Welcome to the MSA Second Quarter Earnings Conference Call. My name is Polat and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Mr. Ken Krause. Mr. Krause, you may begin.

Good morning everyone and welcome to our second quarter earnings conference call for 2014. Joining us on the call this morning are Bill Lambert, President and Chief Executive Officer; Stacy McMahan, Senior Vice President and Chief Financial Officer; Ron Herring, President of MSA Europe; and Nish Vartanian, President of MSA North America. Our second quarter press release was issued last night and is available on our website at www.msasafety.com. This morning, Bill Lambert will provide his commentary on our quarter. Stacy will then review our financials and then Bill will conclude with his closing comments. After that, we will open up the call for your questions. Before we begin, I need to remind everyone that the matters discussed on this call, excluding historical information, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including without limitation, all projections and anticipated levels of future performance, involve risks, uncertainties, and other factors that may cause our actual results to differ materially from those discussed here. These risks, uncertainties, and other factors are detailed from time to time in our filings with the Securities and Exchange Commission, including our most recent 10-Q which was filed on April 23, 2014. You are strongly urged to review all such filings for a more detailed discussion of such risks. Our SEC filings can be obtained at no charge at www.sec.gov, our own website, and many other commercial sites. In addition, we have included certain non-GAAP financial measures as part of our discussion today. These non-GAAP financial measures should not be considered replacements for GAAP results. Reconciliations to the most directly comparable GAAP measures are included in our press release and on the Investor Relations section of our website. And with that, let me introduce MSA’s President and Chief Executive Officer, Bill Lambert.

\Thank you very much Ken and good morning everyone. As always, I want to begin by saying thank you for joining us this morning on this conference call and for your continued interest in MSA. Presumably, all of you have seen our second quarter press release issued last night and have our financial figures with all comparisons corresponding to the equivalent period in 2013. I’ll begin this morning by reviewing the highlights of our second quarter and I will talk about some of the exciting new core products that we’ve launched over the past several months. I also will share with you further details about some important corporate initiatives that we continue to focus on and after that, I will turn the call over to Stacy for a more detailed review of our financial results, then we’ll open up the call to your questions. Second quarter sales were just over $282 million, which as you know includes continuing operations only and excludes $11 million of discontinued operations revenue from our South African distribution business and our Zambian operations. Revenue of $282 million reflects a 1% decline from the same quarter a year ago on both a local currency and reported basis. When comparing to the same period of 2013, it’s important to keep in mind that the second quarter of last year was particularly strong from a revenue perspective most notably in the product areas of breathing apparatus and fixed gas and flame detection systems where we delivered a large number of mid-size shipments in this time period that drove double-digit core product growth. Second quarter SCBA sales this year continue to be challenged as we await federal government approval on our new SCBA the G1. As you know, generating profitable growth in our core product areas is an important…

Thank you, Bill and good morning everyone. I will now share some further insight into our second quarter financial performance. Additional information will be available when we file our Form 10-Q with the Securities and Exchange Commission later today. As Bill mentioned, sales from continuing operations in the second the quarter were $282 million down $3 million or 1% from the prior year on a reported and local currency basis. Stronger growth in head protection, portable gas detection and several key adjacent products was offset by continued regulatory delays affecting SCBA revenues in North America and a lower level of fixed gas and flame detection shipments. Looking at the sequential quarter comparison, local currency sales have increased by 6% compared to the first quarter, on improved performance across all reporting segments. Notably, North American SCBA and head protection were key contributors to the increase of 15% and 16% respectively, driven by sales of new products such as the M7XT SCBA launched in April and the Fast Track 3 suspension system launched earlier this year. While order activity was choppy in the quarter, backlog is healthy reflecting strong demand for fixed gas and flame detection and SCBA comprised of both M7XT and G1 SCBA orders. There were portion of our backlog orders are scheduled for shipment in the next several months, I do expect challenges to persist into the third quarter as we navigate the regulatory approval process in North America and enter the traditional summer holiday season in Europe. As you may remember from the first quarter, we have streamlined our discussion on sales and I will comment on two views of our sales performance, by product group and by geographic reporting segments. Let’s start with our core product sales performance in the quarter where local currency sales in our…

