Good morning everyone and welcome to the IDEXX Laboratories Third Quarter 2011 Earnings Conference Call. Just a reminder, today’s conference is being recorded. Participating in the call this morning are Jon Ayers, Chief Executive Officer; Merilee Raines, Chief Financial Officer; and Pete Levine, Director, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that statements that members of IDEXX management may make on this call regarding management’s future expectations and plans and IDEXX’s future prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as expect, may, anticipate, intend, would, will, plans, believe, estimate, should and similar words and expressions. Such statements include, but are not limited to statements regarding management’s expectations for financial results for future periods. Listeners are reminded that actual results could differ materially from management’s expectations. Factors that could cause or contribute to such differences are described in IDEXX’s quarterly report on Form 10-Q for the quarter ended June 30, 2011 and annual report on Form 10-K for the year ended December 31, 2010 in the section captioned Risk Factors, which are on file with the SEC and also available on IDEXX’s website, idexx.com. In addition, any forward-looking statements represent IDEXX’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. The company disclaims any obligation to update or revise any forward-looking statements in the future even if its estimates or expectations change. Also during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A definition of these non-GAAP financial measures is provided in our earnings release, which can be found on our website idexx.com. Finally, we plan to end today’s call by 10 AM Eastern and in order to allow broad participation in the Q&A, we ask that each participant limit his or her questions to one with one follow-up as necessary. We do appreciate you may have additional questions, so please feel free to get back into the queue and if time permits we will be more than happy to take your additional questions. I would now like to turn the conference over to Merilee Raines. Please go ahead.

Good morning and thanks for joining our call today. The quarter's financial performance overall was largely in line with our expectations at the time of our second quarter call in July. Our third quarter revenues of $301 million grew organically 8% after adjusting for a 4% favorable impact from currency. The mix of revenues was somewhat different from our thinking back in July with relatively stronger performance in out VetLab instrument placements offsetting a somewhat lighter performance in our Digital Radiography and Practice Management product line. Diluted earnings per share of $0.66 were slightly above our expectation due largely to the receipt of the final balance owed to us of just over $1 million for inventory sold when we divested certain pharmaceutical product lines at the end of 2008. this payment which contributed $0.01 to earnings was recorded as a reduction to G&A expense. Beyond this payment, lower operating expenses offset a slightly lower gross margin primarily a function of revenue mix. Our organic revenue growth performance continued to get little to no benefit from the macroeconomic environment. Our internal gauge for the vitality of the US companion animal health market practice managed practice metrics from a consistent subset of veterinary clinics who use our Cornerstone Practice Management System showed that in aggregate patient visits were flat year to year in the third quarter and practice revenue growth was about 3%. This is ever so slight an improvement from what they have observed in the previous two quarters when patient business were down 0.5% and practice revenue growth was about 2%. In our view, this indicates a market that continues to stabilize and reaffirms our belief that improving trends will be very gradual. Though Europe has its own set of fiscal and monetary issues, our companion animal business in that…

Thanks Merilee. We see nice momentum in our business both in terms of our products and services on the market and our new product pipeline. The strategy of our Companion Animal Group, which as investors know contributes 82% of the company's revenue, is coming into sharper focus this quarter. Our customers, veterinary practices, can achieve growth in the current economy if they work to build their relevance and bond with their clients, pet owners. We see this clearly in the practice growth there. First, our veterinary customers that use our Cornerstone practice management software, usually combined with some or all the elements on a diagnostics products and services, are growing the revenues from 2% to as much as 4% faster than other practices in the US. Second, the practice-by-practice variation is wide. 27% of our sample set, this is of 400 plus Cornerstone practices, are growing at 5% or more year-to-date, and 12% of the samples are growing 10% or more. This is not generally explained by geography. Instead, it appears to be a function of the effectiveness of the local practice in generating growth in the intensity of care provided per pet served. Our IDEXX products and services are designed to support practice growth and efficiency. One element of driving practice growth is the adoption of IDEXX tools that allows the practice to communicate to the pet owner the value of the medicine practice. Somewhat unique to veterinary medicine, the pet on our page cash for their pet healthcare services and thus makes some economic decision in the level of that care. When the practice effectively communicates the value, the pet owner generally responds in accordance with the strengths of bond with their pets, which is generally quiet strong. And this world, in this new world of consumerism, this…

Thank you. (Operator Instructions) And our first question will come from the line of Ryan Daniels with William Blair. Please go ahead.

