Good day, ladies and gentlemen, and welcome to the PerkinElmer First Quarter 2008 Conference Call. My name is Antoine, and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions]. I would now like to turn the call over to Mr. Mike Lawless, Vice President, Investor Relations. Please proceed, Mr. Lawless.

Thank you, Antoine. Good afternoon and welcome to the PerkinElmer First Quarter 2008 earnings conference call. If you have not received a copy of our earnings press release, you may get one from the Investor Section of our website at www.perkinelmer.com or from our toll-free investor hotline at 1-877-PKI-NYSE. Please note, this call is being webcast live and will be archived on our website until May 24the, 2008. Before we begin, we need to remind everyone of the Safe Harbor statements that we have outlined in our earnings press release issued earlier this afternoon and also those in our SEC filings. Any forward-looking statements made today represent our views only as of today. We disclaim any obligation to update forward-looking statements in the future even if our estimates change. So, you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures we plan to use during this call to the most directly comparable GAAP measures is available as an attachment to our earnings press release. To the extent we use non-GAAP financial measures during this call that are not reconciled to GAAP in that attachment, we will provide reconciliations promptly. I'm now pleased to introduce the President and Chief Executive Officer of PerkinElmer, Rob Friel.

Thank you, Mike. Good afternoon, everyone, and thank you for joining us to discuss PerkinElmer's first quarter 2008 results. Also in the call is Jeff Capello, our Chief Financial Officer. During today's call, I'll walk through the drivers to our first quarter performance and discuss our priorities for the year. Jeff will then provide some details on our financial performance and then we will open the call up for your questions. The first quarter was an excellent start for 2008 as both our revenue and earnings exceeded our expectations. In particular, our organic revenue growth at 10% is the best first quarter in over five years, which we feel especially good about given the uncertain economic outlook. Our strong performance in Q1 was attributed to the resiliency of many of our end markets and very good operational execution by our employees across the organization. In addition, we are benefiting from the investments we've made over the last several quarters in new products, facility expansions and bolt-on acquisitions. We are also quite pleased that our adjusted operating income was up 24%, driven by good growth in our gross margins. While the revenue growth was a big driver, it was also due to excellent performance out of our factories and the improving mix of our businesses as a result of our investment priorities over the last several years. Turning to the major drivers of our performance in the quarter, in genetic screening, we had another strong quarter of growth. Our end markets in these areas are continuing to grow in the mid-teens, driven by the increasing awareness of the benefits of early and more accurate detection of disease. However, we are growing faster than the end markets in these areas due to the introduction of new products, the strong performance of our…

Thank you, Rob. Good afternoon. I will now provide some details on our financial performance for the first quarter of 2008. Then I will provide guidance on our outlook for Q2 before we open the call for questions. To the extent that I use any non-GAAP measures, those have been reconciled to the comparable GAAP measures in the appendix to the press release on our website. As Rob noted, Q1 was an excellent quarter for financial performance. We generated strong topline growth, improved operating margins, and had excellent earnings per share growth, which gets us off to a strong start for 2008. Starting first with revenue, we finished the quarter of 2008 with sales of $482 million, up 20% compared to $403 million in the first quarter of 2007. Changes in foreign exchange rates and acquisitions contributed 600 basis points and 400 basis points respectively to our consolidated sales growth in the quarter. By segment, sales growth was 19% in LAS and 22% in Optoelectronics. Of the LAS sales growth, approximately 600 basis points came from foreign exchange and approximately 600 basis points came from acquisitions. Optoelectronics increased approximately 300 basis points from the impact of foreign exchange. The remaining revenue comparisons are presented on a reported basis, which includes the impact of foreign exchange and acquisitions. Revenue strength was delivered across the board in our LAS businesses. Genetic Screening business, which was 19% of LAS revenue, increased very strong double digits driven by excellent growth in our neonatal, prenatal and new cord blood banking platform. The Analytical Sciences business, which represented about 35% of LAS revenue, increased sales in the strong double-digits driven by robust performance in inorganics, which includes our IAA, ICP, ICP Mass Spec product lines, driven by environmental applications such as clean water and consumer product…

[Operator Instructions]. Your first question comes from the line of Peter Lawson with Thomas Weisel Partners. Please proceed with your question.