Thank you, Stacy. While we continue to face challenges in certain markets in the second quarter and we expect certain conditions to linger into the second half, I continue to believe we are positioned well and our strategy continues to drive improved performance. We view these challenges as mostly temporary and I am cautiously optimistic that we are well positioned to see an uptick in performance as we move towards the end of this year. We remain deeply committed to our continued focus on driving profitable core revenue growth, developing innovative products with voice of customer feedback, executing key operational excellence programs and completing important strategic initiatives that will enhance shareholder value for years to come. I want to thank you for your attention and your interest this morning and at this time, Nish Vartanian and Ron Herring have joined Stacy, Ken and me and we are happy to take any questions that you may have. Please remember that MSA does not give what is referred to as guidance and that precludes most discussion related to our expectations for future sales and earnings. Having said that, we will now open the call to your questions.

Thank you. We will now begin the question-and-answer-session (Operator Instructions). And our first question comes from Edward Marshall from Sidoti & Company. Please go ahead. Edward Marshall – Sidoti & Company: Good morning everyone.

Good morning, Ed. Edward Marshall – Sidoti & Company: So, first one I want to touch, if I could on the operating expenses what have peeled back a little bit but probably not as much as I would have thought. And Stacy, I was wondering, I know in prior quarters, we talked about product liability expenses. We also broke out in this call about some details of Europe and I am curious if that’s detailed in the restructuring expense or is there additional drag on the operating expenses as well? And then also, if you can quantify any drag to the SCBA efforts now that may subside that you start to see some revenue?

Okay, let me give you some color on the SG&A expenses. First of all, I want to clarify that in this quarter, there were no restructuring expenses for Europe 2.0, although that program is not complete yet. So that just didn’t happen to be any recognition in this quarter. So what occurred in SG&A however is and some investment in opening an office in our new principal operating company headquarters in Switzerland and some relocation cost you see hitting our SG&A expenses. We also see defense fees for our legal strategy to recover our insurance receivable and in the really – product liability expenses in the quarter. We continue to have some expenses associated with our corporate restructuring as we execute globally the restructuring plan. And in addition, we have spent some money in the quarter on our rebranding efforts associated with our Centennial Celebration and on strategy refresh work that we are doing. Those are the primary things aside from some marketing cost associated with product launches. Edward Marshall – Sidoti & Company: Such as the SCBA?

Yes and the other products that Bill and I have talked about in prior quarters. Edward Marshall – Sidoti & Company: As far as the SCBA, can we quantify any of the drag that’s produced in the quarter, I mean, you just talked about shipping some products, I assume there is some salesmen out there as well and so forth. I mean, is there a product drag in the SG&A line that I should be thinking about?

No, not in the SG&A line, not in the SG&A line, not material. Edward Marshall – Sidoti & Company: And then secondly, if I talk about the fall protection a sec, and Bill you highlighted a particular product that was rolling out and I am curious you’ve been kind of smaller player in North America relative to some of the other businesses and other segments in the core product group that you sell into. And I am curious is this particularly product this change in regulation, potential for a competitive advantage for MSA and therefore a share gain or is this just – is there is some unique to your new product that others cannot provide, maybe you can give me a little bit more detail on that?

Yes, sure. I think in the big scheme of things Ed, it’s probably not so unique where we have first mover advantage. All the major competitors have been a part of the new standards that have been promulgated here for arc flash protection for a number of years. So, I would not go so far as to say that we have significant competitive advantage in that regard or first mover advantage in that regard. All the competitors have been well aware of this and are moving at probably the same pace. But, on the other hand, I would say that there are some new unique and difficult to copy advantages that we have put into our new products that we think can provide us with some competitive advantage. And so, sure there are some differentiators that we have and how we are then taking our global scale and applying some of these new products to global markets that would have the same kinds of concerns, I think that also provides us with some opportunity to take share. Edward Marshall – Sidoti & Company: Is it still fair to characterize this business as more of a global focus for you and less – all of your businesses are a bit less on North America here and more so on the global maybe emerging markets kind of area for growth?

