Good afternoon, ladies and gentlemen, and welcome to the Bio-Rad Laboratories second quarter 2009 financial results conference call. I will now turn the presentation over to Mr. Ron Hutton, Bio-Rad Laboratories’ Treasurer. Please proceed, sir.

Thank you, Steve. 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. With that, I would like to turn the call over to Christine Tsingos, Vice President and Chief Financial Officer.

Thanks, Ron. Good afternoon, everyone; and thank you for joining us. Today, we are pleased to report quarterly net sales of $427.2 million, a decrease of 5.6% on a reported basis versus the same period last year sales of $452.4 million. However, on a currency neutral basis, year-over-year sales grew 3.5%. During the quarter, we had good growth across many of our key Diagnostic markets, as well as selected markets in Life Science. The reported gross margin for the second quarter was stronger than expected at 56.6%, compared to 57.1% last quarter and 54.9% in the year-ago period. This strong margin reflects the continued shift in product mix toward higher margin consumables, as well as improved manufacturing efficiencies. Additionally, the non-cash purchase accounting expense recorded in cost of goods sold related to the DiaMed acquisition was $3.5 million, a decrease of approximately $1.3 million from last year. SG&A expenses for the quarter were $143.7 million or 33.6% of sales, which is somewhat lower compared to the year-ago dollars, but higher in margin, reflecting the currency impacted sales number. The sequential margin improvement versus the first quarter is primarily related to focused cost and headcount management. The current quarter SG&A expenses include $2 million for amortization of intangibles related to DiaMed. Remember that historical trends consistently reflect lower SG&A spend in the first half of the year, and thus we anticipate these expenses to ramp throughout the remainder of the year. Research and development expense in Q2 was 9.9% of sales or $42.4 million, compared to $37 million in the first quarter and basically flat with last year. The sequential increase in R&D spend is primarily related to costs associated with the development of our new automated blood typing system. We expect R&D spend to be at the high 9% of…

(Operator instructions) Your first question comes from the line of Larry Solow of CJS Securities. Please proceed. Larry Solow – CJS Securities: Hi, good afternoon. Christine, could you talk a little bit about trends you are seeing in the life sciences market and stimulus funds, I know they are not there yet but are they knocking on the door or how is that playing itself out?

Larry Solow – CJS Securities: And is there any way – I know you guys have spoken in the past that perhaps it was sort of the anti-stimulus, where customers were actually holding grant money they had. So now that there is security in the stimulus, is there anyway you could – I don't know if you can quantify what you would potentially see, but would there potentially be a pent-up demand, where actually giving a revenue, you got a nice little pop or bonus over the next couple of quarters?

Well, yes, this is Brad again. Yes, there certainly – we expect to see some upside, but it is also countered by the downside of potentially state governments pull back funding for state universities. So there is always – there is sort of that pull of both of those. And again, we are talking about only primarily the U.S. market and 50% of our business in Life Science is outside the United States. So it is going to – we haven't been able to quantify specifically, but we are optimistic that it is going to have a positive impact on sales going forward. Larry Solow – CJS Securities: And have you mentioned – are there similar programs, I know Europe is also – you mentioned the (inaudible) life sciences. Are there similar type of stimulates, money or talk on the table at least of helping out in European countries?

Yes, there is a program in Germany, and that has had some impact in Germany, much smaller in magnitude to the federal stimulus plan in the U.S. China has been looking to invest and investing in their life science sector for a number of years, but even sort of accelerated this year and we are seeing that in terms of double-digit sales growth. And even Japan now is looking at a stimulus plan for later this year for their internal biotech market. But then, there are large parts of Europe and in Eastern Europe, have really been impacted by the financial crisis as well. So it is kind of a mixed bag. Larry Solow – CJS Securities: Right. And Brad, you probably can answer this one. And any, I know that you just kind of launched your e-commerce site. So any – it is obviously early, but any anecdotal customers' commentaries, any feedback you are getting on it?

Well, the feedback has been overwhelmingly positive. We have a really nice website, we are seeing a lot more traffic, and even some early trend up in the sales. It has really only been live now for about two months. But really very, very positive. I am very happy with the team's performance in terms of really designing a website that speaks directly to our customers. Larry Solow – CJS Securities: And then on the BioPlex system on the Clinical Diagnostics side, Christine perhaps. Could you just remind us how many – I guess you should have nine tests by year end and that is 33 assays, is that correct?

