Welcome to the AngioDynamics conference call to review thesecond fiscal quarter financial results. My name is Joshua and I will be yourconference coordinator today. (Operator Instructions) I would now like to turnthe conference over to your host for today’s presentation, Mr. Doug Sherk ofthe EVC Group. Sir, please proceed.

Thank you, Operator and good afternoon, everyone. This isDoug Sherk with The EVC Group and thank you for joining us for theAngioDynamics conference call to review the financial results for the secondquarter of fiscal 2008, which ended on November 30, 2007. The news release announcing the second quarter resultscrossed the wire this afternoon shortly after the market closed. If you haven’treceived a copy of the release and would like one, please call our office at415-896-6820 and we’ll get one to you immediately. Additionally, we’ve arranged for a taped replay of this callwhich may be accessed by phone. A telephone replay of the call will becomeavailable from 7:30 p.m. Eastern Time this evening and remain available forseven days. The dial-in number to access the replay is 800-405-2236 from theUnited States or for international callers, 303-590-3000. Both numbers willneed the passcode of 11104157 followed by the pound sign. This call is being broadcast live and archived replay willbe also available. To access the webcast, go to the AngioDynamics website atwww.angiodynamics.com. Before we get started, during the course of thisconference call, the company will make projections and other forward-lookingstatements regarding future events, including statements about the sales andthe company’s beliefs about its sales and earnings for fiscal 2008. Weencourage you to review the company’s past and future filings with the SEC,including without limitation the company’s Forms 10-Q and 10-K, which identifyspecific factors that may cause actual results or events to differ materiallyfrom those described in forward-looking statements. In addition, management will review various non-GAAPmeasures during today’s call. Investors should consider these non-GAAP measuresin addition to, not as a substitute for or superior to financial reportingmeasures prepared in accordance with GAAP. During today’s call, the company will discuss non-GAAPmeasures, adjusted income and adjusted EPS. Adjusted income and adjusted EPSexcludes certain expenses relating to the acquisition of RITA Medical,litigation damages, and others, including the cash benefit from the use of acquirednet operating losses and assumed taxes on net income where applicable. Management believes these measures provide investors withuseful information in comparing the company’s performance over differentperiods, particularly when comparing this period to periods in which thecompany did incur any expenses related to these activities or items. A reconciliation of all GAAP measures used during today’scall was provided in the news release distributed this afternoon and isavailable on the company’s website. Finally, during the question-and-answer period today, werequest each caller to limit themselves to two questions and then encourage are-queue to ask additional questions. In advance, we appreciate everyone’scooperation with this procedure. Now I’d like to turn the call over to Eamomm Hobbs, Presidentand Chief Executive Officer of AngioDynamics.

Thanks, Doug, and a happy new year to everyone. Thank youfor joining us today to review another great quarter in AngioDynamics. With meis Bob Mitchell, our Chief Operating Officer; and Joe Gersuk, our ChiefFinancial Officer. After my opening remarks, Joe will review the financialhighlights of the second fiscal quarter and our reaffirmed outlook for thefiscal year. Then we will take your questions. We generated net sales of $41.5 million for the secondquarter of fiscal 2008, which is 70% higher than the $24.4 million reported forthe second quarter of fiscal 2007. We executed our plan and delivered resultsright in line with our expectations for the quarter. Our overall sales performance was accomplished by growingthe RITA product line sales by 18% to $15.3 million and the AngioDynamicsproduct line sales by 7% to $26.2 million. Last year, during the fiscal secondquarter, we grew AngioDynamics product sales by 30%, so we faced a very toughcomparison this year. We are optimistic that our AngioDynamics product sales willreturn to our normal growth rate of at least 15% during the current fiscalthird quarter as compared to a year-ago period. Perhaps the highlight from the quarter from a salesperspective was the growth of our vascular access port sales. This product linegrew an impressive 20% on a year-over-year basis. This progress was especiallygratifying because one of the key attributes of the acquisition of RITA was thebenefits we thought could be gained by having our sales team manage the RITAport sales. You may recall that last quarter, the growth of thisparticular business was flat on a pro forma basis when compared to theexceptional sales performance of the first quarter of fiscal 2007. However, thebenefits we thought this product line would gain from the focus inrelationships of our AngioDynamics sales force are now being generated and webelieve we are well positioned…