Well, just wondering if you could talk through pharma, what it was likely for you for the quarter?

Okay. This is Rob. So, I would say pharma was really almost a tale of two cities. I think on the reagent side, as we mentioned, we saw good growth. They seem to be continuing to invest in their experimentation and running screens. So, at least on the reagent side we saw strong growth. I think on the CapEx side, as I mentioned, it was negatively impacted by, I think, a slowdown in expenditures and deferral of, I would say, high-end instrumentation. Having said that, there was... I mentioned it's becoming a relatively small piece for us now and in fact in the first quarter it was less than 7% of our revenue.

And then…

On the instrument, it was less than 7%.

Okay. And then on the revenue growth, the organic growth of something like 10%. What level of that is sustainable, was there anything unusual in the quarter?

So, Peter, this is Jeff. So, typically I think we've given rough guidance from a medium-term perspective of 6% to 8% organic growth in the company. I think we... obviously we exceeded that in this quarter and if you look at kind of the areas where we kind of exceeded the ranges, the problem is on the Opto side, because we achieved almost 7% organic growth on the OES, which is kind of on the midpoint of that range. In the two years of Opto that performed kind of, let's say, better than the average range going forward is the medical imaging business, which had just phenomenal yields and so that's difficult to predict on an ongoing basis. So, those were a little higher than we anticipated. And then the mobile phone, which is in a start-up phase, and we shipped kind of a large order. So, both of those factors were kind of probably the primary drivers that drove the organic growth above kind of the 6% to 8% range.

And then in the oil and gas market, was there any slowdown towards the end do you think in the quarter or heading into Q2?

If anything... I think we're seeing increased demand for analyzers in the oil and gas area, particularly because we find as the price of gas goes up, the recycling increases significantly. And where we sell into it is mostly the people that are doing the recycling of the oil. And so, we are actually seeing a benefit from the higher price of gas.

And I think the other benefit we see, Peter, is one of the growth initiatives within EcoAnalytix is in the whole biofuel or alternative fuel area and given the price of oil, there is a lot of development work being done there and we are putting more and more instruments into those facilities.

Okay. Congratulations on the quarter and thank you for taking my question.

Thank you.

Thank you.

Your next question comes from the line of Quintin Lai with Robert W. Baird. Please proceed with your question.

Hi. Thank you. Good afternoon and congratulations on a nice quarter.

Thank you.

With the current environment that’s out there, excluding the pharmaceutical issues, I think that most people have talked about this earnings season, has there been any change in the visibility for your customer demand? And in particular on your medical imaging, it sounds like that you are still in a situation where you sell as much as you can make. What are you hearing from your customers with respect to their hospital customers?

So, I would say in the medical imaging area, we still see strong bookings, strong demand. So, we have not seen any tail off in the demand for our panels in the first quarter at all.

And then…

And I think one of the reasons for that is because you’ve got this converging going on from digital to analog and I think it's still relatively early days. And so... so I think that's going to continue to drive the growth on the... for our panels.

Great. And then with respect to the environmental testing side, historically that hasn't been linked to kind of macroeconomic conditions, but more to the regulated market. Has that changed any in your opinion?

Yes, I think it is, because I think it's becoming less driven by regulation and more driven by really the consumer to a large extent. It's almost impossible to go through a couple of days without seeing something in the paper that is raising some concerns around contamination. So, whether it's counterfeit drugs or whether it's melamine or whether it's toys, it just continues to increase the awareness across the globe. And I think that, to a large extent, is what’s fueling the demand.

And then last question, I will jump back into the queue. With the ViaCell acquisition, I know it's still early, but are you seeing any out-of-the-box synergies with branding, especially with the PerkinElmer now as the parent company? Any pick up in either OB/GYNs taking up the cards or... and passing them down.

So, ViaCell had a good quarter. I would say it's probably a little early to tell whether the PerkinElmer synergy is having any impact on that. I would say we're... we're progressing well into the integration and I would expect probably the back half of '08 is before we would see any of the benefits from the integration with the NTD and the ViaCell sales force, which is really using the channel into the OB/GYN.

All right. Thank you. Congratulations again.

Thanks.

