCO. Regarding EBIT margins, both the Filtration and Test segment achieved strong operating results despite a decrease in revenues. Their improved results came from manufacturing cost efficiencies and other cost and pricing strategies implemented throughout the year. Filtration has maintained an EBIT margin in the high teens despite nearly a 5% drop in revenues and…

Thanks, Gary. Considering we're operating in a very difficult economic environment, I am pleased with our third quarter results. As Gary noted, entered orders and strong cash flow certainly were the main highlights in the quarter. Additionally, our earnings were consistent with our internal projections going into the quarter. I believe it is critically important in times like these to successfully execute on the business you have. I am convinced that our operating management teams are doing this quite well, evidenced by our ability to maintain or increase segment operating margins on down sales. Our margin success is driven by good cost management companywide and working diligently to improve productivity. I don't think our operating management teams are leaving any stone unturned in this area. We continue to focus our efforts on material cost reductions, labor efficiency and force count management, manufacturing excellence, including scrap and rework reductions, and effective price decisions for our products and services. I feel good about our performance. While I understand there's always room for improvement, I believe we are delivering the best products to our customers at the best cost to the Company. Moving on to our market opportunities in the AMI space, while everybody has seen some softness and delays as a result of the uncertainties surrounding the timing and amount of available stimulus spending, we continue to be bullish about our future of our AMI markets and about the opportunities and our positioning, both near and longer term. Our win and our performance to-date on New York City Water project, combined with our continued success in the PG&E gas deployment, puts us in a leadership position in both the water and gas markets. This is a good spot to be in, since the gas and water markets continue to accelerate their adoption…

(Operator instructions) Our first question will come from Kevin Maczka with BB&T Capital Markets. Kevin Maczka – BB&T Capital Markets: Good afternoon. Hi, Gary, I guess, first, if you can help me make the leap from Q3 to Q4 with the guidance, it looks like with the EPS guidance and the revenue guidance you provided, that you're probably going to need nearly 20% EBIT margins to do that, at least at the low end. So I know you did that last year, but your revenues are going to be down year-over-year. Can you just help me understand which of the segments is going to make the biggest leap here and how they are going to do that?

Yes, I think it's going to come somewhat across the board. That's kind of why we tried to focus some of our commentary on some of the operating efficiencies that we've put in place when we see in the third quarter some of the sales declines but the profits going up. What we've done throughout the year, as we saw this economic downturn coming, as we started rationalizing costs, rationalizing headcount and things like that. So I think, as Vic said in his commentary, we have an all hands on effort managing the efficiency and productivity side. So with that kind of as a lead-in, that kind of is the broad brush to see that it's going to impact across the organization. So when you look at where the big chunk of the volume comes from, starting with the test piece, we talked about this large project that we have in India with NATRIP, a big chunk of that business ships in the fourth quarter, and so that's roughly a $17 million project with almost half of it being delivered in Q4. So when you look at the test business coming off of the Q3 actuals, which were about $29 million or so, that will be close to 42 million or 43 million in revenue, with NATRIP being a big piece of that incremental $12 million or $13 million in revenue. When you look at filtration, we've had this in the past in the fourth quarter. There's a large project related to the Virginia-class submarine at VACCO that gets delivered in the fourth quarter. And that's $3 million or $4 million that pulls a lot of profit contribution through with the sales. And so within filtration, the lead is the Virginia-class valve. In test, the lead is the NATRIP, the…

Yes, we've had customers that have said, hey, we are going forward regardless. Obviously, the concern people have is they don't want to go and commit their own money before an award is made because they are concerned that they would say “Well, they already made a decision; they obviously don't need our money, so we are going to award to someone else.” These things are going to be very competitive. So people are just saying, “We're not going to make a decision until that award is made,” but I would say the majority of the people, at least that we have been talking to, plan to make a decision because as I've said on numerous occasions, the business case is there, and so this market is going forward. It was going to go forward before the stimulus package; it's going to go forward after the stimulus package. It's just that this really kind of put a little blocking in place, if you will; because it did make people stop, make a decision. But the business cases are still there. So I think the vast majority of the people who've applied for these things are still going to go forward. Now, some of the larger projects where they've kind of thrown some things in there might not go forward with everything they plan to do, but I think the base AMI projects will go forward. Kevin Maczka – BB&T Capital Markets: Okay, guys, thank you.