Thank you, Eamomm and good afternoon, ladies and gentlemen.We continued our strong operating performance in the second fiscal quarter andachieved our financial objectives. Operating cash flow was particularly strongthis quarter and exceeded our expectations. Our first half operatingperformance indicates we are well-positioned to achieve the financial goals weset at the beginning of the year. Second quarter net sales increased by $17.1 million, or 70%to $41.5 million; $15.3 million of the increase was attributable to the sale ofproducts acquired from RITA Medical Systems and the balance was inAngioDynamics products. From a product group perspective, the interventionalproducts group grew by 32% to $32.1 million and constituted 77% of our totalsales. RITA’s port product line is now included in the interventional productsgroup, as are all of the products sold by AngioDynamics prior to the RITAMedical acquisition. The oncology products group produced sales of $9.4 millionin the quarter and constituted 23% of total company sales. International saleswere $3.9 million or 9% of total sales. Sales of RITA Medical products were strong across the board,from the recently introduced Smart Port CT, which drove a 20% pro formaincrease in port sales in the quarter, to the entire line of oncology products,which grew 26% over the prior year on a pro forma basis. We continue to see strong market demand for the entire lineof oncology products, with market leading devices and an excellent sales forceselling them. The pro forma rate of growth of all RITA Medical products in thesecond quarter was 18%, which reflects the discontinuation of a few low marginproducts following the acquisition. As mentioned in the release, we attribute the modest 7%organic growth rate in the sale of AngioDynamics products primarily to adifficult comparison to the year-ago quarter when the company reported 30%sales growth. Another way to look at it is that the sale of…

(Operator Instructions) Our first question comes from theline of Phillip Nalbone with RBC Capital Markets. Please go ahead.

Thank you very much. Good afternoon, guys. Eamomm, you lostme a little bit in your recitation about the IRE timelines, particularly thetiming of placement of some of the generator units. Can you go back throughthat and specifically when do we expect revenue generation from those boxplacements?

The IRE timeline is we are going to start placing boxes inQ4 of this fiscal year, which is spring, and our intent is to place 20 units,which we will have completed by well before the end of Q1, which is thesummertime, this calendar year.

Okay, and does that equate to the recognition of anyrevenues in that timeframe?

The revenues from IRE are going to be modest until weanalyze the data we get from the 20 leading centers and that revenue will beassociated with the consumables that those clinical leadership centers consumeas they do clinical cases with the IRE boxes.

Our next question is from the line of Jayson Bedford withRaymond James. Please go ahead. Jayson T. Bedford -Raymond James & Associates: Good afternoon. Just a quick question for you; in terms ofthe 20% port growth, I’m just wondering, what drove that? Meaning if you takeout the contribution from Smart Port, did you see true base port businessgrowth?

Well, Smart Port was definitely the shining star in the portsales and it’s hard to carve out Smart Port and then look at the base business.The majority of the Smart Port business was new port sales but we did convertsome existing customers to Smart Port.

Our next question comes from the line of Jason Mills withCanaccord Adams. Please go ahead.

These questions are rolling too quickly here, Eamomm. Happynew year. I’m going to follow on Jayson’s question on the -- well, moregenerally on the image guided vascular access business; could you give us asense for in total what the sales force, the AngioDynamics sales force did withthe entire vascular access business in terms of pro forma year-over-yeargrowth? And then help us understand or give us a little bit more color on whatyou are expecting in that specific franchise as we move into the back half ofyour fiscal year and in fiscal ’09, given that now you have seemingly some momentumwith a sales force selling the entire line and couple that with at least myunderstanding is you have not achieved any national accounts yet, which is over50% of the opportunity there.

Well, the image guided vascular access products, which areprimarily the Morpheus bedside insertion kit and the port product lines, grewat approximately 20% overall, so we were pleased with all the products in thosegroups and that was a solid reflection of the AngioDynamics sales force, or ourinterventional products group sales force, as we call them now, executing as weexpected they would when we gave them the port product line, which not only isan excellent product line but we’ve added new products and improvements,coupled with the great success we were having with CT injectable PICCs with theMorpheus and bedside insertion kit.

So did the existing non-port business, did that grow aboveor below the 20% level?

About the same.

Our next question is from the line of Suraj Kalia with PiperJaffray. Please go ahead.

Congratulations on a good quarter. Eamomm, Joe, one quickquestion; in terms of the implied guidance for Q4 and the whole year, afollow-up on Jason’s question, the RITA business drove the Angio port businessand there was growth of 20%. Did any organic Angio product lines see anysoftness in the quarter? And if you could tie that to what is the impliedacceleration in Q4?

