Good afternoon. My name is [Chastity] and I will be your conference operator today. At this time, I would like to welcome everyone to the Millipore Q1 2009 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions). Thank you. Mr. Young you may begin your conference.

Thank you very much [Chastity]. Good evening everybody. I would like to welcome you to Millipore’s first quarter 2009 earnings conference call. My name is Joshua Young and I am the Director of Investor Relations for Millipore and joining me on today’s call are Martin Madaus, Chairman, President and CEO; and Charlie Wagner, Chief Financial Officer. In addition to the earnings release we issued earlier today, we will also be referencing a slide presentation as part of today’s call. This presentation can be viewed by clicking on the webcast link on millipore.com, or by accessing Millipore’s Investor Relations website. A PDF copy of the slides will be posted to our website after the call. We will also be referencing non-GAAP information. A reconciliation of our GAAP financials to our non-GAAP financial measures is included in our earnings release and posted on our website. Before we begin, I will make the usual Safe Harbor statement that during the course of this conference call, we will make forward-looking statements regarding the future events or financial performance of the company that involves risks and uncertainties. The company’s actual results may differ materially from the projections described in such statements. Factors that might cause such differences include but are not limited to those discussed in today’s earnings release and in our Form 10-K, as well as other subsequent SEC filings. Also note the following information is related to current business conditions and our outlook as of today, May 7, 2009. Consistent with our prior practice, we do not intend to update our projections based on new information, future events or other reasons prior to the release of our second quarter 2009 financial results which we will issue in August. Now, I would like to turn the call over to Martin Madaus.

Thanks, Joshua; I will speak briefly about the first quarter results before getting into a more detailed commentary about our performance. I am very pleased to report that the first quarter was an outstanding quarter of financial performance for Millipore. This performance is especially impressive when you consider that we are operating in one of the most challenging economic environments we have experienced quite sometime. We have reported strong revenue growth in the quarter. This top-line performance was driven by a rebound by our process division. The division generated best performance in the past six quarters as our large North American biotechnology customers return to higher levels of spending. Our bioscience division also posted solid results in a competitive environment while many of our peers are reporting decline in revenues. Our strong top-line performance this past quarter reflects the resiliency and attractiveness of our business model. We have build a differentiated portfolio of consumable products and services that are less effected by reductions in capital spending. But approximately 90% of our revenues derived from consumable products and services we are well positioned to grow during this tough economic down cycle. Millipore’s business is down globally and also across several end markets such as pharmaceuticals, biotech, academic research, medical devices. Additionally our exposure to industrial markets is small which makes us less effective by the current steep decline in those markets. In addition to our healthy top line growth in Q1, another key takeaway, significant operating leverage we generated in the quarter. This high level of operating leverage led to exceptional earnings and free cash flow growth. In the middle of last year, we decided to implement initiatives that would increase our operational efficiency. In retrospect, these were clearly the right decisions, and the financial benefits of these actions were reflected…

Thanks Martin and I will now provide some additional details on Q1 and update our full-year outlook for 2009. To begin with the discussion of our GAAP performance in the quarter. Revenues grew 3% from the first quarter last year excluding a 7% unfavorable impact from changes in foreign exchange rates, revenues grew 10% in the quarter. This performance included a 1% contribution from our acquisition of Guava Technologies a transaction closed in February. Our GAAP operating margin increased to 17.5% from 14.5% in Q1 2008 and earnings per share were $0.95 compared to $0.55 in Q1 2008. The increase in profitability is primarily due to the improved gross profit as a result of the higher business volume and a favorable product mix. Our SG&A costs were relatively flat on a year-over-year basis, as higher employee related expenses were offset by the favorable effects of foreign currency translation. And our GAAP pre-tax income also benefited from $9 million gain on our acquisitions of Guava Technologies related to the favorability of the purchase price compared to the fair value of Guava's assets. Charges that reduced our GAAP profitability included $2 million of higher year-over-year cost relating to our global supply chain initiative and $1 million to $2 million of cost relating to our acquisition of Guava Technologies. Effective January 1, we adopted the provisions of FASB, APB 14-1 which relates to the accounting for our convertible debt. In connection with this accounting we recorded nearly $4 million of non-cash interest expense during the quarter. We have adjusted our historical financial to reflect this new accounting rule and we will include the charge in our non-GAAP reconciliation throughout 2009. From a geographic perspective excluding the effects of foreign currency translation revenues in the Americas increased by 14% compared to the first quarter…

Chastity can you please sum up the Q&A roster?

(Operator Instructions). Your first question comes from the line of Jon Wood with Banc of America.

