Good afternoon. My name is Brooke and I will be your conference operator today. At this time, I would like to welcome everyone to the IDEX Corporation First Quarter 2008 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the call over to Heath Mitts, Vice President of Finance. Thank you, Mr. Mitts, you may begin your conference.

Thank you, Brooke. Good afternoon and thank you for joining us for our discussion of the IDEX first quarter 2008 financial results. Yesterday evening we issued a press release outlining our company's financial and operating performance for the three months period ending March 31st, 2008. The press release along with presentation slides to be used during today's webcast can be accessed on our company website at www.idexcorp.com. Joining me today from IDEX management are Larry Kingsley, Chairman and CEO, and Dom Romeo, Vice President and Chief Financial Officer. The format for our call today is as follows: First, Larry will update you on our overall performance for the quarter, across our company and the four business segments. Dom will then take you through our financial results for the quarter, and Larry will wrap up with the outlook for 2008 and the second quarter. Following our prepared remarks, we'll then open the call for your questions. If you should need to exit the call for any reason you may access a complete replay beginning approximately two hours after the call concludes by dialing the toll free number 800-642-1687 and entering conference ID 38180500, or simply log on to our company home page for the webcast replay. As we begin, a brief reminder. This call may contain certain forward-looking statements that are subject to the Safe Harbor language in today's press release and in IDEX's filings with the Securities and Exchange Commission. With that, I'll now turn the call over to our Chairman and CEO, Larry Kingsley. Larry?

Thanks, Heath and good morning everyone. I'll provide a quick summary first of our operating performance for the quarter. Orders were up 12%. Sales were up 12%. Operating income was up 11%. EPS was up 11% to $0.50, and free cash flow was up to $22.1 million, which is an 84% increase over last year. Our business units performed well, and our new acquisitions are contributing to our growth and profitability per our expectations. So overall, performance for Q1 of '08 was solid. If you look at slide 6, we've used this slide in previous quarter to summarize our current view of the markets, those that we serve, our position in them and also to summarize our plans for expansion. In short, our current view is relatively unchanged. The summary is one; as we've said, we're continuing to realize excellent growth in the markets that we've targeted and particularly those where we have acquired better organic growth capability. Two, our diversified end-market exposure and international content are serving us quite well. And three, a couple of our domestic end markets will experience slower growth as we've previously discussed, that's particularly the U.S. fire suppression market. All in, we anticipate strong organic growth in almost all of our industrial businesses and from our core health and science segments. Innovation and global sales investment will continue to drive the organic growth. At the same time where we've experienced some slowing we've gotten ahead of it and we've taken appropriate action. I'll now further detail our end market views as I walk through the Q1 '08 performance and outlook by segment, and I'll begin with fluid metering. Now on the next slide... slide 7. Fluid and metering grew a total 25% in the first quarter with organic growth of 5%. Operating margin was…

Good morning everyone, and thanks Larry. I'm on slide 11, orders and sales. First quarter orders of $402 million increased 12% from last year, increases of 25% at FMT and 7% within fire suppression were offset by lower orders within health and science and dispensing equipment. Sales increased 12% in total and that was 8% from acquisition and 4% from currency. By segment, organic growth was as follows: FMT posted an increase of 5% in the first quarter; health and science was down 2%; dispensing was down 6% due to timing of orders. And lastly fire safety and diversified products was down 4% in Q1 and, as Larry mentioned, increased revenue within both the band clamping and rescue tool businesses was offset by lower demand within fire suppression. Overall, organic revenue growth was in line with our expectations for both FMT and HST, was impacted by timing at dispensing, and slightly below our expectations at FSD due to fire suppression. Turning to Page 12, operating margin. Reported operating margin at 18.3% was down by 20 basis points from last year, driven by the impact of acquisitions and, to a lesser extent, foreign currency translation. EBITDA of $80.3 million was an all time high, and that increased 13% compared to last year and expanded 20 basis points. I'll walk through these components by segment in a few slides. Turning to net income on page 13, income from continuing operations was up more than 12% and EPS of $0.50 is 11% higher than last year. And again, that's versus our guidance of $0.46 to $0.49. The first quarter effective tax rate was 34% and, again, full year ETR will be in that range of 34% to 35%. Currently we're using 35% for our estimates for the year. Page 14, Fluid & Metering…