It definitely is a global focus for MSA. Edward Marshall – Sidoti & Company: Okay, and then finally, you talked about the SCBA rollouts, you’ve mentioned just still there is just three producers approved and that means to me that there is still rather large customer not approved ahead of you in the queue? Is there any chance that you guys can kind of leap frog them in the queue or has those discussions kind of transpired or – it seems like that’s for hold up there, right?

Well, it’s one of the many hold ups, that’s right. As I indicated in my comments, the approval process has been frustratingly slow for a number of different reasons there are two major competitors who are also in the queue along with us in the G1 and they do not currently have a product that meets that certification requirement. So, they are obviously doing all that they can to make sure that they get a product out there in the market. We at least have the M7XT SCBA that we are successfully selling and marketing and two other competitors, one major competitor and one smaller competitor also have approval to the new standard. As far as leap frogging in the approvals process line with the federal agencies, I think that to my knowledge is impossible. And I am not aware that that is occurring in any way, but for all the things that we have talked about over the last six months where the test agencies had problems in their labs. They don’t have available resources, they don’t have available manpower. It has just been really, really frustrating for us as well as those competitors who don’t currently have a product approved, I am sure. Edward Marshall – Sidoti & Company: And just to clarify, the G1 has not been inspected as of yet or hasn’t been looked at all?

Oh, no. It has been looked and it’s in the process. It’s in the process, we had really fully expected it to be approved by now by late July and we meet with our regulator on a fairly frequent basis and they give us updates on where we stand and just recently told us that it would likely now be very late quarter before we get it through the system. That is based entirely on their resources and their capability. Edward Marshall – Sidoti & Company: Has there been any hold ups on your end I mean there is certain things not been approved and you had to go back and redraft there?

Yes, I mean, there is a bit of iteration that goes on in that sense Ed, but nothing that we feel is of significant nature in others. It’s a fairly complex process both from a hardware standpoint as well as all the documentation and quality plans that they inspect and review and there is always a little bit of iteration that goes back and forth, but I would not say anything that is so major and so significant that was completely unexpected. Edward Marshall – Sidoti & Company: Fair enough, thanks guys.

Okay, Ed. Thank you.

Our next question comes from Richard Eastman from Robert W. Baird. Please go ahead. Richard Eastman – Robert W. Baird & Co: Yes, good morning. Bill, or Stacy, could you just provide maybe a little bit of color on international sales, I mean we hit on a few things but, it would seem to me in this quarter that down 8% in local currency would be a bit of a disappointment and I am just curious what may be surprise to you there and what does the second half trend line look like on the international side?

Well, we are actually down 9% on local currency terms just to reframe that a bit and really it was the timing of the realization of the orders for - the larger orders that are in the pipeline for the fixed gas and flame detection as well as the comparison to the prior year where we had really favorable timing shipments in fixed gas and flame detection as well as a large order that went into China for SCBA. And those just didn’t repeat this quarter and we tried to explain that our underlying business if you exclude those lumpier businesses or breathing apparatus and fixed gas and flame grew 2%. But that’s in the core products that grew 2%. But lot of those non-core products are down based upon the mining markets in Australia as well as continuing labor unrest in our important market of Africa. Richard Eastman – Robert W. Baird & Co: So, maybe the non-core is not a surprise, but the core product excluding FGNF and SCBA sales, plus 2%, again that seems to be maybe a loss of momentum sequentially. So, we should again expect better in the second half?

Yes, Rick, let me provide some commentary there. It is a little bit concerning to us that we lost what felt like some momentum in the international markets. I don’t think that there is – we don’t feel that there is any major issue that’s going on in that regard. We don’t believe we are losing market share, we just feel that there has been just - during the second quarter a general slowdown in some of those market areas. To answer your questions what do we expect for the second half, we don’t expect a hockey stick turnaround in improvement in those international emerging markets but we don’t expect it to get any worse either. There have been some exogenous factors on the international front. Stacy mentioned some of them. We all know that in Latin America and those of us doing business in Latin America, the World Cup was certainly a bit disruptive not just to our operations, but to the customers that we’re calling and selling the product to. So, we think we get that cleared up and we think that things return back to a maybe a low mid single-digit growth rate in those emerging markets. We don’t think we are off-track there. Richard Eastman – Robert W. Baird & Co: Okay, all right. And then Bill, you had commented, maybe specifically on a few product lines about backlog, but I am curious outside of the fixed gas and flame back well it sounds like that business still has pretty substantial backlog, Are there any other of the core products that you would flag from a backlog perspective? I guess the SCBA at least achieved one?