That’s a difficult question to answer from the perspectiveof we are comparing to an extraordinary Q2 the prior fiscal year, so with thatin mind -- and by extraordinary, I mean that we had peak sales in Q2 in many ofour product lines for that fiscal year, so the -- but the standouts as far asthe softest side of the Angio business was the dialysis segment and the venoussegment. Both were working against, as I said, extremely difficult comps anddialysis we’re, as we said in our presentation, we are expecting to deal withthat by innovating, as we’ve done in the past, and venous we’re very pleased,actually, with the way the venous business is going and think that venous isgoing to have -- be at or above average growth, company growth in Q3 andthereafter.

And with respect to the implied growth rate in the guidance,it would work out arithmetically at the low end of the guidance, we would haveto grow 19% year-over-year pro forma in the second half of the year and at thehigh end, 25% in order to end in that $170 million to $175 million in total forthe full fiscal year. S

Our next question comes from the line of Jeffrey Cohen withJesup & Lamont. Please go ahead. Jeffrey Cohen - Jesup& Lamont : I just have two quick questions; first, can you run throughthe sales force breakdown as currently configured? And I guess the second shortquestion is do you have any comments regarding Sotradecol from the pastquarter?

I’ll take the Sotradecol aspect. Sotradecol had a verystrong quarter. It is still one of our fastest growing products and we continueto gain traction based on our educational programs of educating physicians onthe benefits of using the only FDA approved sodium Sotradecol sulfate, whichyou’ve heard before. So it was a very solid, solid quarter for Sotradecol andwe expect that trend to continue throughout the rest of the fiscal year andbeyond.

With regard to the sales force, the total sales organizationat the end of the fiscal quarter was 119 strong, and then within that, thenumber of quota carrying sales reps in the U.S. and Europe totaled 96. Jeffrey Cohen - Jesup& Lamont : And what was the break-up -- the breakdown between RITAproducts and the interventional?

The numbers in the oncology products group numbered 27 andthe interventional group in the U.S. numbered 61, and then eight others inEurope. Jeffrey Cohen - Jesup& Lamont : Thank you.

Our next question comes from the line of Brooks West withCraig-Hallum Capital. Please go ahead.

I actually had a question on sales force size that was justanswered. Can you comment, Joe, a little bit more on plans for growth of thesales force and where you are trending in terms of sales per rep and what somegoals might be there?

We’ll add a few more this fiscal year, not too many, and atthe moment, we don’t have any open spots but I’m sure we’ll be adding somelater in the year. In terms of the productivity level, this quarter we were atabout a $1.7 million per quota carrying rep level of sales on an annualizedbasis, so good productivity and it continues to step up nicely throughout theyear.

Great. Thank you.

Our next question comes from the line of Christopher Warrenwith Friedman, Billings, Ramsey. Please go ahead.

Thank you for taking the question. I just wanted to askabout the contract revenue opportunity. Did you see much incremental revenuefrom the [IVN] network and where are you as far as hiring that sort of tacticalteam?

Basically, we’re just getting started to push forward ournational accounts, or group purchase opportunities. As we stand right now,we’ve identified a vice president of the organization and he’s building theorganization around him right now. So we haven’t recognized much by way ofrevenues with the organization thus far.

Thank you so much. I appreciate it.

Our next question is from the line of Larry Haimovitch withHMTC. Please go ahead.

A couple of questions; one is can you give us a little morecolor on the performance of the oncology division? I’m thinking specifically ofgrowth rates of radio frequency ablation vis-à-vis the drug eluting beads, andI’ll come back with my second question when you answer that.

The drug eluting beads are really a star performer in theoncology segment and they are a relatively new product, so you would expectthey’d have a higher growth rate over the much more well-established radiofrequency ablation.

Any color? Is it growing 30, 40 -- would you give any coloron the actual growth rate of the drug eluting bead business?

Well, we don’t give specific product information forcompetitive reasons but having said that, it’s multiples above our corporateaverage growth rate.

Okay, and then on the Oncobionics, what are some of thetriggers for -- you talked about a $20 million payment, which has previouslybeen discussed. What are the key triggers that get you to a full milestonepayment or milestone payments, Eamomm?

Well, the $20 million is broken up into a $10 millionpayment followed by two $5 million payments that are time-based, so really theclosing of the acquisition happens after the milestone of a successful demonstrationin malignant prostate, so the malignant prostate study that we’re going to beconducting in Italy with a world-leading urologist who is completelyindependent of the development of IRE, is going to we anticipate trigger theclosing of the acquisition of Oncobionic. We pay $10 million and then over thenext 12 months, pay another $10 million, which is just simply time-based, sothe closing would be complete I would anticipate this fiscal year.