All right. Thanks, Dom. Before we review our guidance for the year and for the second quarter, I'll update you on our capital deployment strategy. We have an outstanding opportunity to deploy capital to increase shareholder value over our strategic planning horizon, that's the three-year horizon. Conservatively, when you look at our cash flow generation and our balance sheet we have the capability to deploy over $1 billion of capital over the next three years while still maintaining our investment grade rating obviously. At the same time, given the short-term volatility in the market we believe that a small share repurchase authorization enables us to optimize our capital position as well as our short and long-term shareholder return. But again, this does not represent a changed capital deployment focus towards acquisitions and obviously, our business model more than funds the organic needs of the business. Our primary areas of focus for acquisitions are certainly the fluid and metering segments, which is a large market opportunity for us to continue to grow in as well as the health and science targeted segments. We continue to build out our energy associated product scope. As you know we're also building on the recent EDS acquisition with a solid list of additional water and waste water measurement monitoring products as well as infrastructure service acquisition kinds of candidates. Within HST we also see nice opportunities within the core analytical and IVD markets as well as some of the other IDEX like opportunities within the segment. So to be clear, the signal here and our decision to move forward with a repurchase program is simple. Acquisitions are definitely priority one. However, we also think it's prudent to have a modest buyback program in place. Moving on now to the slide titled the 2008 Outlook and that's slide 19. Based on the results and assumptions we just reviewed, we reaffirm our growth rate of 13% to 15% for the year. Organic growth is expected to be 4% to 6%. Acquisitions will contribute 6%, and FX is assumed to contribute 3%. And based on that volume range, we reaffirm our EPS estimate of $2.10 to $2.18. And while we do not want to set a precedent for communicating quarterly guidance, again, given the volatility in the market now, we believe it's important that we communicate our short-term outlook. For Q2 of '08, we anticipate total sales growth of 14% to 16%, with organic growth in the fluid and metering and dispensing segments that are both anticipated to be high single digit organic rates, and HST, that's health and science, as well as fire and safety, in the low single digit organic range. We anticipate acquisitions will contribute 7%, and FX is assumed to add 3%. Based on this we estimate that second quarter EPS will be between $0.53 and $0.56 a share. So with that, we'll go ahead and open the line for questions. Question And Answer

[Operator Instructions] Your first question comes from Mike Schneider.

Good morning everyone. Just wondering if we could start out, Larry, with the dispensing segment and the outlook for accelerating growth. Can you reconcile for us? It looks like orders and certainly organic growth were down in Q1. What is it that you know about the order book I guess in April really that gives you confidence you're going to accelerate this business from negative organic growth to high single digit and I would even note against the double-digit comparison a year ago in Q2?

Sure, Mike. Let me run through it. I'll start with the global view of the segment and we'll talk more specifically about some of the elements within. As I mentioned in the prepared comments, we see that the foundation, frankly, for ongoing pretty solid base order rates globally is quite strong. We saw, as I mentioned, great new business opportunities materialize in the first quarter over in Europe. We see evidence of some solid orders in the developing country markets around the world. And some of that's folks that are going to architectural paints for the first time and going right to automatic dispensers as part of that process. Others who have been in the broader color pallet and are going from manual dispensed processes to the automatic-driven processes. So that's all good. There's been some concern. Obviously folks have raised questions in the last call with respect to domestic resi construction market and how that impacts the DIYs and the mass retailers for this year. Essentially, a long story short on the new store openings component to that equation, it's come in pretty much as we had anticipated and no real change of expectation there for the current quarter or for the remainder of the year. New store openings among the larger retailers are definitely down, but the replenishment programs continue. And as we've mentioned in the last call, there are a number of machine replacement programs, not just in the U.S. but globally as well, but particularly in the U.S. that we have included within our internal plans and are executing through the course of the year. We feel quite good frankly about this quarter based on line of sight visibility to those programs. And obviously for the remainder of the year, we continue to work those programs, and we obviously earn everyone. The real issue with dispensing as we've indicated in the past is it's lumpy. It comes in the way of projects. And while we definitely see a strong short-term outlook for the quarter, we continue to work to make sure that we earn every little piece of business on a go forward basis, both all the global pieces as well as the domestic ones. So --

And Larry... I'm sorry, in the second half, I'm sorry, the second quarter project shipments. Wouldn't they have already hit the order book in Q1? Or is it a case where they come in after the end of the quarter?

They would not, Mike. Yeah, it depends. In the case of some of these programs, they come in six weeks or so in advance, eight weeks in advance. In other cases, they come in as a book in turn pretty rapid fire. And that's been the case for quite some time. So anyway, the long story short, is obviously we've got we think obviously the best technology. We've got the fantastic infrastructure in place. We're very bullish about our global opportunities as well as our domestic opportunities. And we don't think that domestic retail issues as associated with resi construction or commercial construction are going to adversely impact their CapEx thinking for this year.

Okay. And then just a quick one on HST. At what point, do we lap or what quarter do we lap some of the program that... programs that came to an end? Is it 2Q or 3Q?

It basically ramps down in 3Q, Mike. And you'll see, as we've been saying, no change in view toward the end of the year that we lap those HST non-core OEM contracts that we've been talking about. And let me come back to the comments that I made in the prepared remarks with respect to the core HST growth. We're very pleased with our first quarter performance out of the target markets. And we think it's indicative of where we can go on a go-forward basis with some of the new products that we've introduced and some of the added machine content that we've realized as a function of that. This integrated systems group that we formed within HST is doing a stellar job, frankly, winning new customers and working together with existing customers to help provide those integrated systems that we're now adding more content per our customer machines. So we feel pretty good, frankly, about the core HST performance, and we will lap that OEM program activity by the time we enter Q4.