Our next question comes from Carter Shoop of Deutsche Bank. Carter Shoop – Deutsche Bank: Good afternoon, guys. So sticking on the stimulus subject here, most of the consultants are recommending that large utilities declare who their AMI provider is in this market investment grant applications that are due this Thursday. This said are you aware of any large utilities that have selected ESCO for their AMI offering in the applications?

Well, obviously, if there has already been a selection made, we just can't announce something like that. So that's not a question I'm really in a position to answer. Carter Shoop – Deutsche Bank: So to be clear, these aren't necessarily for projects that have already been awarded or cleared by the PUC, but what I'm hearing is that a lot of utilities are actually placing a name in these applications and saying, “if we get approval, then we will select this vendor.” Are you aware of anyone that's actually selecting you? I am not looking for actual names of utilities but just if you are aware of anyone that has put you guys in the application.

I know that there have been submissions made that include our name and include our products. Some those are ongoing projects, but I'm not aware of any big project that somebody is starting from a Greenfield environment that is putting that in place, but that's the first I've heard that they are taking that approach, if you will. Carter Shoop – Deutsche Bank: Okay. And then ask a follow-up question with the stimulus, is there any way to quantify the impact of the delays here on the Aclara part of the business as it relates to the stimulus, both on the electric and water side? I'm not sure. That's not an easy question to answer, but when you think about it and you talk to the board and other investors, how do you try to quantify the impact to the business?

Yes, it is difficult. I mean, as you know, where we started the year, we're down in our projection and some of that is outside of the AMI business, certainly has some softness at Doble, we've had some softness at commercial aerospace business but I would say that the majority of or, if not all of what we've seen in our Aclara business has been as a result of that. So if I had to quantify it, I would say it's $10 million to $15 million or so, but that's just kind of a guess. I mean I don't think we could give you a hard number that would say exactly how much. Carter Shoop – Deutsche Bank: Great. As a last question, the PG&E orders in the gas business were down a bit here sequentially in the third quarter. Is that a good run rate to think about for the next few quarters, that $18 million in orders? And then should we start to see that tail off in the second half of 2010?

Yes, well, I think we have to get that projection from PG&E. I think it will be, as a minimum, going to be at that lower level because they have quite a bit of our product in the field that they've already acquired now kind of ahead of what they are doing on the electric side. Carter Shoop – Deutsche Bank: Great, thank you very much.

And our next question will come from Stuart Bush with RBC Capital Markets. Stuart Bush – RBC Capital Markets: Hi, Vic and Gary, can you hear me?

Yeah.

Hi, Stuart. Stuart Bush – RBC Capital Markets: My question is about the apparent delay in SoCal Gas vendor selection. I think originally you guys were thinking it would be this summer. Do you think that their regulatory risk of that project getting approved at the PUC has increased?

I really don't. We've not gotten any indication of that. I think part of the issue could be that they are also looking, it's my understanding they are also looking for some help with that from stimulus funding, but we've fairly recently got indications that project is still moving forward. It has been delayed some, but as I mentioned in the release, we think that vendor selection is going to be made here in the next several months. So, we've not gotten any indication that there is an issue with the approval. Stuart Bush – RBC Capital Markets: Okay. My next question is I'm hoping you can discuss the technology architecture of the Aclara electric solution. How many of the proposed wireless and data architecture standards that DOE is pushing at the NIST does your product meet? And more specifically, do you anticipate needing to redesign your system to be Internet protocol-based? And if you are, how long would that take?