Yes, that’s right. Those would be the two major core product areas where we have significant backlog. The third area that I’d mention only because it’s so significant is the European ballistic helmets. We’ve been very successful in winning contracts both in Western Europe and in Eastern Europe for our ballistic helmets and some of the supporting products there and that’s fairly significant and it takes us out into the balance of this year and into 2015 as well. Richard Eastman – Robert W. Baird & Co: And on the fixed gas and flame, again, I am not trying to pin you down too much here, but, the way it looks to me year-to-date maybe that business is modestly negative year-over-year fixed gas and flame, but we have a big – a significant backlog, does that fixed gas and flame business end up for the full year kind of in a high single-digit growth number? I mean, just and that’s kind of what you target for your core products, that’s why I pick that number. But is the backlog big enough to support that type of growth for the full year in that product category?

Yes, I would not say that it’s high single-digits, Rick. I would probably put it more at moderate and low single-digit growth rates that the backlog and the shipping schedules that we have supporting that, probably takes it in, it’s positive for the year, but probably in the low single-digits, 4% to 5%. Richard Eastman – Robert W. Baird & Co: And then one quick questions on, Europe’s net income at 8%, a really nice number kind of responded where I guess with the volume and it sounds like absorbed some cost with the Swiss HQ. But, can I ask, was there anything funky at the tax rate line there or what your EBIT maybe in the low double-digits, call it 12% if I just normalize the tax rate?

Not realized any change in tax rate in the quarter, so that’s sort of apples-to-apples versus prior quarters. Richard Eastman – Robert W. Baird & Co: Okay, so we - okay. And then just lastly, Stacy on the cash flow and I think of free cash flow with all the dividend, but even if you take the dividend out of the cash flow, free cash flow assumption, how does free cash flow shake out for the year? Should we be a positive number here?

We should be a positive number of free cash flow, you mean compared to the prior year? Richard Eastman – Robert W. Baird & Co: Just should we generate free cash flow, again, you can leave the dividend out if you want to, but I put it in and again year-to-date, with the dividend payments or maybe $15 million negative and I understand you are building some inventory, your receivables are up 2% that might be distribution shift in Europe, but what does our free cash flow look like for the full year?

Yes, Rick, it’s Ken here. So, when you look at our trend line in the past several years and just look at the first six months of this year versus the first six months of last year, we are actually showing a little bit of improvement in terms of working capital management although we have been building a bit of working capital here as Bill alluded to. The second half has historically been a pretty solid half for us in terms of free cash flow generation. You are right to point out there is some work around inventory and things like that with some really big product launches but our history and our pattern has been pretty robust performance in the second half. So we would expect to see some improvements as we go into the second half of the year. Richard Eastman – Robert W. Baird & Co: Okay. All right. Okay, thanks so much.

Hey, Rick, I’ve got one slight piece of information on the Europe’s bottom-line. I just want to remind you there was a fairly favorable currency effect for Europe as the euro strengthened, so that certainly did impact the net income performance. Richard Eastman – Robert W. Baird & Co: Okay, I got you. All right so the translation at the net income line, okay.

Absolutely. Richard Eastman – Robert W. Baird & Co: Yes, great point. Thank you.

Our next question comes from Walter Liptak from Global Hunter. Please go ahead. Walter Liptak – Global Hunter: Hi, thanks. Good morning. I wanted to ask about Europe as well and on the helmet business to a military customer, it sounds as if that’s being – I wonder if you could just provide some more color, maybe on the size of those orders and how much more shifts – how much shipped this quarter? What do we have to go in the back half?

Well, let me provide some commentary on the product, well, this is Bill, and also on the competitiveness over there. We’ve got a very good relationship with customers. We’ve got a very established product in the Western European and Eastern European markets and we’ve been very, very successful for many years without ballistic helmets out of France. And so, we expect that to continue with, this is both police helmets and military style helmets that we manufacture and sell over there. So we expect that to continue. As far as the size of that backlog, I look to Stacy or Ken maybe on some detail there or Ron perhaps you can provide some input on the level of that backlog and how much of that moves into 2015. Ron?