Your next question comes from the line of Mike Cherney [ph] with Deutsche Bank. Please proceed with your question.

Hey guys, good quarter, as I think Quintin said before.

Thank you.

I just want to talk a little about the Optoelectronics business, obviously [inaudible] in the past, last few quarters have definitely shown nice rebound acceleration of growth. You talked about within different spaces where you guys think you are in the overall product cycles in that environment?

So, I would say starting first with the mobile phone, Jeff talked about, I would say very early days. We shipped a fair amount in the first quarter, but we think the adoption of Xenon Flash will be… continue to gain ground in mobile phone. So, I would say that’s relatively early. I would say digital imaging, as I mentioned before, I think our estimation is probably 30% penetration into the analog conversions. So, I think you still have a lot of room to run there. And I think the one area that is being, obviously, slightly impacted by the economic environment is the sensors, but I think we've got some opportunities there to take some of our sensor technology into exciting applications. But I would say that's the one area where I think it is being impacted a little bit by the economic environment, but both lighting and digital imaging, I would say is, fairly early in the life cycle.

Great. And then, Rob, you've been with the business obviously for a while, but as you kind of grow into the role of President and CEO and take a bigger look at the overall business, are there any holes or areas that you want to beef up on the acquisition or investment front, specifically within any of the... either life science or Opto side of the business?

No, I think it's fairly consistent with what we have been doing in the past. I would like to do more in the Analytical Sciences area from an acquisition perspective and we have done a couple of things in genetic screening in the last sort of 18 months. We are fairly active in the BioDiscovery area. And I would say periodically, we’ve done some things in service, nothing big, but relatively small. I would say Analytical Science is an area and then also in Optoelectronics, I think we’re looking for some opportunity to fill some holes, as I mentioned particularly in the sensors area, it's something that we would like to do. But I don't... I wouldn't say anything different than what you’ve seen over the last couple of years and consistently sort of both-on acquisitions that add either product technologies or market reach.

Great. And then just one more quick housekeeping question, I might have missed this, but what was your activity on the share buyback program during the quarter and what are your plans going forward?

This is Jeff, so we did not buy any shares back in the first quarter and we have 1.9 million shares remaining under the 10 million program we had approved by the Board. And I would expect that we would execute against that within the next couple of quarters.

Okay, great. Thanks guys. Congratulations again.

Thank you.

Your next question comes from the line Derik De Bruin with UBS. Please proceed with your question.

Hi, guy. This is Dan in for Derik.

How are you doing?

Hi, Dan.

Good. Just a question about the genetic screening opportunity, I know during the Analyst Day, one of more salient opportunities that you had talked about was the global opportunity. And I was just wondering whether there are any differences in the reimbursement or managed care landscape, looking at some of the global markets that perhaps we’re unaccounted for and maybe just surprise you guys as you try to move the tests at the international market?

Is this in newborn area?

Yeah.

Yes. So, we've been operating in the newborn area internationally for quite some time. So, we have a large presence there in Europe and I would say the only area that is relatively new probably in more some of the Pac Rim areas. And I would say at this point we're not seeing anything different from a reimbursement perspective, as we’ve seen in other areas. But keep in mind we’ve been global in the newborn screening for a long period of time. That business is based in Europe, as you probably know.

Right. Okay. And then, I have to ask… [inaudible] my phone cut out. For full-year guidance on the organic revenues, you reiterated what you would have said in fourth quarter, is that correct?

We're going to be at the higher end of that range.

Okay. Great. Thank you.

You are welcome.

Your next question comes from the line of Jonathan Groberg with Merrill Lynch. Please proceed with your question.

Hi guys. Congratulations on a good quarter.

Thank you.

Just a couple of quick questions. One, can you may be… Rob, can you talk about the Rad [ph] business, I know that someone had left that business, I’m just curious if you are actually seeing that stabilize as you maybe thought you would, is it clear?

Yes. I think it is stabilizing and I think because of the less competition we’re actually seeing a little bit growth there. And one of the other areas is we're looking to develop other opportunities in the broad reagent area. So, I think you will see for 2008 that will actually be a positive contributor to our organic growth.

So, it did grow in the first quarter organically?

It did.