Yes. Until they get all the standards in place, it's kind of impossible to answer how many we do meet or we don't meet. I would say, at this first list of 15 or 18 or whatever they came up with, there were no surprises there. But as you probably know investors meeting even as we speak to try to further develop those standards. So I think we are going to have to see what comes out of that before we can make a complete decision. Certainly, we are looking at having an IP-based system as well. I think that certainly is one of the areas they are heading toward. I think our ability to meet that, we certainly can do that. It would probably be sometime in the middle of next year before we would have a final product to meet that. But that's somewhat driven by what other standards come out of this whole process. Stuart Bush – RBC Capital Markets: Okay. Can you just clarify who else has bought the TWAC software other than PG&E?

The Aclara PLS software? You're talking about the new version or the older version? Stuart Bush – RBC Capital Markets: The new version.

Yes, we have delivered that with two of the customers in South America, and then we've also delivered that with several of the co-op customers here in the U.S. Stuart Bush – RBC Capital Markets: Okay. Alright, thanks a lot, guys.

The next question will come from John Quealy of Canaccord Adams. John Quealy – Canaccord Adams: Hi, good afternoon, folks. Just going to Doble if we could for a minute, I want to say, the last couple of quarters we talked about some unevenness in Doble. It seems like it was more hardware-driven than service-driven. Can you come back to that analogy for this quarter? It sounds like the service business will wrap up nice in Q4, but where are you seeing the bumps for Doble right now, for the period?

Yes, I mean it's very consistent. What we've seen – and it's a little bit domestic and a little bit international, but it's all on the capital, on the equipment side. As either I mentioned or it was in a press release, one or the other, that the service business is on budget or maybe even slightly ahead of budget. So what we are seeing are just is just a softness with the capital spending, equipment purchases, if you will. It's not that people aren't buying them; it's just that they aren't buying them at the same level that we thought, so if you have a customer that traditionally or we thought was going to buy half a dozen units, they buy four instead or they buy three instead. So they are continuing to buy the product. We are maintaining our presence and our market share. It's just a matter of them not spending at the same level that they did before. In fact, I said it in part of a meeting with our regional sales managers and our reps a week before last, and they feel like things are starting to come back a bit and some spending is starting to loosen up, but it's not to the magnitude that we thought it was going to be this year, obviously. But that's really the only place we are seeing the softness. John Quealy – Canaccord Adams: In terms of the PLS business class, if I understood Gary properly, $88 million in bookings, it's a good number given this tape that we're talking about delays in the space. Can you comment a little bit more about or characterize what's driving that business, given that rural end market? Is it product cycle? Clearly, it doesn't seem to be stimulus-related. Can you comment about pricing or margin profiles in that legacy product line?

Yes, we've been able to maintain our margins in that area. I think what we've seen is just the first two quarters were a little bit light in that area, so it's a matter I think of working with our channel partners more efficiently, more effectively, making sure that we are supporting them right and making sure that they are out with the right number of customers. So, some of this third quarter was kind of a manifestation of a lot of the work that had taken place in the first couple of quarters. Some of these projects are not projects that are going to deliver in the next six months. Some of those are multi-year projects as well. So you have some of the co-ops in there that are going to be deploying over the next couple of years. John Quealy – Canaccord Adams: Okay. And then the last two questions, more housekeeping, and I may have missed this. I apologize. Taxes for the Q4 period, should it go back to a normalized pro forma rate or how should we look at that?

Yes, I mean, I think we still have a little bit of a credit activity coming through, but for the year, it will be 33% is what I called out in the press release, so obviously to, this was 23% in this quarter and we had a little bit of favorable impact in the first half. So you obviously have to be north of 33% to make the math add to 33%. So I think if you use more of a normalized rate in Q4, where it blends across to 33% for the year, I think you'll be in the right spot. John Quealy – Canaccord Adams: And then lastly, certainly ESCO is no different than every other company in the world giving visibility in the economic crisis. But when you give the guidance for Q4 and have a fairly robust ramp in margins, given what we've learned in the last three quarters, can you talk about your level of conviction in the Q4 numbers in terms of being able to hit that? Is it fully discounts or how do you handicap that, given what we've all been through the last couple of quarters?