Yes, Bill. Sorry, I am not – I am trying to pull that information up right now. But it is, as you are saying, it’s a sizable backlog. It will probably run through at least the middle of 2015 as it’s scheduled right now. On the order size of 25 million, does that sound about right?

Yes, that’s correct.

We don’t have that right here handy, Walt, but order of magnitude it’s about $25 million in revenue. Walter Liptak – Global Hunter: Okay, thanks for the color and then that helps. And then, saying in Europe, the FGFD business, it sounded like it’s – you are building backlog that there is some projects that they are pushing to the right and I wondered why and then you mentioned the timing in the back half. I wonder if we can get a little bit more color on that as well?

I mean, the FGFD business is always dependant on the end-use customer and the major projects that they have in developments, the engineering contracts and procurement providers. So some projects move to the right, Walt, but I wouldn’t say that in general that’s a trend that we are seeing, it’s just the timing of when those projects hit and when the deliveries are scheduled for. So, I don’t see – we don’t see a tremendous amount of the projects moving to the right being delayed tremendously. It’s just, again, it’s just a timing of those major projects and when they have scheduled delivery of our product to support those projects.

SGFT actually grew in the quarter over 8% and we are really encouraged by the strength of the Middle East market in particular. Walter Liptak – Global Hunter: Just in Europe, you are referring to?

Yes, that’s a European SGFT, yes. Walter Liptak – Global Hunter: Right, okay, got it. And then, this is just, I guess, I think is interesting. You mentioned that you built backlog that you wanted, I think you said a healthy backlog. How does that work – customers that have already tested and decided that they want to purchase a product, they place orders, you got your pricing down and then it goes in the backlog just waiting for the certification?

Well, a bit of that Walt. What we typically see happening is that, as I indicated in my call comments that we have developed a large number of samples that we have fully functional samples that we have sent out into the field. We are continuing to build on the momentum that we created at the FDIC show with those samples and holding awareness events and trial run events at fire departments across the country. And in many, many cases, those fire departments based on their utilization of that fully functional sample and use or placing orders through distributors as well as our distribution channel partners being quite excited by it and they are placing orders on MSA as well. So, it’s a combination of those and some of the really big fire departments they require a fully certified breathing apparatus before they would put them through a complete evaluation and so there is quite a number of those that were in the queue and we are awaiting for and that the fire departments are excited about trying the G1 SCBA. But we don’t have orders from some of those. But there is plenty of others where we have been able to win an evaluation so to speak based on the samples, the fully functional samples we’ve provided. Walter Liptak – Global Hunter: Okay, thanks. So the answer at your Analyst Day was that you might get a little bit of ordering in the fourth quarter and first quarter but it would be second quarter of 2015 where the market would really get going, but after these comments about the healthy backlog for SCBA, I am certain to think that maybe you’ve finally get some renewed sales in SCBA in the fourth quarter and then keep growing from there. You said, an okay way of characterizing it?

Well, I think that’s an okay way of characterizing it. I mean, we are pleased with where we are right now. We are pleased with the backlog, the book of business that we are building. We are displeased by the approval process that we are mired in. But, depending on when we get those approvals and the configurations of those approvals, we will see – we should see some improvement in the fourth quarter and I think momentum building from there in the first quarter and second quarter of next year just as we described to here. Walter Liptak – Global Hunter: Okay, thanks very much.

Our next question comes from Brian Rafn from Morgan Dempsey. Please go ahead. Brian Rafn – Morgan Dempsey Capital Management: Good morning everybody.

Hi, good morning.

Hi, Brian. Brian Rafn – Morgan Dempsey Capital Management: Bill, you talked a little bit about, what is the sense of before you started rolling out with the Q1 next year, what is the sense of the M7XT system in its durability of sales, once the G1 is launched?