Hey, good afternoon.

Hi John.

So Martin, on the Bioprocess business did you see any material contribution from new product, capacity builds or new indication builds or was the rebound primarily a function just the resumption of normal purchasing patterns.

I think predominantly there is the resumption of normal volumes that has the biggest impact. I know there are a few molecules that we are ramping up. I really don’t know whether they individually made a big impact. But we know there are few molecules that just got approved. So just probably little bit of that in there.

Okay. And then on the broader side has the instrumentation there been impacted at all by the capital spending related weakness.

Well it depends on the end market, we see continued strong growth on academic markets but we see the pharmaceutical markets have pulled back a bit.

Okay. And Lab Water instrumentation did it actually grow on a constant currency basis?

We don’t break that out.

Okay. And then Charlie could you give us whatever impact the FX had on the margin profile.

John we don’t break it down that carefully for this purpose. So what I can tell you is, it was $0.09 on EPS.

Negative?

Negative.

Okay, alright. Thank a lot.

Thank you. Your next question comes from the line of Ross Muken with Deutsche Bank.

Good afternoon and congratulations on a strong quarter.

Thanks.

There was a lot of noise made in the Biotech channel this quarter about inventory destocking and you heard some different commentary from some of the large players about, script performance. As you sort of look out, I mean, I know we obviously saw a nice stabilization in the comp in the following quarters pretty easy. But I think any clarity or any changes or any sort of actions you would have seen would be helpful or review of any thoughts on some of the things they have been discussed publicly, by some of the large peers.

Yes, I know Ross, what you are talking about it, we haven’t seen that in the inventories yet, on the bioscience and certainly not on the bioprocess side, we saw bioprocess return to a more normal inventory level and we haven’t seen that on the bioscience side yet, I know there was talk about it, but we have not been impacted by that. The only softness, I clearly pointed out and what we iterate is that, we clearly see a pull back in R&D spending by pharmaceutical companies and when you look at the trends for R&D spending for this year is forecasted to be that or even declining. So that has some impact also on laboratory activity which impacts us.

Excellent. And on the stem cell side, obviously quite a bit of change at the senior levels in politics in terms of the outlook. And as we look to stimulus is quite bit around general medicine etcetera, I know you mentioned some of the scrip, can you characterize any more interest levels around those product lines and talk a bit about your strategy there and what you are doing to kind of better whether it’s kit or create specialized work flows for some of the early work you think is going to go on there?

Yes, so today our business stem is in research and we have multiple product lines. And we have quite an effort under way to validate these various product lines for stem cell applications. So for example we came out with kits on a Guava instrument that can be used for stem cell research which is good. There are than some other areas that where you have truly unsolved problems where some investment and new product development is needed. So, we are doing that and we are starting to understand what our contribution could to be therapeutic use of stem cell. So, as a company I think we are quite well positioned to spend the entire range from research and development to also eventually production. The production of therapeutic stem cells is quite evasive way and there are some very significant challenges to overcome which creates a very good opportunity for companies like Millipore. It’s a good opportunity so as research progresses there will be a whole new market created in therapeutic stem cells and then we started to look into that.

Excellent congrats again.

Thank you, Ross.

Thank you. Your next question comes from the line of Marshall Urist from Morgan Stanley

Yes, hi guys good afternoon. The first question on the selling days issue. I appreciate you guys calling it out. Could you help us just quantify what it added to the quarter particularly between Bioprocess and Bioscience and I know Bioprocess probably has a little bit different selling cycle. So, how should we think about it? How that helped the quarter?

Yes Marshall, we have not really broken it out, the impact specifically average daily revenues or some such measures is not really relevant for our business. And certainly when we look at the full-year, the impact of the number of days is completely inconsequential. So, we have given you the number of days that the delta year-over-year and you can just take the estimate from that.

Okay. But would it be fair to say that the impact in Bioscience is probably greater than it is in Bioprocess?

No. Not necessarily.

Okay. Thanks. And then, second piece, and you gave some color around gross margins, I just wanted to understand a little bit more what happened in the quarter? Was there things within the Bioprocess mix that helped the quarter beyond just Upstream in terms of that Downstream business since that’s so much of the total. Was there other things with the disposable within there that also helps on the mix side?

Yes. Absolutely, if you look at the Downstream business and some of the filtration products in there, virus filtration and other products, as that business rebounded in North America, that carries a very attractive margins with it.

Okay. Got you. And then was there any impact of price in the quarter?

There was some but we don’t break it out separately.