Yes, that's an excellent question. But as we said here, I mean we are 60 days out. I would say that we have the vast majority, we have almost everything that we need in backlog. So it's a matter of getting product out the door. The stuff we can get out the door, the things that we have control over I have a very high level of confidence in. But we, like everybody else, have some dependency on vendors and subcontractors and things like that. So there's always a chance that something like that's going to pop up. But obviously we thought long and hard about the numbers that we put out. If we didn't think those were achievable numbers, we wouldn't be putting them out. So I would say we have a pretty high level of conviction on our ability to do that. And the only caveat is if a customer pushes something out at the last minute it's kind of outside of our control. But everything that we've got control over I have a high level of confidence that we are going to make happen. John Quealy – Canaccord Adams: Great, thanks a lot.

And our next question comes from Richard Eastman of Robert W. Baird. Richard Eastman – Robert W. Baird: Vic, good afternoon.

Good afternoon. Richard Eastman – Robert W. Baird: Vic, could you talk a little bit about the investments that you're making in the filtration business, I presume at VACCO? And then also with the communications business, what are those targeting? Can you give us a sense of how much you absorbed in the quarter in each of those segments, and just kind of what you are targeting there?

Yes, I will let Gary talk about the numbers, but let me tell you about what we're really looking at. On the filtration side, the vast majority of what we're doing is at VACCO, and it's really in supporting the Constellation program, the crew exploration vehicle in particular and the launch vehicles that go along with that. We're fortunate that we've been really successful in winning projects on that. Those things, as you know, that type of business kind of manifest themselves out in sales in the out years, but you can only get so many chances to bid on a new project like this. So we have been making investments in a lot of bid and proposal activity, some are at activity to all support those. That's really paid off in real wins that are going to really help the business going forward. In the communications business, the biggest investments to date have been in our RF product as we get prepared to support some of the large deployments that we have, whether it be on the water, the gas side, and also in developing our electric product. That's something that we will continue to do – certainly not abandon what we're doing on the PLS side. In fact, as you know, we had some good success there this year. But I would say that the majority of those investments are really things that we're doing to improve the capability of the system so that it continues to be sellable in the future. So I would say the biggest development would be on the RF side supporting what we are doing on the PLS side as well.

Rick, just to kind of put some numbers around, for the nine-month period at VACCO, I would think of it as just a hair less than $2 million. Obviously, it was a little more heavily weighted in the first half. It has kind of come back a little bit because a lot of the projects that we are bidding on, we've turned the bids in on. I think I mentioned, in the last call, at that point in time, it was about $125 million worth of projects that we had turned bids in on, and now it is obviously higher than that as another quarter has passed. And then I think in Vic's commentary we said we could have scaled back on some of that R&D, and $2 million year-to-date is pretty meaningful in size as well as the projects we are pursuing. Relative to VACCO sales, which were about $32 million, you can see that's a pretty meaningful investment against that $32 million. But we have a very strong belief, based on our historical win rate on these Constellation projects and what we have a pretty good feel on what we are going to win going forward, that is money well spent. So, we elected to take a longer-term view, so that $2 million compresses the margin. So flipping that over to the Aclara RF side, I would say it is between $3 million and $3.5 million, relative to what we are doing on the network architectures that Stuart or someone earlier asked about, as well as new products and some of the existing enhancements to the things we have. Also, we don't really call out where we think we are going with this new facility and some of the efficiencies we're going to realize out of that. We did make a capital investment, besides this charge we took to exit the old facility, of roughly another $1.5 million in capital. So we are investing in a very down economy because we do see light at the other end. So I would use $2 million at VACCO and $3 million to $3.5 million on the R&D side at Aclara RF. Then there is a capital component on top of that. Richard Eastman – Robert W. Baird: Okay, okay, very good. Then just a question on New York City Water – I saw the order number. What did we bill on that project in the quarter?