Okay. And then back to the… kind of just touching again on ViaCell, you said it's maybe too early to see if there are going to be any synergies. But just from a sales force standpoint, has there been any attrition there or have to pull a staid, has the thing that you bought, is it still there?

Yes, it is. We've had very little attrition there and let me just sort of correct your comment, we will see synergies, I don't think, there's any question, I'm just saying it was too early to see anything in Q1.

Right.

So, I think we are fairly confident, we're going to get some synergies in the back part of the year.

The major reason then you bought…

No, we've have been able to hold, I would say almost all of the employees there.

Okay. I mean the major reason you bought it was the sales channel and the ability to sell [inaudible].

Correct.

And they are still there and is there a level of excitement, they sort of look forward to having more tools in their tool bag there?

Yes. I think they do. I think they are quite excited about the NTD products. And we're in the phase right now we're starting to train them on these products.

Jonathan, this is Jeff, I think another reason why we bought it because this is an 83% gross margin business, which we think we can grow 15% to 20%. So, that's a very important factor to remember.

Sure. And you said... I mean some people have questioned the... whether or not they would be economically sensitive, as well the people would see this as more discretionary spend, but that business grew in the first quarter as well from year-over-year?

It is, yes. It showed good growth in the first quarter. So, at this point, we haven't seen any impact as a result of sort of, let's say, deteriorating economic conditions.

Okay. Great. And then last kind of housekeeping question for you again Jeff on the full-year EPS and FAS 123 expense, I don't know if that, do you still kind of expense for us, expect… I think it around $0.04 for the year or is that… and other companies have kind have been changing that around a little?

Yes. John, I think, it will be $0.05 for us for this year.

$0.05, okay. Thanks a lot.

Thanks.

Thank you.

[Operator Instructions]. Your next question comes from the line of Ana James [ph] with Seligman. Please proceed with your question.

Hi, this is Vishal Saluja. Thanks for taking my question. Good quarter. Jeff, just on the gross margin improvement going forward, obviously a good start there, actually good operating margin improvement. Are you counting on mix to improve margins further here or are there specific actions that you can point to that will make us feel comfortable that you would get there? And then I have a separate question.

Yes. So, Vishal, I think it's going to be both. I'm certainly… ViaCell is very helpful at 83% gross margin and the growth we are getting of that, that's a positive contributor to the gross margin. Each of our businesses have specific initiatives, they kind of improve their gross margins whether they would be improving the mix in terms of products we sell or driving down the cost of the goods or for pricing initiatives. So, I think it’s a combination of a number of things that we’re successful in the first quarter that I think it will be equally, if not more successful to work away through the year.

So, the way we should think about operating margins really is stepping up from 40% to maybe... sorry 40 basis points to maybe a percent by year-end?

Yes, I think we’ve said 50% to 75% for the first half because of the ViaCell impact and then getting up to kind of 75% to 100% by the back half.

Okay. That's great. And then just on a mobile phone opportunity, are you currently shipping primarily to one customer or are these multiple customers that you now have orders from, just trying to understand the level of sustainability of that business? Thanks.

So, in the flash too, that's going to multiple customers in the case of flash modules. It’s at this point largely going to one customer, but I would say that that will change here relatively shortly.

And that's one customer and one phone model.

Okay. How much visibility do you get into the order pipeline of your customers? Can you give a sense of how much lag there is between sort of when they give you the order to when you actually have to ship these things?

Is it specific to mobile phone or across PerkinElmer?

Mobile phones, the flash modules specifically.

Well, I would say we probably have a couple of weeks visibility into those orders.

Okay. And then just for Jeff, a last one on Easter falling in Q1, did you see any impact of that at all or was that not significant enough on the runway type of businesses to really call it out?

Yes. We saw a bit of an impact, but not a measurable impact and I think the calendar was set well before the year started, so…

Okay great. Thanks, Great quarter.

Thank you.

There are no further questions at this time. I would now like to turn the call back over to management.

Okay, thank you. So, we are off to a great start here in 2008. I think we see good momentum across most of our businesses. And I look forward to continuing to share with you our progress against our priorities in the coming months ahead. Thank you for participation in today's call and interest in PerkinElmer. Operator, this call is now adjourned.

Thank you for your participation in today's conference. This concludes the presentation, you may now disconnect.