Well, I think we talked about that in the Investor Day presentation. I think it’s a very, very good question. What we are finding is that the durability of that product in the market is actually quite good and quite strong. I was pleased by the sales performance of the M7XT during the second quarter and we continue to see customers who were M7 customers who have upgraded to or want to continue on that platform of product and go with the M7XT. So, I guess, it’s better than I expected. It’s my answer Brian. But once the G1 actually gets into the market and it’s available, I guess, that’s when we will determine how much of the M7XT business does the G1 then begin to queue into which is okay by us, because it’s really a revolutionary product and it provides some significant advantages for us and for our customers. So, but right now, I am pretty pleased with the M7XT and its sustainability, little bit better than I thought it would be by this time of the year. Brian Rafn – Morgan Dempsey Capital Management: Bill, your thoughts have now obviously they can change, but is the M7XT is still scheduled to be a dual product that runs parallel to the G1 or is at some point the G1 if it cannibalizes enough sales the M7XT would be canceled?

That could occur, but probably not for at least a couple of years, we’d run, I would imagine, we will run the M7XT through the next NFPA approval cycle process. So we probably have another three, four, five years on that product, again, depending on what that cannibalization rate is. But, we’ve got plenty of customers out there who are dependent on the M7 and the M7XT and our past practice has been to run that for at least one five year NFPA recertification cycle. Brian Rafn – Morgan Dempsey Capital Management: Okay, all right. Back to the G1 Bill, once it gets you going building that, is that G1 with that revolutionary new engineering design, is that a book and ship business or is there a lot of specific engineering customization and iterations that anyone individual fire department might be significantly different from somebody else who you are not building a lot of inventory?

Let me back track, it’s primarily a book and ship business. Now, having said that, there are configurations over time that we develop that required certification and approval and so and there are instances where a certain fire departments, especially large fire departments will like a little bit of customization on that SCBA and that requires us to book the business but then get the certifications through the agencies. So it flows things down a little bit. But that’s a minor part of the business, Brian. 90% of the SCBA business, once we have our certifications and approval, our foundational approvals, 90% of that is book and ship. Brian Rafn – Morgan Dempsey Capital Management: And Bill, what if – what might be your thoughts the book and ship, is that sales cycle and shipment and production, is that a period of months or half the year or how fast can that book and ship cycle be defined in, once you get you ongoing?

I’d put at a month or few months at the very most. Brian Rafn – Morgan Dempsey Capital Management: Okay, all right. Good, good. Well, tell me a little bit about, maybe refresh my memory. What for you is different with the ballistic helmet business in Europe be it, if this is a lot of between the armed force this is a lot of needle standardization between the US and overseas? Obviously we’ve talked certainly about weakening military budgets under the Obama ministry, what has kept you guys in the ballistic market in the Europe that’s different than America?

I think that’s a very good question. As you know, probably three years ago, I guess it was we began a process to divest ourselves of the ballistic helmet business and ballistic vest business here in North America and for a good reason, the profitability. And margins for that product were getting thinner and thinner and we had a customer that – I should say, wasn’t, didn’t fit the profile of a kind of customer that we wanted to have going forward and that sounds a little bit harsh, but the fact that the matter is, we had done a lot, we felt we had done a lot in the way of developing and putting a lot into R&D for that customer and not getting a lot out of that in the way of return on our investment. And so we decided that ballistic helmets and ballistic vests in North America is not where we wanted to put our resources and that we wanted to focus our resources in the core areas of the business. Having said all of that, the European market is quite different and while the helmets are quite similar, they do differ in some meaningful ways and we are able to generate very respectable margins on those products. We’ve got great relationships with those customers as we develop products for their specific needs and it was just a very different environment. It is just a very different environment over there than it is than we found it to be here. So, we backed away from the market here. We continued to excel and hold a dominant position in quite a few markets over there. Brian Rafn – Morgan Dempsey Capital Management: Okay, your centralization of your warehouse in Europe with the Europe 2.0, how big is that warehouse and as you consolidate warehouses over there are you going to be carrying any less inventory or is it about a push? It’s only for streamlining that?

We intend to be carrying less inventory. Brian Rafn – Morgan Dempsey Capital Management: And what is the size of that warehouse by chance to get a square footage on that?

I do not have one. I don’t have that off the top of my head, Brian. Brian Rafn – Morgan Dempsey Capital Management: Okay, thanks much guys.

Okay, thank you.

(Operator Instructions) And our next question comes from Stanley Elliot from Stifel Nicolaus. Please go ahead.