Bear with me one second. Richard Eastman – Robert W. Baird: Sure. I was just going to ask you as well, co-op and muni sales in the quarter?

Yes, the revenue, Rick, in Q3 was $6.5 million. Richard Eastman – Robert W. Baird: Okay, so that should be a pretty good quarterly run rate now, well through '10?

That's what it feels like. Richard Eastman – Robert W. Baird: Okay, that's fine.

It has the chance to accelerate a little bit, because we are still at the front end of that thing. We've delivered to-date, we had a little bit in '08 and then the ramp up across the first three quarters. We are up to $11.6 million and roughly 135 million units on that project. So I would say we probably still have a chance to accelerate a little bit more than the $6.5 million, but it's certainly not going to go to $8 million to $10 million. It's not going to be that in Q4. I think a little bit more, a little more upside on the front of that. I apologize. What was the other half of your question?

About sales. Richard Eastman – Robert W. Baird: Co-op and muni sales, given the order number here in Q3, I know, Vic, you said some of that was multi-year, but were the sales on the co-op side, were they around $30 million or $32 million, or – ? I am just trying to get kind of a book-to-bill.

I would say high 20s would be a better estimate there, Rick. We had a little bit of international activity with some of the things that we started in Colombia that we announced a little bit earlier. But I would say $27 million, $28 million would be a good number to use for the co-ops. (inaudible) Richard Eastman – Robert W. Baird: Vic, do you think, as we go forward, obviously there is a carve-out for small projects, you know, in the stimulus package. Would you venture a guess to say when we get out into '10 and we perhaps see some of that money flowing, I mean can we see a 20% or 25% growth rate on that co-op and muni business? Is that unrealistic?

Well, I think, if you lump the two of them together, it might not be. It may not be quite that high, but it's just so hard to tell because it's really difficult to know how much that money is going to go there and where it's going to flow. There's money. They say they are going to have three tranches of it, that it may be like cash for clunkers that they end up giving it all out in the first – in its first tranche. So I think we're going to know a lot more about how much has been deployed and when it is going to hit in the next 60 days or so. But certainly we think that's going to improve what's happening, particularly in the co-op markets. Richard Eastman – Robert W. Baird: Because you know, if we flip over for a second on the stimulus funds, I know the caller earlier commented that some of these applications are being submitted with vendor names. We've actually struggled to find examples of that. In fact, we are maybe a little bit surprised that some of these applications are going in without vendors and price points or costs. Our feeling was – and just to try to get your opinion on this – but once these grants are made, do you think these are going to get – these projects are going to get re-piloted?

I don't know that they're going to get re-piloted. I mean, I think there are some of them where a selection hasn't been made. I think that may be the rule or not the rule, but I think there's a lot of them where selections have been made, decisions have been made where they're going to have to go through that process. There are some where people I think have already made the decision, and they will go with the person they have already selected. But I don't see a big pilot process as a result of this. Richard Eastman – Robert W. Baird: Because there was one very visible project that we were following. Two firms piloted; one had more success than the other. But curiously, when they submitted the application, they were very specific about suggesting that they would re-pilot. They weren't clear as to why, given the pass rate, but do you think that has anything to do with these kinds of emerging standards out of NIST or is that just an anomaly?

Yes, I think I know what you are talking about. I do think that does have, particularly with the large utilities and I guess maybe I kind of missed the switch there from the co-ops to large utilities but yes, I think some of the larger guys may well be leaving their options open until that is firmed up because I would say I'm not sure that there is anybody, day one, that's going to meet every standard that's going to come out there. It really depends on how much they allow utilities to have some flexibility, how much grandfathering they do, those types of things. So, if I were a large utility doing a large electric deployment, I would probably want to kind of hedge my bets until such time that something like that was firmed up because they could be putting themselves in a very bad spot otherwise. Richard Eastman – Robert W. Baird: Okay. Alright. Well, thank you.