Panels. We did talk about that that we were targeting that and John Goetz, who runs all the diagnostics is with us today as well. So I will let him comment on the progress that we are making there.

Yes. We have right now seven launch panels on the system today and largely those are being sold in the U.S. We have a certain number of our instrument placements outside the U.S. and Europe and that is looking to start to pick up as we add more panels. Larry Solow – CJS Securities: Okay. And then anyway like say, I know it is tough to quantify but can I assume that two or three years from now this number could double or is it a kind of a longer process as you start getting deeper into the panel development?

Yes, we are into probably a time frame in this area that probably over that timeframe you could see it doubling. I don't see more than that three-year timeframe. Larry Solow – CJS Securities: Okay, great. All right. Great, we look forward to seeing you guys at our conference a couple of weeks and thanks a lot.

Thank you.

Your next question comes from the line of Stephen Simpson of Northland Securities. Please proceed. Stephen Simpson – Northland Securities: Thanks. I just wanted to confirm or make sure I heard correctly on what you were talking about for margins for the remainder of the year. You said operating margins in the low-double digits for the back half of the year, and did you comment on gross margins as well?

54% to 55%. Stephen Simpson – Northland Securities: All right, thank you. And just going back to the BioPlex. Is it possible for you guys to quantify what sort of contribution it made to the Clinical Diagnostics business this quarter?

Well, we don't give out specific numbers, Stephen, but remember this is actually a significant drag on operating income for the segment and the company obviously as a whole, as we are putting significant dollars in R&D to develop the future panels that John was speaking about earlier. Stephen Simpson – Northland Securities: I know that, I figured it was worth a try. Thanks a lot.

Your next question comes from the line of John Wood of Bank of America-Merrill Lynch. Please proceed. John Wood – Bank of America-Merrill Lynch: Hey. So, one for Brad. Process chromatography, I know that has been – two quarters have been kind of some fluctuations there. Did that have any impact on the Life Science business this quarter, in terms of comparison?

Yes, it still hurts just a little bit. It is really a year-over-year comparison. We haven’t picked up at the U.S., but it was – a lot of our sales that are calendarized later in the year in Europe. So it is kind of a mixed bag yet. But overall, like we said before, we have got to look at this business over several years, as the business ultimately is trending up. John Wood – Bank of America-Merrill Lynch: Okay, but it was still a drag in the second quarter year-over-year.

Yes. John Wood – Bank of America-Merrill Lynch: And then what about capital equipment, Brad? Can you give us a sense of – did the growth, the constant currency growth in the capital equipment, did it deteriorate or improve meaningfully from the first quarter of 2009 sequentially?

Actually, it did probably a little bit better compared to the first quarter. It still tends to be down as we see capital spending down, even from our (inaudible) customers, but what we do is the prospects primarily in the U.S. looking up as the federal stimulus plan begins to take hold. But overall, I was actually encouraged in terms of the prospect and even from the placements of our capital instruments in the second quarter compared to the first. John Wood – Bank of America-Merrill Lynch:

For us, it was relatively minor. We certainly participated in providing some instruments and placements in Latin America, but certainly compared to other companies, we enjoyed a very nice upside in primarily the real-time PCR assay instruments and platforms. It really did not have an impact on our business. John Wood – Bank of America-Merrill Lynch: Okay. And how about for John, for the Clinical Diagnostic business, anything, any elevated trends there?

There is nothing there to report. We have a couple of minor products that cover that aspect of the flu, but nothing for this particular strain today. So it is really – pretty much a non-issue on the reagent side of the business.

And these products are sold outside the United States.

That is correct. John Wood – Bank of America-Merrill Lynch:

Yes, there is a small one. I think it is about $500,000 or $600,000 – it is about $600,000. John Wood – Bank of America-Merrill Lynch: Okay. And the cash flow is running quite a bit ahead of the first half of 2008 at this point. Is there – can you give us a commitment for a higher cash flow number this year, year-over-year?

I probably am not going to want to try and estimate what that will be, because it is sensitive to the results of the business itself. And currency can have an impact on it. Suffice to say, we have a focus on cash flow this year as a company and wanting to improve cash flow as a percent of sales. So hopefully, some of the improvement that we are all seeing is the result of that. John Wood – Bank of America-Merrill Lynch: Okay. The R&D, you said high 9%, so you are looking somewhere around $44 million, $45 million on a quarterly basis. Is that a level we should expect to continue in 2010?

