Welcome to the Charles River third quarter 2009 earnings conference call. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for your questions and comments, instructions will be given at that time. (Operator Instructions). As a reminder, today’s conference is being recorded. At this time, I would now like to turn the conference over to your host, Corporate Vice President of Investor Relations, Ms. Susan Hardy.

Good morning and welcome to Charles River Laboratories' 2009 third quarter earnings conference call and webcast. This morning, Jim Foster, Chairman, President and Chief Executive Officer and Tom Ackerman, Executive Vice President and Chief Financial Officer will comment on our third quarter results and review guidance for 2009. Following the presentation, we will respond to questions. There is a slide presentation associated with today's remarks which is posted on the Investor Relations section of our website, at ir.criver.com. A taped replay of this call will be available beginning at noon today and can be accessed by calling 800-475-6701. The international access number is 320-365-3844. The access code in either case is 117470. The replay will be available through November 18th, you may also access an archived version of the webcast on our Investor Relations website. I would like to remind you of our Safe Harbor. Any remarks that we may make about future expectations, plans and prospects for the company constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by any forward-looking statements as a result of various important factors including but not limited to those discussed in our annual report on Form 10-K which was filed on February 23, 2009, as well as other filings we make with the Securities and Exchange Commission. During this call, we will be primarily discussing non-GAAP financial measures. We believe that these non-GAAP financial measures help investors to gain a meaningful understanding of our core operating results and future prospects consistent with the manner in which management measures and forecasts the company's performance. The non-GAAP financial measures are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations to those GAAP measures on the Investor Relations section of our website through the financial reconciliations link. Now, I will turn the call over to Jim Foster.

Good morning, I’ll begin by reviewing the third quarter results which we reported last night. Sales for the period were $297.5 million, at decline of 13.1% over the third quarter of ’08. Foreign exchange accounted for 1.8% of the decline. Excluding the effect of foreign exchange, the constant dollar sales decline was 11.3% with the RMS segment reporting flat sales year over year and the PCS segment declining 21.4%. Operating income was $57.9 million and the operating margin was 19.5% compared to $77.6 million and 22.7% reported in the third quarter of ’08. The operating margin declined just 40 basis points from 19.9% reported in the second quarter of ’09 as the benefit of the cost savings actions partially offset the impact of lower capacity utilization in the PCS segment. Earnings per diluted share was $0.65 in the third quarter of ’09 compared to $0.76 in the third quarter of last year and $0.66 per share in the second quarter of this year. Finally, we have reduced our ’09 guidance to reflect sales of 10% to 11% below last year with EPS in the range between 228 and 232 for 2009. As we get closer to year end, clients are becoming are even more hesitant to commit to studies, apparently preferring to wait for the new budget year. Therefore, we believe that fourth quarter will be softer than we originally expected. Our results for the quarter and our expectations for the year reflect the continuing soft market demand for the company’s broad portfolio of essential drug development products and services due to pharmaceutical and biotechnology clients delaying spending on therapy in development. As we have previously noted, pharmaceutical companies are facing significant challenges as they reinvigorate the development pipelines and create more efficient infrastructures. We believe these challenges are being…

Good morning. I will speak primarily of non-GAAP results which exclude acquisition related amortization, non-cash interest expense related to the new convertible debt accounting rules, and charge related to cost savings actions and other items. Overall, third quarter sales and operating income declined 3.5% and 5.5% sequentially driven primarily by the PCS segment as a result of continuing soft market demand and the impact of lower pricing working its way through the backlog. The impact on operating income was partially offset by lower unallocated corporate costs and cost savings actions. Third quarter EPS of $0.65 was favorable to our prior expectations due primarily to a lower effective tax rate. Unallocated corporate cost declined both year-over-year and sequentially primarily driven by further reductions in expected 2009 incentive compensation levels. We noted on our second quarter call that we had lower than targeted sales levels for bonuses and have subsequently decided to terminate the majority of our incentive compensation programs for this year. Lower healthcare and fringe related costs also contributed to the substantial decline in unallocated corporate costs versus the second quarter as these costs have historically been lower during the second half of the year. Looking ahead to the fourth quarter, we expected unallocated corporate costs to increase sequentially because we do not expect a similar benefit from the incentive compensation reversals. We will also incur incremental ERP cost ahead of the planned roll-out. We currently expect unallocated corporate cost to total slightly below 5% of sales for the year, consistent with our previous guidance. The ERP project continues to progress well and on schedule. We are on track to roll out the system at our US locations at the end of December which is the beginning of our 2010 fiscal year. We completed integration testing in September, finalized the…

