Good day, ladies and gentlemen, and welcome to the year-end 2007 ICU Medical Incorporated Earnings Call. My name is Eric, and I'll be your coordinator for today. (Operator Instructions). I would now like to turn your presentation over to your host for today's call, Dr. George Lopez, President and CEO. Please proceed.

Good afternoon, everybody. Thank you for joining us today to review our ICU Medical's financial results for the fourth quarter and fiscal year ending December 31, 2007. I'm Dr. Lopez, Chairman and President of ICU Medical. With me today is Frank O'Brien, our CFO, and Scott Lamb, our Corporate Controller. I will start the call by highlighting our operating achievements during the fourth quarter. Then Frank will discuss in more detail our financial results for the fourth quarter and fiscal year 2007, as well as our revenue and range targets for fiscal 2008. I will wrap up the call with a discussion of current business trends, and then we will open the call for your questions. But before we start, I want to touch upon any forward-looking statements during this call. Please be aware that they are based on the best available information to management and assumptions that management believes are reasonable. Such statements are not intended to be representation of future results, but are subject to risk and uncertainty. Future results may differ materially from management's current expectations. We refer all of you to our SEC filings for more detailed information on the risks and uncertainties that have a direct bearing on our operating results and performance and financial conditions. With that said, let me begin. We are pleased with the overall performance we achieved during the fiscal year and the fourth quarter in as much as sales and earnings were in line with our expectation. 2007 was a year of investment and positioning us for growth in 2008 and beyond. Even though we faced challenges during the year in critical care, our other product offerings continued to do well in all channels and we are in a very strong position for continued revenue growth and earnings growth in…

Thanks, Doc. Before I begin, let me remind all of you that the sales numbers that we are covering as well as our financial statements will, as usual, be available on our website as I am speaking. As discussed on earlier calls, in the later half of 2006, we discontinued the production of two low margin product lines, Punctur-Guard and the product line under our Hospira Salt Lake City arrangement that we anticipated to discontinue when we bought the plant. The sales of these two discontinued lines totaled $2.2 million in the fourth quarter of 2006 and $14.6 million in the fiscal year of 2006. Today, we will be discussing sales on a pro forma basis excluding our discontinued lines to help you better understand our fourth quarter and annual results. We have not isolated margins on these product but they are negligible. The reconciliation of the actual GAAP numbers is available on our website along with the other sales numbers. As these products lines were discontinued in 2006, this is the last time we are going to be discussing sales on a pro forma basis. Our revenue in the fourth quarter of 2007 decreased 10% to $45.5 million, compared to pro forma revenue of $50.6 million in the fourth quarter a year ago. Net income for the quarter totaled $6.0 million, or $0.41 per diluted share, compared with net income of $6.9 million, or $0.44 per diluted share, in the fourth quarter of 2006. For the fiscal year of 2007 we achieved revenue of $188.1 million, compared to pro forma revenue of $187 million last year. Net income for the fiscal year of 2007 totaled $23.1 million or $1.51 per diluted share. The 2007 income includes a net $2 million, or $0.13 per share, the amount on a favorable…

Thanks Frank. Based on our strong business fundamentals, and our market strength, we are excited about our prospects for 2008 and beyond. Let me share with you a few of my thoughts about some developments going on at ICU Medical and in our industry, and how we believe our future performance will benefit from these trends. I will start with our existing product line. CLAVE has always had a lower hospital infection rate compared to other connectors. More attention has been focused on this issue and federal funding for Hospital-acquired infection is going away, so hospitals are more keenly aware of this issue. Our CLAVE and custom CLAVE products have proven to be the most efficient and safest device, perfectly designed for minimizing this problem. We have recently expanded CLAVE within the DA Hospital, and other hospital systems for this particular reason. As I already discussed earlier, in spite of disappointing sales of our critical care product, we remain optimistic of the future of this business. We believe our critical care products have a tremendous value proposition to help their professionals around the world. As we enter 2008, Hospira's decision to focus dedicated sales people on critical care and the introduction of new products for this market such as Latex-free balloon catheters should in our view produce the results we know this part of our portfolio is capable of achieving. We are enthusiastic about the future results that our manufacturing capabilities combined with Hospira sales team are capable of delivering. Now, let me update you briefly on our new product development. In 2007, we told you about the development of our new oncology products and now we are positioned to begin expanding our sales reach within these products. Now as a reminder, Genie our first Closed Vial Access Device and…

(Operator Instructions). First question comes from the line of Mitra Ramgopal with Sidoti. Please proceed.

Yes. Hi, good afternoon guys, just a few questions. Just getting back to the guidance, I think you are saying the revenue is $200 million excluding critical care?

No, including critical care.

Including critical care. Okay. And the gross margin, I think your goal is a 45%?

Yeah.

For the year.

And I thought at some point last year it would have been -- the goal in '07 was just to get to 45% and by '08 closer to 50%. Fairly in '07 we were closer to 40%. Any reason why we can't get more, quicker expansion on the margins, now that the move is completed and you are pretty much going to be rolling out the new products and getting more capacity?

You want to take that.

Yeah. Mitra, we’ve made a lot of progress there. I think one of the things that's happened though is our volume on critical care is down, and it's just tough to make that up. But we are continuing to make progress on the margins. And I think overtime, once we get the new products in there, we'll forget about the 45% because we will be way passed that.

All right. And it just seems like you are having a really significant bump up in SG&A.

Mitra that's all sales force. That’s an addition of at least 20 new salesmen that’s focusing on oncology for the launching of products at the end of this quarter.

Because I think last time I talked to you, you were looking at SG&A closer to 23%, 24% range and this does seem a little high here.

That'll be a little low for us, 23%.

Yeah, we’ve made a decision to significantly increase our sales and marketing support for the new product.

Completely focused with the new sales force.

Right, I was sort of expecting '08 in terms of the guidance. If you look back to what we did two years ago in '06, '08's guidance is still well below where you were two years ago. Is this like a conservative guidance or is this just a lot of headwind you are facing?

Well critical care certainly hasn’t helped. It was reasonable in '05; it was down in '06, down again in '07. Tough to make all that up.

Right, in fact I’m going back to '03 and you did $1.48. So the $1.50 in '08 five years later, seems we're not much along the road.

Back to your question on margins, margins determine the bottom line. We don't want to leave you with the impression; we don't think we'll get our margins up. We’ve always said in the past that to get them above in the classical range they were used to before the critical care acquisition in the 55, mid-50 range its going to take new products, and we're just launching the new products now. We’ve tested the product, we're comfortable with it, we're rolling out, we have our national sales meeting next week, and so they alter the size and then same thing goes for the hospital, and then followed by Hospira's sale force could stream this I believe on 1st of March. So, we’re expecting the contribution to the margins to be new products, but as all the new products will take a while to get established, they don't take off by the way, takes a little bit of time. That should be a kind of contributor to our margin expansion, as that number gets bigger and bigger. Remember it's a big market, Mitra.

All right, thanks. And there's also one quick question. Just looking at the tax rate again, I think in the fourth quarter, it looks like more a 25% rate. I don’t know what one should expect going forward for ’08?

For ’08, we are looking at approximately a 31% tax rate, which is in line with 2007 by the way for the year.

Okay, thanks.

(Operator Instructions). We are showing no more questions in queue at this time. I would like to turn the call over to the management for closing remarks.

Okay. Well, thank you very much for joining us on this call. We'll see you next quarter.

Thank you for your participation in today's conference. This concludes our presentation. You may how disconnect and have a good day.