Okay. Thank you again.

You bet, Mike.

Your next question comes from Wendy Caplan.

Can you... a strategic question. Have you and/or the Board walked through, Larry, the exercise of whether you should be in the lower margin, lower demand, maybe higher volatility fire suppression business?

Well, first of all, good morning, Wendy. We... at the Board level we talk about the portfolio at least twice if not three times a year as part of our overall strategic thinking process and discussion set. And obviously, by evidence of what you've seen us acquire over the last few years, we have acquired very attractive businesses that are all in aggregate growing essentially per our white paper or acquisition pre-work assumptions. Where we have businesses that are low growth and low margin, certainly we would think opportunistically about what we might want to do with those long term if we don't think they'd become better performers. But I wouldn't comment with respect to specific businesses at this juncture. One of the things that if you look at the fire and safety, diversified products segment performance for the quarter, while volume was nothing close to what we would like, obviously we did a beautiful job mitigating margin performance as a function of that volume decline by maintaining or improving our cost structure. And as you remember, we started to get at that in late Q3, headed into Q4 of last year. So I frankly think the team's doing a nice job. That's inclusive of material, direct labor, but also fixed costs... working through a slower period here domestically for that fire suppression business. So the higher-level strategic answer, Wendy, is of course, we're always looking to optimize the portfolio. The operational portion of the answer to the question is, we're doing all the right things to act prudently in a lower-growth environment for that domestic portion of the fire suppression business.

I guess, Larry, to follow on what I'm having trouble understanding is how much of the margin improvement in that segment was mix related, versus sort of focus in terms of cost initiatives or whatever. Is there a way to tease that out a bit?

It's both. It is both. There was favorable mix that impacted margin for the segment, as rescue tools does well... and you know it is... as BAND-IT does well, and continues to forecast good growth opportunities. Both of those are higher margin relative to fire suppression. I'm not going to break it down on a go forward basis, but that bodes well from a margin standpoint for the segment. At the same time, we've done a decent job with our cost position. We've offset any of the material adverse impact as a function of the associated commodities portion of the potential increase year-to-date. And we've done a nice job mitigating, as I said, our labor, both variable and fixed, for fire suppression. The team's on it is the bottom line. We're going to continue to perform. That segment will yield nice operating margins and frankly, I think... given the two components that will grow through the course of this year, we'll at least offset the potential continued adverse impact associated with the U.S. domestic... excuse me, the U.S. fire suppression business.

Okay. And just to hit dispensing one more time. I'm still... maybe I'm not listening carefully enough, but I'm still not understanding why you think the timing issues of projects is behind us. And what happened to the smaller retailers that were mentioned as a significant problem in the last quarter?

Well, no, the smaller retailer portion of the dispensing market has been essentially flat for... going on a year now. So we didn't anticipate in our internal plans that the small independent store operators were going to be in a cash position to acquire equipment to any great magnitude at all this year, frankly that's played out.

That has --

Back to the timing question, order timing for dispensing has been an issue for as long as we've been in this business. And it is a lumpy business. We feel very strong about our Q2 growth prospects for dispensing. And as I mentioned for the remainder of the year while we earn every single one of those projects along the way, frankly given our technology and you've heard us talk about our DDX technology which is obviously now starting to displace all other forms of pump technology embedded in that equipment around the world, our chances of continuing to outpace the market we think are outstanding. So order timing has always been a lumpy issue and the book-to-bill timeframe for dispensing has been anywhere between eight weeks on the long end if you think about when we booked versus when we shipped to as short as three weeks. And I can tell you without getting into more customer specifics or order dynamics specifics that we feel quite good frankly about where dispensing is for the next couple of quarters.

Okay. And finally the capital deployment comment. The authorization program was pretty small, I worry that... I wonder why bother, and I wonder whether... I don't think so but I just want to be clarified that this doesn't signal a lack of acquisition candidates or opportunities for you.

No, that's a good point Wendy. We feel very good about our acquisition opportunity set, and no change position strategically at all. Again, focus continues to be in fluid metering and health and science. And if you look at the number of properties that are available it's still a good story and frankly our position to be able to acquire them is outstanding. So nothing at all changes with respect to our prioritization of capital deployment. We haven't had an authorized share repurchase program in place. This is really meant as a supplemental capital deployment strategic initiative for us. And certainly the focus for us and our shareholders anticipated that our primary efforts are all around, continuing to grow by way of acquisition.

Thanks very much, Larry.

You bet, Wendy.

Your next question comes from Matt Summerville.

First on dispensing, is that high single-digit organic growth forecast you have on slide 19? I just want to make sure, does that exclude foreign currency?

Yes it does, Matt.

And then with respect to order activity in the four segments can you walk through what organic orders look like during the quarter for each business?

Yes, sure.

Matt, it pretty much followed the sales growth. I think the key one to mention is FMT. It's four to 5%, actually closer to five for the quarter after pretty high comps when we look at last year. So they pretty much followed the sales organically that we disclosed earlier in the call.