Our next question comes from the line of Greg Brash withSidoti & Company. Please go ahead. Gregory R. Brash -Sidoti & Company: I was curious, and I know you don’t like to break outindividual sales, what you’ve done in the past. Would you be willing to commenton the laser sales in the quarter?

Well, we really stopped giving detailed product performancebased on competitive issues. We were giving our competition really a tremendousamount of competitive advantage by telling them exactly how we did and hencewhy we are doing what we are doing. But lasers had a very strong quarter. They were up againstan extremely strong comp and that’s about the only unusual thing about Q2. Wewere pleased with how the laser box sales and laser consumables performedduring Q2 and expect that that trend is going to continue. NeverTouch, ourproduct that we introduced in Q1, is still performing really well, getting verysolid positive feedback from the clinicians who are using it and we’re pleasedall around with our venous sales performance. Gregory R. Brash -Sidoti & Company: Okay. Is it fair to assume that there was sequential growth?

There was indeed.

(Operator Instructions) Our next question is a follow-upquestion from the line of Jayson Bedford. Please go ahead. Jayson T. Bedford -Raymond James & Associates: Thanks, guys. I’ll just make it quick. First, Eamomm, youalluded when talking about the size of the oncology sales force to potentialnew product introductions in the oncology segment, outside of the IREtechnology, is there anything else we should look forward to? And then, just so I get it in, to Joe, in terms of theinterest income, it sounds like that hedge had an impact. I’m just wondering,does that hedge reverse in the third quarter? And then, just from an interestincome, what -- should we look at it as growing? I guess I’m just a littleunclear as to what’s happening with that line item on the P&L.

Well, as far as new products outside of IRE for the oncologysales force, we have a very full pipeline of new products that are associatedwith the radio frequency ablation area, both for in terms of additionalelectrodes and the box, adding features to the boxes for future generationmachines. In addition, we are very actively involved in thedevelopment of surgical, electro surgical devices that, along the lines of thevery successful HABIB Electrocautery systems and there are other things in thepipeline as well that we’re really not ready to talk about yet. But be that as it may, we are very committed to the oncologyspace and adding new products to the -- in the bag of the existing oncologysales force and also working up programs to expand the markets of the existingproducts and things we are looking at that are very potentially significant arelung RFA, getting a specific indication for that and a favorable reimbursementwould allow us to dramatically increase the market for our existing RFAproducts.

Our next question is a follow-up question from the line of GregBrash. Please go ahead. Gregory R. Brash -Sidoti & Company: I was just curious if you’ve been gaining any tractionselling some of the Angio products overseas, now that you have a sales forceover there.

Yeah, I think we’re definitely leveraging the sales force aswe continue to expand our global operations and that’s reflected in our salesnumbers, so definitely.

You know, we’ve got a ways to go that I think it’s stillearly with regard to integrating our -- getting full value out of our directsales force with regard to the Angio products. We are direct in the U.K.,Germany, and France and we have plans in various stages in those threecountries of execution, of leveraging that direct sales force to push the Europeansales of the AngioDynamics products forward.

The other thing I would comment on that is the actual proforma growth rate on the old U.S. business was actually about twice the rate ofgrowth in the domestic business, so we are in fact seeing very strong growththere, even before we get up to full speed in terms of ramping up our sales andmarketing activities in Europe. If I could also answer the question with regard to the hedgethat Jason brought up, we recognized $215,000 worth of expense in other expensebelow the operating profit line, which is the mark-to-market adjustment of thathedge to flow that through the balance sheet and that stems from the verysignificant drop in interest rates that occurred in our second quarter as partof the turmoil in the credit markets. And in the past few quarters, it had actually been a verysmall amount of either a gain or an expense and this quarter just happened tobe a very significant expense by virtue of the sharp drop in interest rates.And so we wouldn’t expect that to repeat just because it’s unlikely that therecould be a further precipitous decline in interest rates in the comingquarters, if you’ll accept our view of interest rate forecasting.

Our next question is a follow-up question from the line ofPhil Nalbone. Please go ahead.