Zack Shafran – Waddell & Reed: One, Vic, when you talked about Doble and the weakness because of the economy and the hardware piece of their business, I mean are we getting to the point where that business should just inherently begin to improve because people have to begin to spend, they have to upgrade infrastructure? Then I guess the second question is it seems like you didn't have a whole lot to say about some of the things that are going on in the international markets, in particular Asia or Central and South America.

Okay, yes, I think they're going to have to buy the products. Again just kind of going back to this call I had with the folks, there is a real demand, I would say, from the people that have the product, that need the product, that actually are using the product. The issue has been, like with a lot of companies, the clamps have been put on the capital budgets at the top. Obviously, we make the same kind of decisions here at ESCO with Gary and I. We are a lot more strict about what we approve and what we don't approve on the capital side. But certainly I would say that the demand is going to continue to kind of build up because there is a requirement to do this testing; they can't just ignore it. And that's a reason I'd say that our service business has really held up well. I think that's probably going to accelerate some as we start looking into the out years because, to the extent that they don't do some of this, some of the capital buys, then they are going to have to find another way to do it because the requirements are still there. So, fortunately, we can kind of play both sides of it, if you will. We can provide the services or we can provide the hardware. But I do think that particularly with Doble, what happens if they don't do this type of testing and honestly increase this type of testing, that the consequences are pretty dire. So I think they're going to do this one way or the other and I think we are well positioned to do it for them in a couple of different ways. As far as the international things, they are going well. There's not a lot to report there other than we continue to have good success with our pilots, lot of interest really throughout South America, primarily in Brazil and Colombia as we've talked about before, and you've got a good team there. The other thing is what we're continuing to see in Asia, they are really moving forward to deploy a lot of smart meters. As I've talked about in the past, we've got two really solid partners there and we are working through how best to address that market with those folks and on our own as well. So there's a lot of good things going on internationally. As I said in my opening remarks, the whole issue there is always timing. But the international market always appears to move a little slower than we hope it does, but the demand is certainly there. And I think, over time, it's going to come to fruition for us. Zack Shafran – Waddell & Reed: Thank you.

Sure.

Our next question comes from Ben Schuman of Pacific Crest Securities. Ben Schuman – Pacific Crest Securities: Hi, guys. When we look at that big PLS bookings number in Q3, did that reflect some lumpiness with some larger co-op deals or is that more of a sustainable trend?

I don't think we’re not going to see that kind of performance for the run rate. I think if you kind of averaged it all together, as I mentioned a couple of questions ago, they've been pretty light in the first two quarters and so we have a little bit of a catch-up. So if you kind of put the year-to-date together, that's more of what we have typically seen in the past. And again, a lot of the issue around this $46 million is some of that is going to be deployed over some period of years. So that's not, the run rate unfortunately we anticipate, but again if you kind of roll it all together, it's fairly consistent with what we've seen in the past.

Ben, I will add one thing to that, part of the reason on the spike is we do quite a bit of that business through distribution, and so for the first part of the year, as the economy impacts everybody, our distributors were kind of managing their inventories down to maybe not the bare minimum, but to an absolute minimum so they were at a point I think, as they approached the third quarter that they needed to have a reasonably significant restocking order to be able to get their inventory back on track so that they could meet the demand that was forthcoming here in the short-term. And so as we ship to them, they have the demand already laid out in front, they do not buy inventory in advance of orders, and so they were kind of working off the inventory they had had. Got to a point where I think it was critical that they needed to get this restocked. So I would say probably 20% or 30% of that might have been attributable to a distributor restocking situation, which again they are a relatively quick churn business, so they already have the demand on the other side of that to get these over to the co-op customer. So I wouldn't anticipate like Vic said seeing that number in Q4. But we've always talked about the co-ops and munis kind of being this $80 million to $100 million run rate type business for us is threshold. And the fact that we have $88 million booked so far gives us the confidence that for the year, we're holding our number to possibly being a little bit higher as the co-ops play through. So that's what feels pretty good about it. Ben Schuman – Pacific Crest Securities: Very helpful, thanks.