That concludes our comments. Operator, would you please take questions now.

(Operator Instructions). Our first question comes from the line of Alexander Draper - Raymond James.

Just a couple of quick questions. Did you say Tom, on the RMS commentary, is that comparable to the third quarter in terms of being stable or year-over-year?

Third quarter to fourth quarter.

Okay, so you don’t expect the normal seasonal decline that you’ve seen historically?

In some aspects of the business such as the models we would expect some decline for seasonality, but as I noted we expect an uptick in our large animal models and an uptick in some of our services so that on a total sales basis, yes, we expect it to be stable versus the third quarter, but because of the profitability of the small models, we expect a decline in margin.

The second question and I’ll jump out; I know you’re not making any specific commentary on 2010, but I wanted to think of in terms of the longer-term add-backs, we’ve had a lot of different adjustments; severance, one, can you outline what basic areas I should be thinking about taking costs out in terms of the severance and the restructuring and where that’s going to go longer term, and then also, what are the ongoing add-backs in each of the divisions as I should be thinking about longer-term add-backs and how you think about a pro forma margin versus a lot of the severance and impairments that have made the numbers move around a lot this year.

While of course a lot of the severance actions were excluded from our non-GAAP results; so if you look at our non-GAAP results this year and our margins, they are on a non-GAAP basis untainted by those actions. In my last remarks I mentioned that the cost savings actions contributed about $40 million this year and would contribute about $50 million next year. The reason why the numbers are not a little bit higher next year is because some of the actions that were taken are not necessarily recurring such as some of the incentive action. So, it’s a little difficult to answer your question in terms of margins directionally because as the demand has softened, some of the actions have been actually mitigated by further demand weakness. So, I think as demand returns, that’s really where we would see the benefit of some of those actions, and of course if demand returns more slowly or it takes a little bit longer, then the actions while they’re beneficial, continue to be diminished by the impact of the demand. So, I hope that clarifies it a little bit. Obviously, a lot of it is dependent on demand return and how fast that rebounds.

Your next question comes from the line of Robert Jones - Goldman Sachs.

You mentioned clients becoming more hesitant to admit to studies as we near year end; just a couple on this; are these clients involved in ongoing M&A or is this across the board, and then if you could help us understand what exactly needs to change in early 2010 to give these clients greater confidence in initiating these studies.

It’s definitely across the board. We’re seeing a slowdown internationally, but large pharma clients, not necessarily focused on the clients that are involved and engaged in major mergers; some of the hesitancy has to be with the fact that clients can wait until the last minute to make commitments in the pre-clinical space because of so much capacity available and want to shop for better prices. Some is the desire to wait until the major mergers are finalized and they can see what the structures of those companies are like so that they can compete with them more effectively. We’re definitely seeing a ‘let’s wait till the next fiscal year’ commentary building with some clients; we’ve seen some studies that we thought would be booked in the fourth quarter be booked in the first, and we’ve seen some slippage, normal slippage, we’ve seen some slippage from the fourth quarter to the first as well; so you have a combination of factors, a lot of that is impacted by the insurgency that surrounded the whole healthcare industry, and as we indicated in our remarks, several of those factors have ameliorated; the mergers are over or almost over and the integrations are about to start; biotech funding has improved. They are certainly in the process of doing the 2010 budget, so clearly some things will wait. Health care reforms seem to have at least a broad-brush structure put around it. Actually, most importantly for us, what our sense is relative to next year, is continuing clients, continuing conversations with clients at the most senior levels who are not only optimistic, but are much more focused on strategic outsourcing and much less focused on having to control everything internally. The issue remains to be when that will initiate, and of course, when it does initiate it’s going to be somewhat impacted by the price reduction that has taken place over the last at least two, maybe three years, but certainly the last year with great intensity. So, the build will be slower than originally anticipated, but we still believe we will see it build around the second quarter.

