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Three analysts and top management from sixteen sector firms examine the industrial manufacturing sector in this special 83-page Industrial Manufacturing issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info522.htm

TWST: Greg, how are you approaching the group, and what do you include in your coverage?

Mr. Macosko: All analysts and portfolio managers within the small cap team at Lord, Abbett take responsibility for a number of sectors, and I cover basic materials, industrial and manufacturing sectors. We follow a strict screening process to uncover attractive companies using current valuation relative to their history. These initial factors include price to earnings, price to sales, price to book and price to cash flow. I agree with Wendy regarding the importance of cash flow, particularly en-terprise value to EBITDA. Industrial companies have been restructuring and may have taken on significant debt. Going forward, capital expenditures and operational cash needs should decline, and during the interviewing phase of company research, we want to understand how they will use this hopefully growing free cash flow. If they can pay down debt from more profitable operations, the enterprise value and stock price should rise, perhaps quite significantly. The new FAS rules affecting goodwill may change the quality of earnings and book value. This means we have to be careful when making historic comparisons. Wendy and I also agree about the importance of the management team and, most particularly, equity ownership and incentives. This aligns the interests of management and shareholders.

TWST: Greg, what are your favorite names in the group today?

Mr. Macosko: Wendy mentioned one of last year’s favorites, Sensormatic, a top-five holding which Tyco acquired. I’ve talked about REGAL-BELOIT (AMEX:RBC), and another company we like is Nordson (Nasdaq:NDSN), which, like REGAL, has grown through diversification. Nordson began in coatings and finishing, sold primarily to the auto industry. Today these products are only 18% of sales. They’ve diversified through their ability to dispense different types of materials very precisely on a variety of surfaces. They began with paint and varnish, then moved on to adhesives and sealants, which is 59% of sales. But they didn’t stop there and now supply systems that apply a broad range of fluids to printed circuit boards and wire bonding in semiconductors. This is 23% of sales but should increase sharply when the electronics market recovers. Technology sales will grow even faster because Nordson systems have been applied to the fast-growing flip chip. New management came in a few years ago, replacing managers that had been put in place by the founding Nord family. They’ve been changing the company to better reflect end-market demand and the situation looks very much to be at a turning point. A couple of recent acquisitions were in electronics and semiconductors, so that when the semiconductor cycle turns, earnings should easily hit 2 a share. They’ve been penalized over the past two years because more than 50% of revenue comes from international markets. In dollars, sales growth in seven of the last 11 years was negative. But in foreign currency, growth in all 11 of those years was positive. The most recent acquisition has less than 10% of sales in international markets. So there’s a real opportunity to sell additional systems to existing customers overseas. Even though visibility is low, Nordson recently noted that parts orders for adhesive systems have turned positive. Historically, this has always been an early indication of system orders. This is a unique example of actual orders that allow us to be quite optimistic about future demand. We think that Nordson can eventually earn 3 per share within three years and deserves a minimum 15 times that number.

This special issue includes:

1) Industrial Manufacturing - In an in-depth (10,700 words) Analyst Roundtable, Wendy D. Caplan, Managing Director at ABN AMRO, John G. Inch, Analyst at Bear, Stearns & Co., Inc. and Gregory M. Macosko, Senior Equity Analyst at Lord, Abbett & Co., examine the outlook for the sector including inventories, stock performance and share specific stock recommendations.

2) TWST confidential Off-The-Record survey of management performance of twelve sector firms asked market insiders about the ability of management teams to create shareholder value.

3) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.