Yeah, good morning everyone, and thanks for taking my question. Jon, I want to go back to some of the commentary you provided on the strength in the instrument placements and some of the normal marketing initiatives that appear very effective. So is it fair to say that the marketing pitch today is if you got an upgrade equipment and do enough testing that you’re rebase will effectively offset the lease cost. So the practice will generate more practice level sales and margins but in effect pay for the new equipment?

Yeah, and the one addition I would add is when you said we’re going test I would say expand the profiles that they’re running. So obviously you see a bigger, you would see an increase in utilization per pet if you will and per pet sample. And then you would earn enough rebates to maybe for the new cost, monthly cost that you would incur associated with leasing the instrument and maintenance cost.

Okay, very helpful. And then I guess my, I got a follow-up, I just want to talk a little bit more about some of the R&D investments, you obviously had some good announcements in the Cornerstone and in digital radiography with the Cloud and Mobile Solutions. And I’m curious if you’ve begun to invest in any clinical decision support tools that might help that more effectively practice real time care protocols or perhaps ID high risk patients for more diagnostic work et cetera is kind of the next level of driving more intensity of services, if you will?

Yes. I’d say the -- we aren’t generally investing in that area and that the digital application I think is the first of a whole area. I would say where we see the real value is not just medical decision support but communication support in that conversation. Because medicine that can be practiced but that can’t be communicated to the pet owner and where the pet owner therefore doesn’t appreciate it and doesn’t do it, then isn’t medicine as practice. So, it’s all up to the pet owners to decide yeah I want to do this and I think what pets are appreciating is that they’re, in some ways they’re under attacked. They are under attacked by the Internet in all sorts of different ways, Internet pharmacies, looking on the Internet, Internets are dying self diagnosed pets, they are under attack by retail, and they got to stay relevant, but they can’t stay relevant. Because they have a relationship that one on one relationship, we can give them the tools to really deepen that relationship that increases their relevance and as we’ve seen from the data they can, they can grow effectively. There is plenty of demand by pet owners for care, for their pet, if they appreciate the value, that’s really not the constraint here; the constraint is the appreciation of their value.

Thank you. Our next question comes from the line of David Clair with Piper Jaffray. Your line is open.

Hi, good morning everybody. Thanks for taking my questions. Just the first one here from me, it’s just of kind of going back to the rebate and the incentives that you talked about. What percent of your customers are seeing the targeted levels that you’re offering here and then where do you see this method going in coming quarters and is there something that you’re offering to all your customers or just new accounts?

Is that we’ve -- this has evolved overtime and these are generally new account placement strategies. Although we have another form of rebate that’s had some similarities to this that we had converted our customer base to in 2011 from a prior rebate structure that we had run for a number of years. And so there is really a lot of different flavors. And -- but we see, we’re very excited by how this really inspires customers to advance the standard of the care they can provide by really using the instruments that they were designed to be used. They can now run complete profiles, full 22 chemistries. That’s a good complete profile and a CBC that is really not different that they will get from the reference labs. And this has been the hallmark of IDEXX’s hematology strategy for many years and certainly augmented by the pro-sight and so what this does it sort of a final step here to move them to -- moving to in-house for standard first line diagnostic testing.

Okay. And then just a quick one on the 2011 guidance. Specifically we see like 4% or more sequential revenue increase from the third quarter to the fourth quarter and your guidance implies less than 1%. Just wondering if there is something going on there or I guess how should we look at that?

David, I think that the driver here in a step-down is we’re going from pretty high growth in livestock and poultry to pretty flat growth in the fourth quarter as I indicated. I think if you were to look at our Companion Animal lines of business, you would see very consistent organic growth.

Thank you. Our next question comes from the line of Miroslava Minkova from Leerink Swann. Your line is open.

Let me start with the economy. And I thought your comments were interesting that you are seeing minimal and gradual improvement in the economy and at least being curious, I’m pretty volatile economic data here at least from what we see. I was just curious may be if you could tell us anecdotally what you’re hearing from the vets and what you’re hearing from the customers and how they feel about their patients coming in, and patient traffic? And what’s driving your optimism that things are not going to get any worse out there?