Okay. Thanks. And then last question, I think you mention that operating expenses are going to up over the rest of the year. So, should we be thinking that R&D might track towards the sort of 7% target that you guys have talked about in the past?

You know, towards I would say. It's hard to say. If the R&D is as you know, there are great projects. So, I would be moving to 7 not so sure, but it will go up.

Okay. Great. Thanks guys.

(Operator Instructions). Your next question comes from the line of Tycho Peterson with JPMorgan

Hi, good afternoon. Congrats on the quarter.

Thank you.

Thank you.

A question on disposable manufacturing, I am just wondering are your discussions getting more strategic, or is it very much still on a product-by-product basis. I mean is there any topic of kind of standardizing going forward for new products on disposable, or how do we think about the ramp there?

Today, it's certainly a devise business where people sell components and customers assemble themselves these components. With the introduction of the Mobius FlexReady, we are the first company to offer a unit solution that is standardized. So we are basically all the different pieces that come ready assemble, pre-validated and tested for certain use and with a first company come up with a standard. So we will help driving standardization and that's what's new. We also have decided with the acquisition of Newport in 2006 to really invest into this field. So it will see us starting actually in a couple of months come out with some new products that bring us into new fields of disposable bio-manufacturing.

Okay. That's helpful. And then with Guava in terms of kind of flow cytometry, are you seeing consumable pull through from your existing bid, does that I am just wondering how we think about revenue synergies, formatting on that instrument portfolio?

I really don’t know whether, I know we launched the range of products, but I do not have that information yet.

We are confident Tycho that the kits that we are developing for that platform are key part of the solution and that systems will pull reagents. But it's a bit early to describe that the order of magnitude or the impact.

Okay. On Lab Water, are you expecting any sort of rebound into the back half of the year, I don’t know if it would be shared instrument grants or otherwise.

If more labs are being build or there is more money available we could benefit a little bit from that not counting on it right now.

Okay in the release I think you called about the animal free business fees the CellPrime. Can you just talk us as to how large a business that is today, can you talk about [Exide] as well doing pretty well in non-animal preside?

CellPrime is a significant product, but it's under 100 but its in the tens of million once it reaches peak sales. But these products take a long time to generate really significant revenues, but it’s a sign that we are expanding our product line. So it’s a significant product over time.

Okay. And than just lastly, can you comment on the specialty markets leverage some of these other the non-core business?

Yes, what we call industrial business we have more of that business in certain geographies. So, there is more of that business in Japan for example that's what we see definitely some impact just a very slow demand. No car manufacturers that use filters or beverage and Europe on the other hand more stable going sideways. Those I would to the major, major impacts in those markets.

Okay, thank you very much.

Thank you. Your next question comes from the line of Derik DeBruin with UBS.

Hi, good afternoon.

Hi Derik.

So what was the annual run rate on the Epitome and the Guava revenue is that, adding about a point to the overall revenue growth rate for the year?

Yes, that's about right.

Okay. And I just want to go back to the question that Ross asked, on the last call you said expected a stronger first half than a stronger second half of the year for your Bioprocess business and now you are commenting about the next 9 months same like that’s maybe moved up a little bit there. Is that just, is that are you saying slower 9 months, they were slower in the next quarter because of basically the unusually large size in 1Q or is there a change?

No, I mean Derik we have updated the guidance, we did make that comment in the earlier call. I think at this point now we have a quarter behind us a slightly different view on the way that the year is going to fall, obviously we are off to a very strong start. And so some of what we thought might occur later in the year has occurred earlier in the year, based on that we have updated the guidance.

Okay, fair enough. And just some housekeeping stuff. I didn’t quite catch the French R&D tax credit could you walk me through that?

We would expect it will be in the range of $4 to $5 million for the year.

Okay.

It's recorded in our R&D line.

Okay, it's in the R&D line, okay.

Yes.

Alright and did you say the non-GAAP SG&A was 27.9 the percent of sales?

Yes, that’s correct.

Okay. And just one final one. So the $0.15 for the acquisition that's, is that's also included in the $1.06 0 right?

No its not.

Okay, great. Thanks.

Welcome.

Your next question comes from the line of Isaac Ro with Leerink Swann. Isaac Ro - Leerink Swann & Company : Hi guys thanks for taking the question.

Hi Isaac.

Hello. Isaac Ro - Leerink Swann & Company : Hi, just a follow-up on disposable Bioprocess just wondering, how often do you find when you go in to the customer for example with the new Mobius system. And see that they actually are looking for disposable components as opposed to a solution because they are looking at retrofit existing stainless steel apparatuses and may be making some of the more permanent investments last a little bit longer is that sort of key variable that you are still fighting?