Our next question comes from Walter Nasdeo with Ardour Capital. Walter Nasdeo – Ardour Capital: Thank you. Good afternoon. Most of my questions have been answered, but I would like to circle back around to the AMI, again if I can. I certainly do agree with your assessment that going forward this is going to be very focused in a lot of different areas. My question is, as you're going out and bidding a lot of these jobs, are you starting to see any new participants getting involved? And if you are, do any of these present possible either partnership or acquisition type of scenarios for you?

I would say, for the base AMI projects, we really haven't seen any new entrants in the last six months or so, not that we're going to be competing with head-to-head I would say. What we have seen and I'm sure everybody has talked and asked a lot about are some of the larger players that have come in and kind of working around the (inaudible) of the whole AMI area. And we see that as a good thing because we do see them as partners, we see them as people that need our data to do some of the things that they are doing are people that really bring even a higher level of credibility to this market. So we see some of those folks not as threats, but as much as partners to participate in the market. But as far as core competitors, new competitors, we haven't seen that. Walter Nasdeo – Ardour Capital: Alright, good. Thank you very much.

(Operator instructions) And we will take our next question from Steve Sanders of Stephens Inc. Steve Sanders – Stephens Inc: Good afternoon, everyone. Just a follow-up on the international side I wanted to see if you could talk specifically about the electric AMI opportunity in Europe. How do you think you are positioned there? I think you have at least a few pilots going. Are you making direct investments on the sales and marketing side, extending some of the partnerships that you have in other geographic areas? Bottom line, how are you positioned there and what are your channels to market over the next few years?

Yes, our focus is really in South America and Asia. We have bid a few things in Europe. I don't think that is an area that we have as much focus on. I would say that the primary competitors are fairly well established there in-country and have kind of long-term arrangements with the lot of the utilities there. So we've not focused a lot of time on the European market because we do think our opportunities are better in South America and Asia. Steve Sanders – Stephens Inc: Okay. And then a follow-up (inaudible) just kind of a general comment on the domestic water and gas pipeline. I think there are a few very large deals that everyone is aware of and following fairly closely, but more the 100,000 unit to 500,000 unit deals on both the water and gas side, how would you characterize that pipeline versus six months to 12 months ago?

Yes, that's really continues to be strong. I would say, particularly on the water side, standalone gas you don't see as much, that's usually a combination with some exceptions, obviously, and I think those are places where we've been very successful. But the water business continues to be good. I think that will be the case going forward, and I think we are very well-positioned there. Fortunately, a lot of the utilities, even the smaller utilities are starting to see a real advantage of having a fixed network versus a drive-by system. So we do see the water market being very good for us going forward.

And certainly, the New York project that we are doing in New York, we are far enough along in that that some possible water customers that are currently in the pipeline that are pretty well down the decision-making process have spent time with New York to understand the process they went through to determine the selection of us and also seeing some of the early successes we are having. I think that New York City job is proving to be a very, very successful reference customer for us in some of these. As you said, Steve, 100,000 to 500,000, that's really the sweet spot for us in the water side. I think there's enough momentum going there that it's exciting for the short-term.

Yes, surprisingly, the one thing that I had not anticipated, I mean obviously, anytime you get something with New York City in front of it, it's going to play well in the U.S., but the thing I've been a little surprised by is how much play that's gotten outside of the U.S. So a lot of people are very aware that we have that project underway, and so, I think that's going to be a good reference customer outside the U.S. as well as inside. Steve Sanders – Stephens Inc: Okay, great. Thanks very much.

You bet.

That concludes today's questions. Now, I would like to turn the call back over to Mr. Vic Richey.

Okay. Well, I appreciate the interest and I appreciate everybody's questions.

Thank you.

Thank you.

That concludes today's conference. Thank you for attending.