Miroslava, thanks for the question. Let me start with the last one first. I guess what’s driving our optimism is, like you said, there was a tremendous amount of economic volatility in the third quarter, stock market and other things, and yet our trends held and were every so slightly improved over the first two quarters. So they seemed to be somewhat robust to the noise that we make here. We’re hearing, its all over the math and in terms of what we hear from practices, but what we’re hearing more and more is okay I get it, it’s not going to improve that much, we’re not going to wait for turnarounds, what can I do in my practice to be more successful? What can I do to take control over my own destiny because the market is not going to help me? And then they’re inspired when they see their colleagues who are effectively growing with those strategies and so we see a slow and broader adoption of this chain. The veterinary profession historically never really had to worry about in inspiring pet owners because they just came in and they just asked for everything. And now they got a move to, it has become more of an economic necessity in the current environment where the consumers get tickled about everything to communicate the value of the rather sophisticated medicine that they’re able to practice. But of course they’re finding it, if they do so that the pet owner response. And so, there is, obviously there is practices in all stages of change that are going on, and we see it as incumbent upon us and of course we’re working with the industry partners too to do that because the veterinary profession is our channel to the ultimate market, which is healthcare demand.

Thanks for these comments. And then the strong VetLab placement that we saw this quarter, I appreciate there is a marketing programs which clearly are working for them, but what does this mean for the fourth quarter Jon? I mean obviously, they were extremely strong but was there any demand that perhaps will fold into the third quarter that might have otherwise occurred into the fourth quarter? And then finally, my final question is any updates on the FTC investigation when would you hope to get this behind?

Okay. So we gave our guidance for the full year, which of course implies for fourth quarter. No, we didn’t pull anything in from the fourth quarter to the third quarter with instruments, we usually get a placement back, if anything we had a little bit ever so stronger backlog going into the fourth quarter although it’s relatively small. We’re very confident of both fourth quarter and the full year placements based on the momentum that we have and then I did mention that what did not yet really kick in, in the third quarter was Japan for catalyst, over launch catalyst in Japan we had a limited launch to ensure really, really good customer experience. Japanese customers are the most discerning in the world on quality and it was a great limited launch and we’ll ramp it up in Q4. So we’ll get a little benefit from that. So we’re very confident of our full year numbers. With regard to the FTC, I’ve a couple of comments. First, we did receive a request for additional information in August from the FTC; we provided a response to that request. We have no reason to believe that the focus of the investigation has changed from really where it was than the whole time. Prior to this court request, we believe the FTC was getting fairly close to deciding on a resolution to the investigation. But at this time we believe the FTC has not made any decision and is still considering all the information that it has received over the last 18 months. I think it’s fair to say that there is no particular process here. We can’t really predict how long the investigation will continue or how it will be resolved. As we said before, we think we have many reasons, we have a strong legal position including the two federal court decisions in our favor on the same issue, as well as the obvious intense competition that we see in the marketplace, which benefits our customers and tends to indicate that our distribution contracts do not foreclose competition. I think there are many ways to access the bargain and people are being quite successful, our competitors are being quite successful and I’ll tell you it’s a very intense competition. Our strategy is to continue to innovate and as a result of the innovation provide a new value to veterinarians to handle the economy and to move the practice medicine forward.

Thank you. Our next question comes from the line of Jonathan Block with SunTrust. Your line is open.

Thanks and good morning guys. Just may be this is the first question on the 2012 guidance Jon and Merilee. The 79% organic growth looks real solid but the $3.05 midpoint just back of the envelope implies about 50 or so bps of op margin expansion versus prior years when you’ve done a 100 or north of a 100. So maybe can you speak to a little bit on why that’s the case because also when I think to ‘12 you should have some of the big insurance placements that you’ve been experiencing in ’11 elevate and you would think consumable would really drive the top-line which is higher margin. So maybe if you can speak to the dynamic and then I’ll just also layer into that question, Merilee, does that ‘12 guidance also reflect the share, the accelerated share repurchase that you announced this morning?

Let me start with the last question first, yes we did announce that the Board had, our Board of Directors had increased our share authorization by 4 million shares. This is something that we do, kind of typically as we find ourselves, working through our repurchase program. So it’s not really, we’re not indicating with this that we’re looking at any sort of acceleration in the program but more I’d say a continuation of our program that’s been quite consistent over a long period of time now with repurchase that reduces our weighted average share count by 2% to 3% per annum. So I think that what we’re looking at here as we talk about 2012. I guess one thing that I would say about the guidance just to reiterate because I know there were a lot of members that were mentioned but we do not have in this guidance three or four kinds of benefit from Federal R&D tax credit that of course we’re experiencing in 2011. So that’s just something to keep in mind, but it’s well I think if we -- well we haven’t given all the line item detail for 2012, yes for our P&L, I think that what we’re -- what we continue to target here, as we’ve said in the past is, something that on an annual basis should see 50 to 100 basis points of operating margin expansion over the next few years and it will vary a bit from year-to-year but that’s about what we’re targeting. And that balances the initiatives that we’re getting out of our two major businesses our in-clinic instruments, VetLab business and as well our Reference Labs. This is going to show up in the gross margin line, but we’re going to continue to make investments, they’re going to be in product innovation, they’re going to be in our commercial activities and things and we’re going to see those show up in OpEx. So I think between the balance of those two, we do expect that we’re going to see some margin expansion and we will fine tune all that and share that with you more explicitly in January.