Okay. And then with respect to HST, the instrument IVD and biotech side, can you talk a little bit more... in more detail about the performance of that portion of the business versus what you saw in the industrial/pneumatic side?

Yes, sure Matt. Basically again, we get awful granular in the way we talk about all our businesses. But if you were to take that portion of HST organically it's very high single-digit performance.

And then last question just on pricing. What are you seeing in terms of price '08 versus '07 across the company?

Pretty consistent with where we have tracked. On a full-year basis it will be between 1.5% and 2% this year and that this... as you know pretty consistent with where we've been a couple hundred basis points plus or minus over the last few years. While we're talking about price, while we think that we've done an outstanding job mitigating material costs year-to-date given some of the volatility in commodities and metals pricing in particular. We're also continuing to generate the capability to justify our price. So frankly, on a year-to-date basis there's been a lot of concern out there that I've heard with respect to copper in particular, but some of the steels and anything that's energy-intensive including pig iron given, in that case more demand than energy intensity. But those are all well within control. We've done an outstanding job, the inputs mitigation program. And we've not frankly had to in anyway use price to offset that. So I think as we go through the course of the year, obviously dependant on what happens with the various commodities that are bigger inputs for us, price will be a positive yield for us.

Great. Thanks a lot, Larry.

You bet, Matt.

Your next question comes from Scott Graham.

Hi, Dominic.

Hi, Scott.

I just wanted to ask maybe two questions. One is sort of an overarching question about the organic sales thinking for the full year being 4 to 6%. Now we start off the year sort of at a flat type of number, which is probably a couple points below where you were thinking. Therefore, to me it implies that you have... you feel better about certain businesses for the rest of the year. It sounds to me as if dispensing is one of those businesses that you feel better about for the rest of the year. Am I on the right track here?

Yes, you're not far off, Scott. I would tell you first that we have internal plans that we feel very solid about. First and foremost within fluid metering as the largest segment, within health and science as we just discussed, core growth in the core markets is shaping up very nicely. We see very strong evidence of a solid order book in dispensing per the comments that I made just a few minutes ago that if all continues, which we anticipate it will, will be a great story for the year. And the fire and safety segment is a tale of, again, as three sub-segments. Rescue tools is off to a nice start, and our visibility there for continued particularly strong developing nation growth looks very, very good. But total Rescue tools segment... sub-segment growth, I should say, is looking very strong. BAND-IT is doing just outstanding. So as we look at it, it's, frankly, starting to materialize almost exactly as we had anticipated, given our internal plans. You look at the order rate for the first quarter and apply that subsequently as we move into the second quarter, and we think we've got a pretty good indication of the back half of the year with a bottom build of our business forecast. It translates nicely into that mid-single digit organic expectation that we've talked about on a full year basis. Now, Dom, do you want to --

Yes, Scott, just maybe a bit more mechanical as well, and clearly we do expect acceleration on organic growth at FMT for all of the reasons Larry described. But also the comps, as you look at both HST for the contracts that we are getting out of but also within fire suppression if you think about coming off of the emissions standards that were part of the first half of last year growth rates, the comps get easier as well in the second half. So it's also a combination of those more tactical items that give us a high degree of confidence in our full year organic growth estimates and our second quarter, specifically for FMT.

Okay. So a fair amount of this confidence is really just I think the passage of time. You guys are kind of short cycle in some of your areas. As the years progress, you have better line of sight. Fair enough?

Yes. I think we've got great line of sight, Scott, and it's also all the things we've got underway with innovation as well, which is a lot more than just I would say the passage of time. There's a lot of detail behind what's going on in the growth side of the companies as well.

Okay. All right. Could you... Larry, you alluded to in your initial comments that the areas where you're seeing weakness you've gotten out ahead of that. Can you talk about that a little bit more?

Basically it comes down to actions that we took beginning late Q3 through Q4 and continued through Q1, principally around labor costs. Obviously we have done a beautiful job within our operating model leveraging productivity inclusive of variable and fixed costs on the positive side. I think what we've also now proven to ourselves is that the same capability applies and if we have isolated areas of softness, we know how we can cost mitigate what we have. I think the bottom line, Scott, is I'm not going to get more specific in terms of businesses and sites and things of this sort but it's a pay as you go approach that we've taken. That's allowed us to maintain a very strong cost position where we've seen isolated areas of softness. And that's obviously what hopefully what good business leaders are doing.

Okay. That's helpful. My last question is really the one that I ask all the time, Larry. Are you comfortable with taking another $20 million of costs out this year overall?

Very, very comfortable.

Is that inclusive of those actions or exclusive of those actions?

Exclusive.

Thanks.

Yeah.

Your next question comes from Ned Armstrong.

Thank you. Good morning.

Hi, Ned.

Can you talk a little bit in the Health segment about the pneumatic? You had alluded in the press release to it being the weaker as it has been for a while now and what you're doing there to make the business better specifically on both the revenue generation side and the cost side?