Our next question comes from the line of John Kreger - William Blair & Co. John Kreger - William Blair & Co.: Jim, can you just talk a bit more about the demand dynamics you’re seeing within PCS and how that’s changed over the last year; I know back in the spring we were hearing lots of anecdotes that demand levels and pricing had stabilized although it would seem perhaps that your guidance would suggest maybe that’s not the case here on the fourth quarter. From your perspective, are we still in the stable demand environment or do you think we’re seeing further deterioration. And then a related question to that, this roll-off of 2008 pricing into 2009 pricing, is that dynamic done or are we going to continue to feel the effect of that for the next quarter or two?

What we would say on that is that demand is continuing; we’re seeing very good inquiry levels, and we’re actually seeing that we’re winning historically consistent number of bids or number of proposals that we’re bidding upon. There continues to be enormous amounts of pressure on pricing and that is very much tied to the capacity; this continued downward pressure, and so we don’t think it will be continuing to be available, we don’t think that this pricing is off nor do we think the demand is off, but there is some inherent downward pricing pressure so that we don’t seem to be cut. We’re seeing ’09 pricing now playing through the revenue base. Certainly the price decline has played through the backlog, and as we see long-term studies that were priced at ’08 levels come off line and be completed and new ones initiate, it brings down the whole pricing platform as it was. It gives us a false sense of what demand is actually like. We actually think demand is pretty good, we also think that directionally demand will be lot stronger given what we’re hearing from our clients; the value of that demand, and how that compares to the prior year, definitely going to be impacted by pricing, so yes, I think we’re going to see certainly another quarter of this, at least we certainly have that playing through our guidance. We’re warning for reduced revenues and margins associated with that revenue as the current prices really become the preponderance of what we do. We’re seeing a disproportionate amount of short-term studies because of the hesitancy to commit. On the positive side I would say that specialty work is holding up relatively well and we have a large footprint in specialty work and that continues although I think clients wait until as long as they can to buy more expensive studies.

Your next question comes from the line of Douglas Tsao - Barclays Capital.

Just following up a little bit on that line of questions; Jim, I was just hoping you could perhaps provide a little color in terms of how your current study mix compares to what you’ve seen historically. I understand that given your comment about I&D enabling study picking up as well as your mix in terms of long-term studies that we typically see associated with clinical development, but running parallel to clinical development.

As I was saying previously, we don’t have an adverse study mix in terms of specialty versus general toxicology. We continue to be the market leader in specialty work and it is continuing proportionately to be strong. We have seen disproportionate amounts of short-term studies, so we have a lot of turnover. The value of those studies tends to be not as high, and so, we don’t have this commitment to longer-term studies running in parallel to the pre-clinical work, and some of the very expensive studies which they often don’t initiate until the late phase II and sometimes phase III studies, they are waiting as long as possible to commit to those two. So, we have an elongated decision making process. We’ve used the term hesitancy to commit, there’s really no better way to say that, we have robust activity, lot of request for proposals, we get back to them immediately with those proposals, we win a significant portion of those and then we wait for contractual commitments and they’re not coming. I am not sure what the difference is in the ultimate effect; last year we had the studies booking immediately, but then slipping from quarter to quarter to quarter to quarter and never really starting; these days they’re just not committing at all. So, you probably have a similar effect although this year it’s exacerbated by the pricing. So, we would expect coming out of the first quarter with budgets done, the mergers done, biotech funding improved; all of the things that we said in our prepared remarks, but most importantly the necessity to start to get drugs through the pipeline. We would expect studies to he initiated. We would expect longer-term studies to be initiated as well. I suppose the mix between specialty and general not…

If we exclude the closure of the Arkansas facility, what’s the net decline and PCS headcount? You cited 18%, if you take out Arkansas, what’s the number?