Yeah just a follow-on, we really, the opportunity kind of it is on as exciting as ever, and of course what that does is drive long-term growth and shareholder value creation and we balance that with the need to generate good returns on the investments we’ve made historically as you would expect and you would see margin expansion in our two big businesses. The other thing John I’d say is I don’t know, think and it’s a surprise to anyone I mean we’re in a world of pretty big uncertainty. There is of course the economic uncertainty around the world, there is currency uncertainty, you have the currency assumptions that Merilee gave that implicit in our 2012 guidance. There is policy uncertainty. So we’re in a period of uncertainty and we think the guidance is appropriate given the all the factors that we’ve just discussed.

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All right. I will handle the accounting first. Yes the discounts they do get recorded in the top-line. Its -- we allocate those discounts across both the instruments and the consumables. So there is a reduction in the stated sales price of both the instruments and then the consumables as they’re sold off.

And that’s been our consistent practice. We’ve always had marketing incentive programs I think, as long as I can remember over the last decade, across our equipment and rapid assay business and they’re netted against revenues. The -- our marketing strategy has really had absolutely nothing to do with the FTC. I mean they’re just the right things to do from a innovation point of view, there is absolutely no connection. We are, as I said, we’re very confident and quite frankly it’s possible to think it could resolve in our favor sooner rather than later, but I think the other scenario if it doesn’t resolve for a long time I don’t, I think, but we’re not, we’re operating in an environment where we’re focused on competition, we’re focused on innovation and we’re focused on commitment to our distributors, that’s been consistent with our strategy over a couple of decades.

Thank you. Our next question comes from the line of Nicholas Jansen with Raymond James & Associates. Your line is open. Nicholas Jansen - Raymond James & Associates: Hey, good morning guys. Just a quick question on practice information management system segment, certainly, a little less in your expectations for the quarter and in the first half of the year was a little sluggish as well. I’m just trying to get a sense of what you’re doing there to kind of reintegrate the top-line growth heading into 2012? Thanks.

Yeah. The -- those are really two related businesses, one practice software business and the other one is the digital radiography business. I think the weaknesses has been more in the digital radiography business. The practice management software business has performed very well. As I mentioned, the mid-teens growth in the Cornerstone placement revenue, although there are other elements of the Cornerstone, of the practice management software, the other components of the revenue that’s the most strategic one because placements generate all the follow-on relationship. But on the digital side, I think we’re very excited about the new innovation that we brought in the mobile app and that really get people excited. And it’s something that we can do uniquely, because we’ve developed our own digital packs of software, that’s veterinary specific. We didn’t license the third-party software, we developed our own, we have fully control over that code, and it allows us to move in it’s own on current technology code all Java based, and it allows us to move very quickly on software innovations that are not just on the surface but fully integrated in the practice. I think what’s important here is that you can do things quickly on the surface, but they don’t really work very well on the practice, if they’re not fully integrated into the medical record and into the billing system more and more that is the standard and we’ve been the leader in that area, and allows us to introduce these new things like the digital labs that are, continue to add the benefit of that full integration. Nicholas Jansen - Raymond James & Associates: Great. And then just maybe on the international front, at the Analyst Day you talk a lot about kind of the opportunities received, just is there any areas of strength right now that you’re seeing on the placement side? And then, corollaries, or any areas of kind of the economic uncertainty over there kind of causing weakness? Thanks.

Well, I think we’re very pleased and impressed with our performance of our colleagues in Europe. It has the highest growth rate region, which is at odds to what you may hear in the news. I think it’s because we’re bringing innovations up in our primary businesses of the in-house and the reference labs to Europe. And just seems like there is a lot of growth opportunity irrespective of economy. And as I think the other thing I would reinforce is despite the fact that Japan has had a tough economy, a Catalyst is very, very perfectly suited to the Japanese market and so we’re excited that we’re going to be ramping the Catalyst placements after a very successful limit launch period starting in the fourth quarter.