Good morning everyone. Thanks for taking my questions. A quick question on the European profitability. You guys mentioned the inflation, obviously the volumes helped out. The consolidation to any of the warehousing, did that help or is there a way to split out kind of between the volumes and some of the prior restructuring within that improvement at all?

Stacy, I look to you.

Elliot, we don’t have a meaningful split out of that at this moment to be able to share with you. Certainly, we didn’t see the operating margin improvements on a local currency basis that have a lot – probably more to do with mix. We decide to take another closer look at the inventory levels to get you a good answer there.

That’s fair, that’s fair. And some of the new products that we are talking about – you guys talked about in emerging markets, a lot of value type products for those kind of in country-specific, should we assume that those margins on new products on a go forward basis will be at least in line with the company average or maybe even a little bit better than that?

I think that’s a very good assumption to make.

And lastly, with the additional capacity on the credit side, any update on M&A activity, maybe kind of refresh us with the target size and some of the areas of focus.

Well, I think as we’ve said on previous occasions, our focus is in those core areas of the business that we’ve described many times in the past and in those growing emerging markets in order to access channels of distribution there. Size of the acquisitions as we said in the past, we completed in 2010 the acquisition of General Monitors. That was a $285 million acquisition. That was the largest in the company’s history to that point in time and we successfully acquired that company and integrated it well into the organization. So that’s in a comfortable range for us. Bolt-on acquisitions is what we are looking to do. We’ve got a very active pipeline of evaluations going on and so, core areas, emerging markets of the business in the range that you’ve seen us make in the past bolt-on, accretive, those are some of the principles that we look for as we make acquisitions.

Perfect, well, thanks again and best of luck.

Thank you.

Thanks.

And our last question comes from Richard Eastman from Robert W. Baird. Please go ahead. Richard Eastman – Robert W. Baird & Co: Sorry, thanks I was thinking back in the queue and save Ken a little time later. The gross profit margin, really given the commentary around the sales mix both geographic as well as by product line. The gross margin was just – that was a very good number at 45.9% and I am curious it sounds - maybe you got a little bit of help on the inventory build and absorption. But is there any other single factor in there that kind of drove that, the new products I suppose that would be sustainable? Is that’s the primary thing is your vitality index being up in the contribution from those products?

I’d say the order mix is also a fairly significant one. I mean, just the mix of products that we’re selling are more profitable, but having fewer large orders, where the large order usually has a price discount associated with it. Having fewer of those shipped in the quarter, certainly impacted the margin as well. It’s one of the other factors.

But it is – to your point, Rick, it is something that we’ve talked about with you in the past. It’s not just changing the mix to be more focused on core product areas. But it is pricing and the pricing initiatives we have. It is related to the new product developments process and that improving vitality number that we see for the new products that we are introducing having higher gross margins. It’s a number of those elements and the 50 basis point improvement that we saw in gross margins in the second quarter, I think continue to reflect that.

A good balanced mix of those items, yes.

And Stacy had pointed out in her comments across the core product area, we saw a nice expansion across, just about every one of those categories. So, continued to be a source of strength. Richard Eastman – Robert W. Baird & Co: Okay, great, great. And then just one last question, just trying to think of the pacing here with the challenges you have and the pacing on the quarters, but typically the third quarter is a bit and revenue is lower than the second and a lot of that has to do with Europe slower. But again the commentary around the G1, the SCBA market, even the backlog sound like they are little bit more weighted towards the fourth quarter. Again, I would presume that we will see that typical lower third quarter versus second quarter sales pattern that historically has been seasonal, but also seems to be supported by your product commentary. Is that a good starting spot?

Well, I think that’s fair. Yes, Rick. Richard Eastman – Robert W. Baird & Co: Okay, all right, well, thanks again. Nice profit quarter.

Thanks, Rick.

Thank you.

I will now turn the call back over to Ken Krause for closing comments.

Seeing that we have no more questions that concludes this morning’s call. If you missed the portion of the conference, an audio replay will be available on our website for the next 30 days as well a transcript of the call. On behalf of our entire team here, I want to thank you again for joining us and we look forward to talking with you again soon. Have a great day. Good bye.

Thank you, ladies and gentlemen. This concludes today’s conference. Thank you participating. You may now disconnect.