Sure, Ned. The... again, let's go back up to the portfolio first to make sure that we're thinking strategically about where we place our resource bets. We have invested or re-invested very heavily in Health and Science in total, particularly focused on the three markets that we outlined, which are the analytical instrumentation, the in vitro diagnostics equipments and the various biotech applications. We think that on the combination of growth out of those sub-segments plus the fact that we can offer very nice high level systems solutions that we can grow here better than anywhere else within Health and Science. So the overall, you know, R&D, marketing, the new product initiative focus, is on the highest growth components within the business. At the same time, we're doing a nice job, winning new business opportunities within the segment that you... the sub-segment there you called out, the pneumatics product line within Health and Science. And that's a very profitable business, that's done extremely well. Our sales teams are continuing to go after higher growth within that sub-segment, relative opportunities. And what those entail are things like the lab equipment, the dental equipment, you know, places where the so-called clean and quiet air applications are globally. And I think for the remainder of the year, without quantifying it here, what we'll see is great international growth out of the business, offset again by slower domestic performance. So we definitely are taking at a higher level, the right reinvestment approach for Health and Science into the highest growth in what we think are future best opportunity set customers for us. And within that sub-segment, we're also re-investing as well. Sorry, Ed or Ned.

Yes. And within the sub-segment of the pneumatics, are there still opportunities for significant cost reductions or is the larger part of that effort been accomplished already?

There is cost opportunities for us in all of our businesses. And as you know, that's the model just per the last question. We'll see incremental savings across the company this year that'll be on just a pure productivity basis better than what we've ever achieved. I'm very confident of that. And that same methodology applies within the pneumatic segment. So there is certainly good cost and productivity opportunities within the business there.

Okay. Then moving quickly to the Fluid business, you had mentioned some of the areas where you saw growth opportunities being energy and water. And most of your technology is positive displacement, but there's room for centrifugal pumping technology in both energy and water applications. Is that something you've been thinking about? Or do you want to stick more with your core technology?

We don't really look at it as a function of PD technology versus other technologies. We look at it more from the standpoint of where are the more application-intensive solutions, where can we bring the bear more of our technical expertise, some cases centrifugal products entails some of that and we do have centrifugal product that we apply in energy and chemical and water, but generally speaking, we like the higher tech, the higher application intensity products and those tend to be ones that are more PD in nature. So we always look on an acquisition scouting basis as a variety of technology, some that wouldn't be typical PD technologies. Organically, we are focused more on those that continue the kinds of IDEX niche products for great niche market like applications and those do tend to be more PD. But to give you an example of where we have evolved even beyond traditional PD, you are familiar with what we have done in energy with organically going after new turbine flow meter technologies and we talked a bit in this call about one that's specifically designed for new crude applications. At the same time, we've gone as you know with the acquisition of Faure Herman now into ultrasonic measurements capabilities, which is, really if you think about it from a technology and what's inherent to the product, a step further forward. So generally speaking, Ned, we are interested in those that are higher tech end products and those that have a lot more application content to them. At the same time, in the targeted space where there are centrifugal opportunities that fit that criteria, we would selectively look at.

Okay, good. Thank you.

Thank you, Ned.

You next question comes from Walt Liptak.

Hi, thanks. Good morning, guys.

Hi, Walt.

Dominic, the first question is for you. You may have mentioned it and I just missed it, but I wondered about the organic orders by segment?

Right. As I mentioned, it pretty much followed the organic sales; FMT was 5% and the others followed the sales numbers that we talked about earlier.

Okay. Then just looking at the dispensing part of the business, have the... some of the comments that Larry made about the international opportunities or the big box store replenishment cycle, have you... was there a backlog here that you are shipping out of or was there a pick up in orders in... at the beginning of the second quarter?

It's four wall and group specifically around Q2 order activity translating to Q2 sales activity, and not about business shipping out of backlog.

Okay. So you saw orders in dispensing pick up, were they related to the international part of your commentary or the replenishment part?

Both.

Okay. I wonder if I could ask you about the replenishment... about the international opportunity. What part of the world... you mentioned Latin America, is it box stores in Latin America or is it small paint retailers? Can you talk a little bit more about that market?

Sure, Walt. Actually in the prepared remarks, I talked first about mainly Eastern Europe and the CIS states and where in fact there are now more interested retailers in selling architectural paint. So that is a welcome move east from Western Europe, and we anticipate that we're going to continue to see growth there. Back to your question though with respect to Latin America, Latin America, depending on the country market, has selectively been in architectural paints for several years. But most of it's been in manual dispensed format. And it's not really been in the big boxes per se; it's been in a large number of retail outlets, some following that European business model, if you remember where the paint company owns the store.

Right, okay.

Some of it following the hardware store model that we've talked about, which is either a co-op or an independent, who is selling paint. And then also some of the more big box like opportunities there. But the numbers of outlets that exist, frankly, still in some of the developing parts of the world that we see as architectural paint machine applications, particularly for the automatics going forward, we think in aggregate represents a pretty nice multi-year growth opportunity.

