Good afternoon, ladies and gentlemen and welcome to the Bio-Rad Laboratories' second quarter 2008 financial results conference call. (Operator Instructions). As a reminder, this conference is being record for replay purposes. I would now like to turn the presentation over to Ms. Tina Cuccia, Corporate Communications Manager. Please proceed.

Thank you very much. Before we begin the call, I would like to caution everyone that we will be making forward-looking statements about management's goals, plans and expectations. Because our actual results may differ materially from these plans and expectations, I encourage you to review our filings with the SEC, where we discuss in detail the risk factors in our business. The company does not intend to update any forward-looking statements made during the call today. That having been said, I would like to turn the call over to Mr. Norman Schwartz, President and Chief Executive Officer.

Good afternoon and thank you for joining us. We actually have a number of people out on vacation, or otherwise engaged this afternoon. So we have a thinner crowd than normal, and I have been elected, actually, to sit in for Christine. So today we are pleased to report the quarterly net sales were $452.4 million, an increase over 33% versus the same period last year sales of $339.1 million. The $113 million increase includes a little over $65 million contributed by the DiaMed acquisition as well approximately $27 million related to foreign currency. On a currency-neutral basis, year-over-year growth for the quarter was 25.4%. Currency-neutral organic growth, excluding the DiaMed acquisition for the second quarter was 6.6%. During the quarter, we had good growth across many of our key markets, including most of our diagnostic product lines and in life science from our protein and gene expression product line. Gross margins for the quarter were 54.9%, compared to 53.7% last quarter and 56.0% in the year ago period. Results for the current quarter include an improvement in life science gross margins from really good overhead control and better sales mix. While in diagnostics, margins have been impacted by the purchase accounting associated with the DiaMed acquisition, and by lower royalty revenue in connection with some of our HIV patents. SG&A expense for the second quarter was $146 .6 million, or 32.4% of sales, compared to $119 .6 million and 35.3% of sales last year. This result is a combination of strong sales growth coupled with cautious spending. Research and development expense for the quarter was inline with our expectations at $42.1 million or 9.3% of sales. While slightly lower than our historical average, and we anticipate remaining in this range for the remainder of the year. The growth in…

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

Hey, Norman.

Hi, Jon.

How are you?

Good.

Just a couple of knit-picky questions before general commentary. Was there an inventory step-up charge in the quarter?

Inventories did build in the current quarter, yes. It was not a step-up related to purchasing accounting.

Okay. So there was $1 million in the first quarter, but that did not recur in the second quarter?

That $1 million charge related to purchase accounting will continue for several quarters and that was in there. First I thought you might have been speaking of the balance sheet.

No, no. So there was a $1 million inventory step-up charge in the cost of goods sold, correct?

Correct.

Then on the other expense line, can you give us what interest income was? I mean it looks like there was a large gain. Was that a foreign exchange transaction gain in the quarter?

No. We have a couple of investments that declared dividends in the second quarter and then earn-out that we got. It is similar to the second quarter of the prior year and these are annual events, not quarterly events. So this happened for the one-time this year.

Okay. Can you give us the net impact there, approximately?

Approximately $4 million.

Okay. Then, what was the core Bio-Rad gross margin? You gave that out last quarter at 56.3. I might have missed it.

This is the gross margin for the first quarter.

Yes, just last quarter you provided the core Bio-Rad gross margin, which excluded DiaMed. Do you have that in front of you?

Let's see, it looks like a little over 56%.

Okay. Then, Norman, can you give us just an update on Bio-Plex, I mean the placement activity in the quarter, your progress on menu I do not know if John is there, but how are you tracking on the new test approvals for 2008?

John is actually on the line. John, are you there?

Yes, yes, I am. Yes Jon, I can give you a little bit of an update there. Our placements throughout '08 are pretty much on track with our placements from '07. The tests that we have in FDA now are two and we expect to have clearance of those later, I think, this quarter. So those were planned to come out about that time in '08. So we are pretty much tracking according to where we thought we would be at the beginning of the year.

Okay. I mean you had 10 placements in the first quarter. I am not sure what do you mean by on-track with '07'

Yes, Jon, I do not have those numbers right in front of me. In terms of how many placements we have made so far this year.

Okay. Are the placements you are seeing, is that primarily going to reference labs and large hospitals? Have you seen interest in the mid to smaller volume hospitals yet or are you still targeting primarily the high-end?

We are still targeting the high-end right now. We still have quite a bit of interest there.

Okay. Thank you. As a company, Norman, the direct material input inflation, has that crimped you at all this year, or have you been successful in offsetting that with price increases?

There are some particular areas that we have seen some spikes in general with the higher transportation costs and things that have a petroleum-based. We have seen an updraft in costs. We have put through some selective price increases to offset that, and we feel we are in pretty good shape for the moment. However, this is going to be a moving target for us.

Okay. I mean if you had to estimate, are you net positive for this year, or more neutral, net pricing increase less inflation?

I do not really have a good number on that. I would hope that we are net neutral.

Okay. Thanks a lot.

It is obviously something we are going to continue to watch very closely.

Your next question comes from the line of Vito Menza of Sandler Capital Management.

Hey, Norm, how is it going?

Good.

Nice quarter you put up.

Thank you.

A couple of knit-picky questions for you. You disclosed there was $1 million of purchase accounting in the COGS line. I am just wondering if you can help with the intangible amortization. I think there was $3.5 million in the gross profit line in Q1 and I think there was $2.3 million in the SG&A line, just wondering if those numbers are the same for Q2?

Yes. This is Jim Stark, I am the Corporate Controller for Bio-Rad. There is about $3.5 million in the cost of goods sold line, $1 million related to this stepped up value in inventory and about $2.5 million rounded for amortization of intangibles.