Thank you. Eamomm, I’m interested in your thought on this --what do you think it’s going to take operationally for AngioDynamics to getback to a position where it can routinely exceed expectations? You had a coupleof sort of sloppy quarters around the time of the RITA acquisition. You’ve nowhad two very strong on-target quarters, but what needs to happen for us to seeshades of the old AngioDynamics, which was none for beating expectations on apretty consistent basis?

Well, it’s a fair question that I would say that we are wellon our way to doing that. We are very pleased with Q2 but our overall growth isnot back to, as you say, the old AngioDynamics. We think Q3 is going to, as Joepointed out, if we hit our guidance for the last half of the fiscal year in Q3and Q4, we’ll be back to growth rates that are much more in line with thehistorical growth rates that Angio enjoyed and put forward. So I think we are very close to being able to execute andhopefully exceed expectations routinely.

Great. Thanks, good luck in the new year.

Our next question is a follow-up question from the line ofBrooks West. Please go ahead.

Eamomm, specifically on the lung RF ablation, it was nice tosee you coming through that unscathed. You talk about going after a specificindication, which would be pretty nice. Any timeline on when you might try toapply for that and is that trial complete or nearing completion?

Well, that RAPTURE trial that we mentioned is completed andis going to be published shortly and we really can’t get into too much detailon that study due to our consideration for the authors of the study. But weare, as of today, considering the plans for going forward with the pursuit of aspecific lung indication and a favorable reimbursement. So it’s premature to begiving, putting a timeline on that but it’s definitely on our short-term radarscreen as far as being in a better position to give a timeline on it.

And would that give you the only indication for RF in lung?

That would.

Okay, great. Thank you.

Our next question is a follow-up question from the line ofJason Mills. Please go ahead.

A couple of quick questions here; Eamomm, we were keen tothe progress here of the Profile balloon. You said sort of in general terms itwas going well. That product, at least when you were -- before Bob came alongand prevented us from hearing all the good stuff in each division, it seems tohave been doing -- sorry, Bob -- about $1 million, $1.5 million a quarter. Iguess just generally speaking, what could Profiler mean to PTA catheter linesort of two or three years out? Are we talking about something that could be a$5 million, $6 million a quarter business? Maybe talk about the competitivelandscape there that may or may not allow that. And then secondly, gross margins were really strong thisquarter. My guess is it was partly driven by new product launches in additionto obviously acquiring RITA, but as we look forward, and I know you probably,Joe, aren’t ready to give 2009 fiscal gross margin guidance but my guess isalso that you want to continue to expand that. Sort of in general terms, whatsort of year-over-year margin expansion can we expect over the next couple ofyears on the gross margin line?

All right. Why don’t I let Bob talk to you about theProfiler opportunity first --

Why don’t you go first with the gross margin --

Okay. On the gross margin this past quarter, it was not somuch new product, actually and typically with a new product, we’ll see aramp-up as we work through the manufacturing process, if you will. So thisquarter, it really was primarily just sales mix and in the first quarter of theyear, the sales mix was less favorable and in this quarter, it was morefavorable. So that really primarily accounts for the improved margin thisquarter. If you look at our past, of course, we have historicallyimproved gross margins by about two percentage points every year and we think,at least the guidance we’ve offered is that we expect going forward to be ableto improve them at last one percentage point a year from the current levels.But we continue to work on all the aspects to improve margins from materialcost efficiencies to better manufacturing processes, and most importantly tojust the sales mix. And to the extent we invent our own product and build andsell that, there is a much better margin on that than one that we might beselling that somebody else would have created in the first place.

Well, thanks, Jason. I really thought we were beyond this inour relationship.

We are. I just dig up old bones.

No, I appreciate that. But specific to the Profiler, I cansay in general that we are very impressed with the growth that we experiencingand the market penetration that we are also experiencing alongside that growth.It’s an exciting product line and relative to your question, four and fiveyears out, you bet. We plan to be a major contender in this space and the waywe are going to do that is through continuous innovation. So within our R&Dpipeline, we plan to continually innovated on the Profiler line.

Should we expect an iteration this year, next year?

Probably not this year, but we are close.

Okay. Thanks, guys.

Ladies and gentlemen, there are no further questions at thistime. I would like to turn the conference back over to management for anyclosing remarks.

I’d like to thank you all today for your attention. Wecontinue to look forward to a successful fiscal 2008. Have a great evening andI look forward to speaking to you again at our next conference call.

Ladies and gentlemen, this concludes the AngioDynamicsconference call to review the second fiscal quarter financial results. ACTwould like to thank you for your participation. Have a pleasant day. You maynow disconnect.