Okay, good. And then the last question I have is just on the Fire and Safety part of the business. What's pricing like for those products? You mentioned that kind of across the board you're getting price, but is there something specific going on with that fire truck pump market?

Nothing that would fall outside of the norm for us. We're seeing for our new fire suppression equipment, I think appropriate pricing is the way to characterize it. We're very cost competitive with our integrated modules and so many of the truck OEMs are taking advantage of the full installed cost advantage they're getting there versus what they associated as their internal make total cost. So that's continued to go extremely well. And on a component basis, I think there's nothing really remarkable to call out.

Okay, great. All right. Thanks, guys.

Thank you, Walt.

Your next question comes from Ned Borland.

Hi. Good morning, guys.

Good morning, Ned.

Just one quick question on the guidance. Is there any assumption for the share repurchase program embedded in the guidance range?

No.

Okay. All right. Then that's it, that's all I have. Thanks.

Okay, thanks.

Your next question comes from John Franzreb. John Franzreb - Sidoti & Company: Good morning, guys.

Good morning, John. John Franzreb - Sidoti & Company: I'm just trying to get a better understanding what's going on in fire suppression. Could you talk a little bit about what kind of order degradation you're thinking about this year? And maybe elaborate how much of that is North American, which I think a vast amount of it is. But how much do you ship overseas in that business?

Yeah, we can break down the domestic versus international content in rough form. But the order rates that we have seen from the business, the sub-segment, again that's one third of the segment, that's fire suppression, for that piece in total for Q1 and Q2 are pretty close to what we anticipated and talked about in the last call. There wasn't any radical surprises there. There's a lot of discussion in the U.S. portion of that segment of a trend up toward the second half of the year, so the truck builders in particular are thinking that they're going to see a more solid order book in the summer through the back half of the year. We have really not factored all that in to what we have rolled into the guidance here. So if you look at it all up, we're still taking let's say a relatively conservative view of municipal spend for fire suppression U.S. for the back half of the year. And then, Dom, you want to break down the...?

Yes. It wiggles a bit, but it's in the 30 to 35% range international for fire suppression. John Franzreb - Sidoti & Company: Okay. Thanks, Dom. Now, why would the truck builders be assuming a rebound in the second half, Larry?

If you remember, what took place here is that there was a pre-build through the course of '07 as a function of the EPA diesel emissions changes that took place. And so there was a bit of a hangover in the back half of last year, after a fairly strong start to '07. And so, on a comp basis, the overall unit volume of trucks built sequentially is not ramping all that fast. It's an easier unit volume comp from the industry in the U.S. On top of that though, there is still a fairly strong indication that where municipal spend is going to get allocated for trucks for the back half of the year, they're not going to see any degradation there. So, again, if you look at the components of what the back half of the year for fire suppression entails, the international piece, we don't see any significant change, it should stay decent. The U.S. portion, we don't anticipate that there's going to be any form of degradation. And if you look at just sequential performance, it ought to stay fairly consistent with where we've been. The other thing is that as we've talked historically about on a IDEX specific basis, as we get content per truck, i.e., modules versus components, that helps out us as well. And we continue to see a lot of the truck builders working together with us to design new, specific modules for their truck applications. And we think that in total represents a pretty decent outlook for the back half of the year. John Franzreb - Sidoti & Company: Great. And one last question. You touched on pricing a couple of times, but has there been any part of any of your businesses that pushing through pricing has been significantly more difficult?

There're always and if you think at the number of customers we have across the various niche businesses, there's always going to be customer situations where we're working in a competitive environment and we are very price competitive. However, where we demonstrate value and do so continually, that tends to generate a positive price equation. So if you look at it by segment, I'd say the answer is no. Even when you get down to logical end markets of like customers, there's still not a real correlation there as it relates to price in this environment versus price in a super high growth environment. John Franzreb - Sidoti & Company: Okay, good. Thank you very much.

You're welcome.

Your next question comes from Mike Schneider.

Dom, I was wondering if we could just get a dollar amount that is being lapped as it relates to HST and the pneumatics division relating to the products that have been pruned or programs that have been pruned. I'm trying to calculate indeed what the just the mechanical boost is to the organic growth rate, if you have that...?

Yeah. Well, I would call your attention to our original guidance for the year; we called out 400 basis points in the segment. So that's the math on the growth rate. So, it's going to wiggle a bit by quarter, but if you look at our organic growth rate any given quarter, there's that type of an impact in the quarter. And the other thing I'll say that we're reporting Isotech as acquisition growth, but that's being very much integrated with our integrated systems approach here. So you'll get a pretty pure view of the accounting, but fundamentally, Isotech is all part of that core growth rate as well. And obviously we book keep it as acquisition, but we're seeing some nice pull through on our existing products. So plus or minus, Mike, it's 400 basis points a quarter of impact, organic growth rate that we've described.