I’m not sure I understand the question.

If we exclude the impact of the Arkansas facility closure, for the other Charles River sites, what’s the reduction in headcount then?

I don’t remember the exact number Doug, but Arkansas headcount was 100 plus, and of course some of those people have actually while winding down, we haven’t completely reduced all the headcount at Arkansas, so hopefully that helps, and we can probably get you some more specifics later.

The next question comes from the line of David Windley - Jefferies & Co. David Windley - Jefferies & Co.: Jim, we’re talking about the margin impact of the lower pricing in 2009 being felt in the third quarter here more fully anyway. Just thinking about how the cycles back up, so if we assume that the Q2 of 2010 is the right timeframe for demand to start to loosen up and flow a little bit better and commitments being honored more closely to start date and things like that, would it then also be appropriate to expect that ’09 pricing would take a couple of quarters, a quarter and a half, or something beyond that increase in demand to fully flow out of the backlog? In other words, you get into fairly late 2010 before you get the 2009 pricing flushed out, and as a tangent to that I suppose if you just got volume improvement and you didn’t see a meaningful improvement in price, what kind of margin could PCS re-achieve and return back to just on a volume improvement?

It’s certainly not an easy question to answer, but we’ll try to give you whatever information we can give you that’s helpful. Obviously the longer term studies have more of a tailwind for sure, so I think you’re question about how does it play for the backlog, it takes a little bit more time to unwind and it has impacted us probably more progressively through this period in terms of feeding into the actual revenue and therefore impacting the margin. As Jim said earlier, I believe we have seen more shorter term activity, so there’s a little bit of a different dynamic there. That activity has tended to placed more closely to the time that the customers wanted to get the study done and obviously because of the shorter term nature of it tends to flow through the P&L more quickly, and then to the extent that there was a change in that activity in terms of pricing, it would flow back into the P&L more positively and our shorter term duration. Beyond those comments, I’m not sure what else I could say about it.

David, I think we would assume as I said earlier that probably the second or third quarter of next year, we should be anniversarying the full impact of the price, and we don’t feel it’s going to get any worse. This is a very capacity sensitive business and we would expect as capacity fills even without pricing improvement but without any pricing decline that we would be able to improve our margins somewhat, so I think that as we move through the second quarter and into the back half of the year, those dynamics should play out. It’s hard to imagine a repeat of factors occurring again next year. As we said, we’re not seeing a continuing pricing decline even now. We have just seen the impact of what we saw earlier, so that should wash itself out, and directionally we should see some improvement. When we can ultimately get those margins, it’s really too early to say.

The next question comes from the line of Greg Bolan - Wells Fargo.

Jim, as we think about the large PCS headcount reductions year to date and then contemplate a potential rebound in demand for tox services, how do you feel about the company’s ability to execute on project timeliness and quality?

Obviously, we have been very careful about how and where we have reduced our headcount. It’s obviously always a painful and difficult thing to do because our workforce is most valuable resource. In fact, we took headcount out at multiple places, not that there was any huge concentration in any particular location. We strive to retain virtually all, not all, but virtually all of our senior scientific staff and study directors, I would say in situations where we had some inductions in some of our senior staff, it was conscious to get the deficiency benefit of shared services, so we were aggregating activities that were done in multiple places into one or two places. We had staffed up for an anticipated increase in activity in the back half of this year which has not happened, so we simply found ourselves with certainly too much space, but significantly too much headcount in connection with both the current as well as the anticipated demand, and we feel that we’re staffed now to respond to the current demand and even some slight increase as we move into the second quarter. We obviously will have to staff up principally talking into direct labor level. We’ll have to staff up as we get advanced solid indication of the demand coming back, so it’s a very careful equilibrium that we have to achieve in order to be responsible in terms of how we manage our costs but also have the right scientific infrastructure in place. I think we’re still known for our scientific strength and capability, and it’s important for us to continue to retain that sort of prominence.