Okay, Great. In the SG&A line, is it about $2.5 million for intangible amortization?

Yes probably, just to shade lower, but in that same area.

Great. So all in all, there is about $6 million of non-cash intangible amortization/inventory step-up expenses in the quarter related to DiaMed?

Yes, that is a good estimate.

The estimate is maybe $10 million for the full-year when it comes to integration expenses? Is that correct?

I would go lower than that, more like $6 million.

Great. Did you get the placements the Bio-Plex's where they stood at quarter-end?

No, we have got about 70 units installed.

70 units installed. Great. Thank you. I appreciate it.

(Operator Instructions) Your next question comes from the line of Charles Haas, Private.

Hi, thanks for taking my questions. My first question is if you have selected your ERP system yet? I know you have been evaluating that for a while.

No, we are still in the process of evaluating that.

When do you expect to have a decision made?

I would hope sometime in the third quarter, we would be getting close on that.

Okay. My next question was regarding the AACC meeting I wonder if you could give us your assessment on the success that you think you had there, Norman, relative to past years, customer feedback, any color you could give us would be helpful.

Yes. It seemed like a pretty good show, pretty good venue. My view was that may be the booth traffic was or the show traffic was maybe a little bit slower. However, John, if you are only the line you have got another perspective?

Yes. I was there for the entire event, and I felt that the traffic through our booth during this past show was exceptional. We had a very interesting promotion going on in the booth at the time. We had set up a laboratory right in the booth to test people's A1c value who were coming into the booth. That was quite an interesting draw. So people were actually able to come in and get a little card and with that card, that entitled them to get a blood test on the spot. We were doing that test with our small in2it point-of-care device and before they were able to get their blood test they had of course visit several other sections of the booth. That really promoted I think quite a bit of interaction with those who did go through the booth.

Okay. How about translation to orders this year? Did you find that you had a similar close ratio to past years, or was this just more of a general fact-finding conference for your customers, or if you could characterize that relative to past years?

Well, these all become leads and then they have to be qualified, so there is really no connection as of this moment to traffic to closes and that will be something that we will be looking at and tracking over the course of the next several months as our sales representatives get these leads and then follow-up with them.

Okay. My last question is regarding the decision-making on purchases from hospitals; there has been lots of volatility in the hospital market with auction rate securities and the credit markets and things like that. I am wondering if you could characterize the status, if you give us some trends that you are seeing in the hospital market on capital purchases of your equipment.

Really, I do not see any change in activity level or decision making from last year. It seems that most of our customers either are unaffected by that, or it does not influence their buying decisions. As you probably know, most of our placements are reagent rental, so capital purchase decision is not always necessarily in front of them.

Okay, so the sales process is not lengthening in your mind right now?

I do not think so.

Okay. Thanks.

Your next question comes from the line of Juliana Tuxedo of Select Equity Group.

This is Chris Arndt instead of Juliana, in Select Equity Group. Norman, I have a quick question on operating margin in the quarter was particularly good, I thought and a sequential improvement from the first quarter. Was there any unusual licensing revenue that favorably benefited the operating margin or production in SG&A expense?

No. I think it is just a combination of both good sales growth and expense control. I think just widens that margin.

Yes. Historically at least the last two years, the operating margins in the first half of the year have been higher than the second half of the year. Is there a seasonal pattern to that, or was that just coincidence in the last two years? In other words, just the second quarter margin, could we expect something similar to that if not may be, quite as high in the third quarter and fourth quarters?

In the last few years, it has tended to some seasonality, and I think that is caused by an annual budgeting cycle and the operating groups get started at the beginning of the year and get the program started. The expenses accumulate in the third and fourth quarters, so the third and fourth quarters tend to be a little less profitable than the first half.

Okay. Would you expect the same seasonal pattern this year, the margin improvement relative to the second quarter a year ago was particularly strong this quarter? Should we at least expect that year-over-year in the third and fourth quarters of this year margins will continue to be up?

We are hoping so.

Okay. Well, that is good, and congratulations on the strong results in the second quarter.

Okay, thank you.

Your next question is a follow-up question from the line of Jon Wood of Banc of America Securities.

Hey, a couple more. You talked about capital equipment was down in life sciences, Norman. Can you give us a sense how big is the capital equipment portion of that business?

Brad Crutchfield is here and maybe he can answer that. He runs Life Science.

Hey, Jon. This is Brad. It is really in terms of the business affected, it is probably less than 25% of our business that is impacted, but it is relatively big dollars, specifically around some of our Bio-Plex instruments, the life science version and our new protein interaction instrument which sells for near $0.25 million.

Okay, and then on the DiaMed purchasing out the remaining minority shareholders there, I think you said on your last call you were going to do that in 3Q. Just give us an update there when you conduct that tender as well as remind us of the outlay there?

Yes, sometime in October is the due date for that and it is in the range of $60 million to $70 million.

Is that incremental, Norman? I know you did 17 in the first quarter, so $60 million to $70 million incremental?

Yes.

Okay, okay very good. Thank you.

Your next question comes from the line of Jeff Matthews of Ram Partners.

Hello.

Hi, Jeff.

How you are doing?

Good.

I wondered what the acquisition market is like for you these days. Private equity does not have access to much capital right now, but I wondered if the seller prices have come down at all.

They do not seem to have come down very much and there does not seem to be a lot of interesting stuff floating around either. There are one or two mega deals but otherwise there is not a lot.

Okay.

You have no questions at this time. I will now turn the call back over to management for closing remarks.

Okay. Well, we thank you all very much for joining us today and welcome you to tune in again next time. Thank you.

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