Okay. And then in the FST division, just margins during the quarter were huge because of the mix, presumably lower fire suppression and higher everything else. Should we expect... is there anything unsustainable in this margin assuming that fire suppression does remain weak in 2Q and presumably at least into 3Q?

I think, Mike, the one thing that we feel very good about as it relates to margins in the segment, particularly as you've witnessed what we've done to manage through the stainless spike... stainless has come back down. But if you look at the primary area of commodity concern in the segment, it's stainless. And our team just did a fabulous job, absolutely fabulous job of working through that over the last six months. And so now, we're still anticipating volatility for sure in many of the metals for the remainder of the year. But we think that there's certainly not going to be an adverse material impact as it relates to FST. So otherwise, no, I think the answer to your question is we feel good about margin capability.

Within the band clamping business, when steel was... or stainless was raging really in the back half of last year, was that pricing put through as a surcharge or just a list price increase?

There's a combination of price actions that apply depending on the channel and/or customer situation. And as you know, in most cases, not just specific to that business but total, we tend to sustain price. So less surcharge, more price.

Okay. And then just another margin-specific question. In Dispensing, the margins are hugely volatile, and I'm trying to understand the interplay. If you've got more project-related business going out domestically in 2Q and for the balance of the year, should we see the return to this upper 20s range in margins? Or does that type of mix actually depress the margins?

Mike, we won't give you an actual percent, but when you look at Dispensing in total, historically our margins U.S. versus Europe and foreign are pretty consistently equal in terms of the rate. What you really see with Dispensing if you look even sequentially or year-on-year, it's really about volume. And the lever point that, you know, call it the $50 million kind of revenue rate, once you see the leverage on that additional volume above that, it levers at a significant year-on-year. So I won't call it high 20s, but clearly, you see a higher margin rate than what you would see in Q1 based solely on volume. Mix tends to play a lesser part of the equation within dispensing.

Okay, great. Thanks again.

Thank you, Mike.

Your next question comes from Ajay Kejriwal.

Good morning, gentlemen.

Hi, Ajay.

Just following up on that margin question on Diversified, I know you mentioned stainless steel spike. So wondering if you could help us understand if there was some benefit from lower-priced steel inventories, because of FIFO accounting, was that something that helped margins in the quarter?

No, Ajay, that wouldn't be the case. The primary help, as Larry mentioned, besides the volume is the mix of both rescue tools and BAND-IT within the quarter.

So the takeaway is that the margin improvement is sustainable, meaning year-on-year improvement? Because margins were record highs in the segment if you look across several years, so and... sounds like it's not material-related, so it's probably sustainable?

Yeah, relative to our guidance, we're not going to provide second quarter rate, and in the full year, we didn't as well. I think the thing to remember within the segment is, it's a third, a third, a third in terms of the revenue splits. And obviously in the second half, the comps get easier for fire. So when you... this is more of a modeling discussion, but when you play out your assumption within the segment for mix, you could have a bit of a wiggle when you look at the suppression side of the equation. But we didn't provide those numbers, so it's kind of all baked into our thinking around the EPS totals that we provided, Ajay.

Sure. Maybe just a question on segment Organic. Back in February, the fourth quarter call, you had said that Fire Safety segment should be roughly flattish. Organic ended on 4%, and sounds like BAND-IT and rescue tool did a little better than what you were thinking. So was fire suppression a lot worse in Feb and March?

I wouldn't say a lot. In my prepared remarks, I think we did say that both rescue tools and BAND-IT had good quarters. I wouldn't say they were way in excess of our expectation, but Fire was a bit below what we expected in our original guidance, going into the quarter. But these are relatively small dollars on a dollar basis, relative to the percentages.

Great. Thank you.

Thank you, Ajay.

[Operator Instructions]. Your next question comes from Charlie Brady.

Thanks. Good morning, guys.

Hi, Charlie.

Just on a sort of broader picture with IDEX, strategically. You know, historically, you've been a relatively short cycle business, and I'm just wondering, now we've layered in several more acquisitions over the past couple years, could you sort of walk us through where you see kind of visibility among the four major segments and maybe even some of the sub-segments? Has that stretched out? It sounds as though it has.

Yes, definitely, Charlie. I think if you go back, look at the last five years of our acquisitions, which have principally been Fluid Metering and Nature as well as the Health and Science segment acquisitions, and you look at as I think I mentioned in the prepared remarks, Fluid Metering now has three-quarters of its revenue in those segments which you either want to call them longer cycle or later cycle segments, which are, we think sustainable through the economic current issues. And that's water, it's energy, it's pharma, it's ag. So we believe that Fluid Metering versus where it was just five years ago is repositioned much larger segment and very good stead frankly, to continue to grow, so that is net-net, all by itself a great story. Health and Science is really not a traditional cyclical kind of business, and I don't think you'd call it a short cycle business. The equipment applications that we're on, we think continue to respond to all of the demographic issues that we're all familiar with. And so for analytical instrumentation, which is doing well globally, in vitro diagnostics application, the equipment that we're on, we see continued nice development opportunities as a function of market. But, again, also because we think we can bring more to bear in the equipment. And for a lot of the biotech applications serving pharma, both small and large; we think those dynamics play out well. If you look at the total company, the portions of the portfolio that are shorter cycle are certainly the fire suppression piece that we've just talked about and, to a lesser degree, rescue tools. And we think rescue tools has some nice fundamental growth drivers as a function of going after all those global markets that we've just begun to scratch the surface on. And then Dispensing, you probably correlate with more shorter cycle activity, but again, here we think replenishment offsets what are the demand patterns. So it's tough to I think cleanly characterize us as a short cycle business; at the same time, the acquisition content over the last five years has certainly positioned us into a longer cycle format.