The next question comes from the line of Todd Van Fleet - First Analysis.

Lots have been said here, and I am just trying to reconcile in my own mind what the outlook for the fourth quarter looks like with respect to the margin in the PCS business segment. Let’s say we model it out. Pick a number, for a sequential decline in revenue in PCS, call it $7-8 million or what have you. We’re still looking at probably maybe a 500 basis point or more contraction in the margin for that business segment to come down to a non-GAAP EPS range that’s implied in your annual guidance, so you talked a lot about volume, you talked a lot about price, you talked about some of the investments that are being made. I have a two-pronged question. One is that kind of margin decline in Q4 in the ballpark in terms of that 500 plus basis points type of movement, and then what are the primary contributors to that movement? Is it volume, is it price, is it some of the investments in ERP? Can you help us calibrate our thinking a little bit better in that regard?

I’m not sure that I could answer the question as thoroughly as you would like, but we’ll attempt to do that as best we can. Clearly, we indicated that the sales volume would be down, and to your question, without indicating specifically how much it would be down, margin would be down. Pricing is having an impact; there is no question about that, so volumes may not be down as much for instance as revenue because of the impact of pricing. Volumes are also down to some extent, and as Jim alluded to before, the mix has changed somewhat to the point that that is also affecting the profitability since different components or types of studies have different margin levels. So we’re obviously putting out indications as best as we think we can and as much as we think would be accurate, and beyond that I am not sure that I can add a lot more to help you understand probably as thoroughly as you’d like.

Tom, if you had to rank them then, it sounds like pricing is number one, volume might be number two, and I thought I heard Jim say that mix really wasn’t a significant issue, but is that number three then?

I would say so. I don’t want to give you the impression that it’s a perfect science in terms of calling one, two, three, because of the vast myriad of customers we have and actually trying to capture the price impact and things like that. It’s not as perfect as we’d like it to be and therefore our answers aren’t as crystal clear as probably you’d like them to be, so as best we can see it, I would say that that’s a pretty good prioritization. One other thing is that the foreign exchange has moved around a bit. In addition to that, the Canadian dollar has continued to strengthen, and as we’ve said in the past, that creates a drag on margin. Because of the movement in other currencies which have continued to move in parallel versus the dollar, that tends to give us a little bit of a benefit on sales, but the actual Canadian dollar movement tends to be a drag on margin, and that’s probably something that we didn’t point out that maybe would be beneficial to that conversation as well.

Your next question comes from the line of Isaac Ro - Leerink Swann.

I am thinking about the number of long-term contracts within pharma that might be available over the next few months for bidding, as you mentioned, as these mergers close. I’m just wondering if it’s fair to say that you’re not really seeing any handful or single competitor out there that might be trying to take a more aggressive approach to pricing that want these businesses for the long run, and as a followup to that, I think you mentioned the general slack capacity out there in the industry. Do you have a rough percentage improvement or relative improvement to the capacity utilization that you think you need to see before the pricing environment stabilizes from that side of things?

We haven’t specific color on really what the capacity underutilization is either for us or for our competition. Suffice it to say, the capacity utilization has to improve significantly in order to see some improvement in pricing. I would say certainly it will take all of next year to see any sort of dramatic improvement. We don’t have really any indications that our competitors are likely to do anything more dramatic from a price reduction point of view in order to secure business. We have anecdotal information that some of the price points at which some of our competitors are quoting work is below the level at which they’re able to provide good quality work, so clients seem to be okay with that. So I think what we’re going to see besides probably some asset transfer opportunities, whether we or anyone else actually want to close that sort of business, we’ll see what the terms are, but I just think those deals will be on the table. I think the most significant thing is there is a fair amount of preclinical work that has never been outsourced by several of the major drug companies, most of whom we are speaking to and are indicating that they will outsource it. The issue is how fast do these entities move from the time they make that decision to actually placing the work externally and with whom, and that’s a bit of an imponderable, but certainly we would think that well into next year that ought to be happening, and I think that that will be the last one on price because I think the price points are okay now for the clients, and I think more run on corporate relationships on the size and scale of the portfolio that you have with which to support them and what the long-term capabilities for us to support them in multiple geographic locales for instance. So those conversations are well underway, and as I said, it depends a lot on what the time frame is for the companies to make a decision and actually let the work out.