Well, its very early on the Mobius FlexReady, so this system is just being rolled out, it generates lot of interest and in fact the interest we are getting from customers who exactly have the issue, the systems that they have to assemble and then retrofit and then validate and make them work. So that's why it's clearly based on unmet customer need. We of course, still fell components we sale back, we sale assemblies, we sale all the different components too. So, we are not excluding that from our offering. I think of this new solution as something that goes above and beyond of what's available today but we still sale components and bags on a standalone basis. Isaac Ro - Leerink Swann & Company : If you look at sort of the early adopters for this kind of platform, is it sort of the smaller biotech some might little more agility in their fixed cost structure. And the flow companies that are maybe more going to look of smaller more scaleable ways to limit bioprocess?

Yes, those two, I mean it could be someone in process development, which just needs the flexibility and the speed and predictability, and it could be a smaller biotech which is simply doesn’t want to spend the time and the money on buying all these stainless steel equipment, those are the two groups. And as you know tighters are increasing and new molecules come in higher concentrations, you will be able to tap into more of the clinical development market and eventually even get to maybe commercial scale for highly concentrated product. Isaac Ro - Leerink Swann & Company : Okay. And then just separately on NIH stimulus, are you seeing any pick up in RFP activity can you talk a little bit about what your sales force on the channel late in the quarter maybe as some of the grant deadlines came up.

We see more grant writing activity, mainly for larger pieces of equipment which impacts us less and again we will see a modest impact on this. And on the other hand it’s not so clear yet where exactly all that money will go but it will be a positive. I think it will go first into instrumentation. Isaac Ro - Leerink Swann & Company : Okay. And then just lastly if you could maybe split even just roughly between your academic versus your drug industry customers, can you give us a rough sense of you know what the two are relative to each other in your business?

In the Bioscience division, I would guess Academia is maybe 30% to 40% definitely largest customer group and in the Bioprocessing business roughly half is Biotech and the other third is classical pharma and then remaining portion is what we call beverage or industry. Isaac Ro - Leerink Swann & Company : Thank you very much.

Thank you. (Operator Instructions). Your next question comes from the line of Peter Lawson with Thomas Weisel.

Martin with a return on the Bioprocess business is visibility improved, does that change in anyway from two years ago?

The visibility has improved a little bit. We have better information on inventory levels from some of our key accounts, we made a big efforts to make that happen and we will continue to work on that and getting at least some certainty on the supply arrangements on that. So, overtime I think this definitely improved, we have slightly better visibility but the visibility is still not good and that’s why we are still cautious about the outlook. We have managed that very tightly but frankly where we have surprises in the past was when, forecast policies were changed, or projections were changed on a relatively short notice. It's a bit of a nature of biotech, so it is in a way, unavoidable. But I do think it is slightly better.

Then, China, have you seen any slowdown there and how big is China for you? Are you going to see any benefits from the stimulus packages there?

I think we do. We saw it already. They just continue to grow strong. We have a strong organization on the ground which is growing. We expanded some of our service offering and we think it significant in our international market, significant enough to call it out. And I think we break the country (inaudible). I think that everything looks like it is going to continue as strong as it has.

Where do you see that kind of stimulus spend, is it into hospitals?

No. It is the research.

Okay. And then, you talked about the weakness in the service business? Would you elaborate on that and how big is that business for you?

That’s a drug discovery. It's a small business for us. And what drug discovery was one of the faster growing business over the last period. And we see drug discovery in our overall limit. More inconsistent there are some very good products that are going very well. But some of the drug discovery services that are basically contracts with larger pharmaceutical companies have either been not renewed or postponed or reduced. So, that’s definitely negative impact. And necessary was spending cuts, either you know, that we organizing, emerging things on hold, or they just cutting on R&D laboratories.

Thank you. We have reached the allotted time for questions. I would now like to turn the call over to Martin Madaus for closing.

Okay. So, I thank you for joining us this evening. We are off to a great start and we have a great opportunities to generate attractive revenue earnings and cash flow growth in 2009. We will be hosting an Analyst Day with investors in New York on Wednesday May 27th at New York Stock Exchange. This is a great opportunity to learn more about our business and meet the key members of our senior management team. If you are interested in attending you will need to contact Joshua and RSVP as soon as possible. That line is in few weeks. We have already lot of people signed up. If you don’t RSVP we cannot accommodate you at the event. Also looking forward to seeing many of you at the upcoming Merrill Lynch and Deutsche Bank Investor Conference. Thank you for attention this evening and good night.

Thank you for joining today's conference call. You may now disconnect.