And with respect to ADS, you've had it for almost four months now, any surprise, either good or bad?

It's a great business. It's a great business. We love to model it. It's a really good question actually. If you think about what a lot of the folks are talking about with respect to water right now, because water still gets a pretty big moniker, some folks are talking about disappointments in water because municipal spending is not making its way to project activity. The beauty of ADS and what we want to do in this space is that it's mainly reg-driven. And so it's around making sure that bad water doesn't creep into good water at the end of the day. What we're doing is the flow monitoring and the associated infrastructure analysis that then generates the repair or the new infrastructure. And that portion of what we see within the total water space, we think bodes for great growth opportunities. We're very pleased with the backlog of the business. We're very pleased with the order activity that we've got right now looking forward. So as I said, both organically and now also acquisitively, we want to build on this business and do so on a global fashion.

Thanks very much.

Welcome.

Your next question comes from Amit Daryanani.

Thanks. Hey, just looking at inventory, it was up about 18%. ARs were up 22%. Could you split up and tell me how much of that was organic versus FX and acquisition-driven?

I don't have the splits right in front of me, but if you look, ADS and FX drove a lion share of both and the rest of it pretty much followed our... on the receivables side, our revenue growth. On inventories, we increased a bit more organically than you might have thought versus our first quarter growth, and that's primarily due to our view of the second quarter primarily in FMT. So, a bit of an inventory increase even when you look at it organically. But ADS, just to give you that kind of... the number was about 28 million of receivables and yet a project business that brought a lot of receivables in terms of the projects with it. So FX was another piece of that as well.

That's helpful. And then just looking at the HST segment, last call you guys spoke about two, I think actually three programs that were getting pushed out from Q2 to the back half of '08. Are those still on track to ramp in the back half of '08? Could you just update us on that?

I would say no significant comments there. We're still assuming and we guided with all things considered. We anticipate that in any situation where you've got an OEM business, you're going to have some pushes and some pulls. But at this point, we're assuming consistent with what we've talked about previously.

All right. And then just the Dispensing side, I realized you've got some program push outs which led to the 6% down organic number. Next quarter, you guys are looking at high single-digit growth. How much of that is because of those push outs from Q1 to Q2 versus just new sales and orders in Q2 per se?

Well, it's all part of the same formula. It is orders that are timed that pushed from Q1 to Q2 that represent a portion of that growth. And in Dispensing, when you look at it sequentially, you're always going to see that kind of behavior. So the reason that we feel very confident in the quarter about talking through what the organic expectation is, is because obviously we have visibility around things that were committed as first half of the year activities to us.

So I guess, well maybe looking at it kind of first half of '08 versus first half of '07, Dispensing is flattish. Would that be reasonable? And then you expect a big acceleration or an acceleration at least in the back half of '08?

Let's see. I think that's a fair summary on the first half/back half in total. Again, as my comments outlined earlier, in Dispensing in the current environment, we work for every single project opportunity. But we see a strong Q2. Our visibility into Q3 bodes for what we think is a good solid quarter. And you know, we're working to make sure that the whole year in total works out quite well.

All right. And then just finally, looking at this quarter, you guys beat the midpoint of your guidance about $0.025 or so, annualized, that's almost a dime there. What refrains you from increasing your EPS range at this point or moving to the high end at least?

We see, frankly, an opportunity to continue to improve with where we had guided at the beginning of the year. But given the volatile market we're living in and what we see in total for our top line expectations, we think the EPS range is a solid flow-through assumption set based on what we have bottom built in our forecast. So we think that as we said, Q2 will be as guided. We expect to, frankly, to do quite well on an organic basis. In the back half of the year, we're working to make sure that we deliver at least what we've talked about in our beginning of the year annual guidance. The acquisition contribution is obviously not factored into any of that.

Perfect. Thanks a lot.

You're very welcome.

At this time, there are no further questions. Do you have any closing remarks?

Well, let me just simply say that we're very pleased with our start to the year. Given the current environment, we've done a nice job delivering strong P&L performance, and we anticipate as we've talked through in all of the questions that we'll see solid organic growth in Q2 and as we head into the back half of the year. I'd like to thank everybody for joining and we look forward to the call in three months.

Thank you. This concludes the conference call. You may now disconnect.