Your next question comes from the line of Eric Coldwell - Robert W. Baird.

We’ve had a lot of general discussion about early development in the toxicology market, but Charles River actually has a pretty broad suite of offerings with BPS, biopharmaceutical services, bioanalytical, clinical pharmacology, pathology, a number of fairly large businesses. I am curious whether you could rank how those various sub-units are doing relative to your expectations in this environment by demand and profitability.

That would be a substantial chore here. I would say that as a general proposition demand for most of those activities is less substantial than we would have liked to have seen it. I think a lot of it moves in tandem, certainly bioanalytical chemistry moves somewhat in tandem with tox, so does pathology for sure. Biopharmaceutical testing services runs a little bit countering that, pretty much depending on the strength of the large molecule companies or the biotech companies, so you can infer the state of that business. I think that the whole preclinical outsourcing demand curve moves pretty much in tandem, at least the way we’re structured. We have various parts and pieces that are scaled to support one another and so we’re likely to see the whole sector sort of invigorate slowly, but I think in tandem rather as disparate pieces leading or not. Since we don’t break down the margin by sector within a segment, I am reluctant to do that now.

What I’m trying to get to is we get a lot of these general questions on what is pricing, how much is pricing down, and my assumption has always been that certain of your services would be facing less pricing pressure than others structurally just based on the nature of the work, in that we might massive price concessions on a D&B case study but maybe not quite study on a 6-month inhalation study, etc., and I’m just trying to get a sense of the range of where pricing is and whether certain of your subunits are maybe not seeing as much of a pressure drain as perhaps some of the general toxicology short term work.

That specific example is a very good one, and so we definitely don’t see this sort of pricing pressure with our specialty tox and things like inhalation versus general toxicology for sure. It tends to hold up more and the competitive scenario is dramatically different. So yes, that’s certainly true, but in some of the sub areas, like pathology testing and some of the biosafety testing, the same general pressure tends to prevail. We are seeing a fair amount of tenacity on the part of our clients to exact the best pricing at the latest possible time, and of course the specialty work we tend to have unique capabilities and unique scale, and we hope that that will always be the case, so yes, that does give us some pricing power in those areas.

If you’d allow me one followup, we didn’t spend a lot of time on this call talking about the facility-specific performance, what’s going on in Shrewsbury or Reno or China, Sherbrooke, etc. Are there any big takeaways from that or is the real takeaway that similar to your comment on your subunit businesses that demand is pretty much down across the board and walking fairly in tandem?

What we said on our last call and maybe the call before is that in regard to our legacy sections we’re working very hard to scale our entire portfolio. We’re going to stop giving color on specific sites. Suffice it to say that capacity is well underutilized, with a couple of exceptions, pretty much across the board. We did say that we would continue to give color at least for the balance of this year on the two sites we brought online this year, which were China and our second site in Montreal which is called Sherbrooke. I guess all I would say is that they’re filling up much as anticipated given that they got a late start. It’s still a drag to the margin. We anticipate that they’ll become breakeven and profitable in the not too distant future and they should cease to be a drag sometime in 2010.

Your next question comes from the line of Tycho Peterson - J.P. Morgan.

I have a question on the ERP system. Maybe if you can talk about where you think you may see some of the biggest benefits from that next year. I’m just wondering if there’s an opportunity to get more granular pricing. You’ve obviously talked a lot of end-market dynamics here, but does that provide you an opportunity longer term to extract better pricing and maybe manage projects a little bit more granularly?