Thank you. Our next question will come from the line of Ross Taylor with C.L. King. Your line is open. Ross Taylor - C.L. King & Associates: Hi. My question relates to that your 10% to 20% increase in your panels that you see customers learn with some of those new marketing initiatives you have. And I just want to get a little bit of clarification around that. Number one, I think you said that those placements are really to new customers. So I was curious as to exactly what you’re comparing against. Is that on average for your installed base of Catalyst or something else, did I understand that correctly?

Yeah, we’ve had a variation of these types of protocol incentives with new product placements for the last three or four quarters. And so, but not every instrument is placed, we definitely we have a lot of different ways that we’ll place an instrument. So we compare instruments that are placed with those like a real time care protocol versus an instrument that was placed without that, with some other marketing program. And so we do compare it to a control group as best we can. I mean we’re scientists here as well as business people, so we take a scientific approach analyzing our financial data. And so it is -- it’s a 10% to 20% more profile is being run. So we’re talking about more samples being run, let alone the intensity of the number of tests that are run on that sample. Of course the intensity is partially offset by the rebate. But let me say that the intensity certainly makes up for the rebate. I will say that these are early returns and we’re tracking this. It’s better to have more numbers rather than less, and have risk of parsing the data too finely. It does appear that they’re improving, these returns are. I mean that the growth and the impact and the change are getting better to the extent that it’s able to pass that data. I think it’s generally consistent. We step back from all of this. This is what’s driving and a lot of moving parts in our consumable growth. There is domestic, there is international, there is visiting customers, there are new customers. Do they have a ProCyte? Do they have a LaserCyte? Have they added a ProCyte to an account that previously had a LaserCyte? That is we’re going to keep them…

I would say, if you look at kind of consumable volume generally and in North America, generally, over half of the consumables -- of the customers that generally, over half of the consumable volume are taking advantage of some kind of incentives, a protocol based incentive program. And that’s because we moved and there are lot of different flavors depending on, I think we’ve really refined in the third quarter of new instrument placements. But they’re lot different flavors and that’s because we move from a prior incentive program that was kind of not as effective it was sort of frequent flyer program type thing, the more IDEXX stuff you bought the more discount you got to ones that are really based on specific protocols that they run and we’re able to do that, because of the, as Merilee mentioned, the ability to move our installed base to Smart Service. So Smart Service happens to be a huge enabler to us being able to move to this different, more medically relevant incentive program.

Thank you. And looks like we’ve time for one final question and that will be from the line of Anne Wilson with Bank of America. Your line is open.

Hi, thanks for saving some time for my questions. Most of them have been answered, but I know you don’t give specific product pipeline. But if you could talk about maybe where your focus is, is it all on IT now or basically where should we be expecting new drivers in the form of I guess new products near-term?

It’s not all on IT, although we think IT is a very exciting area and certainly was the base for the lot of things I talked about the call Anne and so thank you for the question, and the opportunity to say it’s beyond IT. If we see opportunity for additional tests, whether they be run on our existing equipment, which is a very nice thing when you expand the menu on the equipment, you expand utilization, you expand the differentiation of that equipment and you didn’t have to place the equipment, you already have a ready installed base you can adopt it. We have some exciting developments in the area of our SNAP platform in the pipeline and we’re continuing to develop medically relevant specialized tests for the Reference Labs. So the whole area of the diagnostic technology is I think is just as an attractive pipeline as IT what I would, the reason why I focus on some of the technology IT areas is because it’s been becoming more important to us, but it doesn’t reduce the importance of the diagnostic innovation.

Okay. And I understand that you can’t -- you don’t really have too much visibility on FTC and other than there formal disclosure, how will there be some sort of filing when you do get some sort of decision with potential ramifications?

Yeah, it’s really hard to -- will let investors know as we know things, it’s because there is no particular set process, it’s not like going through the USDA or the new product approval. It’s really hard to speculate exactly how things might unfold. But as we’ve done I think from the very beginning, we discussed this from the very moment that we received an inquire from the FTC before it was ever moved into a formal investigation with the subpoena, we kept investors informed, we’ll actually be coming up on two years on this investigation soon.

Thank you. And with that I would like to turn it back over to you Mr. Ayers.

I want to thank everybody for joining the call and we look forward to discussing our full year results in January. Also I want to congratulate all the employees at IDEXX on continuing to deal, innovate, and grow, in what is I think otherwise somewhat stagnant economy. Thank you very much.