It does Tycho. I guess I want to be careful not to overstate the initial benefits because it will take a little while for people to get used to the information and for us to sort of refine the information, and by the way the rollout in January is for US only. We actually won’t include some of our foreign sites until mid-year, so we’ll have more visibility into certain data, but only for the US footprint which does include RMS and RPCS site. Unfortunately I think in this particular market environment, a lot of our benefits would be on things like capacity utilization and efficiencies like that, and so obviously from a capacity utilization standpoint, that’s not going to be a benefit it’s going to materialize more rapidly because we’re underutilized now and it’s really going to take our ability to start filling up some of our space before we can actually start to get greater efficiencies from a utilization standpoint. Unfortunately, I think the benefits are going to come more slowly and in conjunction with both system familiarity and market demand, I think we’ll probably see less benefits in 2010 than we had hoped for when we initially undertook this project.

On pricing, you obviously gave a lot of color on PCS. Can you talk a little bit about your view on RMS going forward? You talked about some of the pricing traction you’ve had. Is your view that that continues to hold around the 3% to 4% range, or how should we think about that going forward?

We’re not going to give specific color yet on what the magnitude of the price increase would be except to say that we anticipate that we’ll be able to have a price increase next year on RMS as we’ve always have given our strong competitive position and the quality of our products and the importance of them to our clients.

Jim, in a couple of your comments you mentioned embracing asset transfer at least by the industry. Can you comment on how that stacks up in your priorities? Are you actively looking at some of these facilities coming out of pharma, or how should we think about you handicapping that versus M&A or other priorities?

In terms of the asset transfers, it’s not something that we’re necessarily looking to do. We’re willing to look at those opportunities as our clients present them to us, and they will and have been presenting them to us. They have to really work for us in order for us to take on particularly given the capacity situation right now. There has to be a substantial book of business for a long period of time, and it would have to be in a geographic locale that we currently are not in, and it would have to be very favorable. Having said that, we don’t want to anticipate what the deals will like without seeing them. I think they’ll all be different. Some of the facilities will be too large and too old and too nonproductive for us and others may make some sense. So we’ll rank order it to the extent that if it’s important to our clients, it’s something that we’re willing to talk to them about. I don’t think it’s mutually exclusive with other things that we’re able to do. We continue to look at M&A to fill in our pipeline, but the best scenario for us from an asset transfer point of view is for our clients to either use those assets or something else for us to close them, and for them to use the existing capacity in the system, either from Charles River or others. Actually, that would be the best results for the clients as well because we’re likely to be able to do the work more efficiently and probably at a lower cost for them if they outsource it to our facilities, but that may not be the way they see it.

Your next question comes from the line of Ross Muken - Deutsche Bank.

In terms of the models business, if we rewind to the last time we had a series of pharma M&A mergers, whether it was Sanofi-Aventis or Pfizer-Warner Lambert or Pfizer-Pharmacia, what was the reaction in that business both on announcement and then during the quarter of closure? Was the disruption felt more in the initial phases when they were doing the integration planning or was it when actually we saw the facility rationalizations and some of the headcount and there was possibly a freeze at some point post the close?

Historical ones are not necessarily indicative of what we’re seeing now or what we will see, but I will see that question anyway and then tell you what we actually think is going to happen. Typically, we see some disruption during the post-announcement and pre-close depending on how much overlap there is from a therapeutic area point of view, and we tended in the old days post-merger to have research model businesses pretty constant. Since we have a majority share with most of the clients, one company acquiring another for instance doesn’t typically benefit us. What’s going on right now is that in one of the big mergers where this is occurring, and I won’t tell you whether it’s the one that’s closed or not, we’ve seen a substantial reduction in purchases pretty much in the beginning of the year, so potentially we won’t see a huge dramatic change in the upcoming months. To the extent that we do have an overall reduction in purchases from the four companies that became two, and that’s possible, we think that it’s likely to be offset by increase in our progress sales and toxicology business begins to come back, so it’s likely that that will get washed out in the next.

Is it possible, Jim, as well that some of the stimulus related sales helped to kind of cushion that as well as that sort of flows through in the same timeframe?

It could. We’re actually a lit bit surprised that we’re not seeing stimulus sales flow through now, so yes, definitely we could begin to see that by around the first quarter.

Do you have any closing comments?

Thank you for joining us this morning, and this concludes the conference call.