You know, I don't want to try and predict 2010 right now. I think a couple of things that are going on with R&D as a percent of sales. One is, we truly are investing in some really exciting new products like the IH-1000 for blood typing. At the same time, as the top line is impacted by currency, and much of the R&D spend is in the United States, that spent as a percentage of those currency impact of dollars is naturally going to a margin up a little bit as well. But our long-term goal, if you remember, is R&D spend in that 9% to 10% and I don't have any reason to think that that will change. John Wood – Bank of America-Merrill Lynch: But, as far as continuing investments in the IH-1000 left projects that may be rolling off, it is probably reasonable to assume some sort of a constant dollar rate equal to the second half of the year next year. I mean, anything you know of that would bring it back down, if you will, towards the lower 9s, percent of sales?

Now, it seems like we have new things to invest in, even when something rolls off. So I don't think that is unreasonable. John Wood – Bank of America-Merrill Lynch: Okay. And then, I am not sure if Norman is there, but just and you grazed [ph] the money here. Any updated thoughts on the general M&A environment, is it better from a perspective or still pretty much of a stalemate out there?

Actually, there are a few things that are starting to show up. I think it is still a little bit on the slow side, but a quite a few things are popping up. So we are encouraged. John Wood – Bank of America-Merrill Lynch: And we should assume kind of a typical Bio-Rad target out there, nothing too interesting, but along the same lines as you have done in the past?

Well, we think of area – but yes, I would say nothing transformational. Is that what you mean? John Wood – Bank of America-Merrill Lynch: That is what I meant, but I also meant, you do like, typically (inaudible) in your acquisitions. So, just wondering if we should expect that. Okay.

We just don't want to (inaudible) for the value we are going to be creating there. So –

Your next question comes from the line of Junaid Husain of Soleil Securities. Please proceed. Junaid Husain – Soleil Securities: Good afternoon, everyone. John or Brad, relative to the spending environment at the hospitals or maybe your academic or industrial customers, when you talk to yourselves, guys, what is the sense that you are getting? Or institutions slowly starting to loosen up the spending purse string?

This is Brad. I will take that first question. Yes, we certainly are starting to see a trend. One kind of business is usual in terms of our customers getting out of that stimulus which we saw really through probably the first five months of the year, as this NIH funding process was rolled out and actually run by our customers out there but by our customers. But overall, we're starting to see that look, our sales reps are starting to see the prospects going forward, look positive. And there were certain parts of the world, China, Germany are examples. We see the same kinds of upsides and then that to other parts of maybe northern Europe, where it is still a little bit slower. And our pharmaceutical customers, we are starting to see it again a little bit more of a positive outlook for them, especially in the area of capital spending.

In the testing segment, we see a continual increase in testing in general. It is something dramatic, but it's certainly not going backwards, which has been very, very encouraging for us. I suppose on the hospital and the testing reference – testing side, there will be some concern about what the healthcare legislation will mean for them. We're not exactly sure what it will mean for us either, but we are trying to keep an eye on that. Junaid Husain – Soleil Securities: Got you. That is helpful. And John, seems I have you. On the diagnostics side, I do recognize that this is a reagent rental versus a straight-up cash sale, but could you tell me if hospital customers are maybe looking for better terms on the reagent rental business?

They are always looking for better terms on whatever deal we may be offering. With regard to reagent rental, we have some fairly strict internal pricing guidelines that help guide those kinds of discussions and we tend not to go beyond our internal limits on profitability. Junaid Husain – Soleil Securities: Got you. And then, another high-level question for both of you guys, regarding customer ordering patterns. Obviously, given the challenging economy, some of your customers might have been looking to get leaner and meaner over the last 6 to 9 months and maybe bringing down their inventory levels on certain products. So, I guess, two questions for you. Did you notice this inventory adjustment at your customer sites, and then, as a follow-up to that, did you get the sense that this inventory adjustment is reversing?

For our businesses, we really don't see kind of a – people by rent inventoried up or de-inventorying. It is just not the nature of our customers. Junaid Husain – Soleil Securities: Got you. And then, Christine, I have got a few offs and ends here. Can you tell me what the DSOs were in the quarter? And how those compare to the previous quarter and maybe compared to the previous year?

Sure, the way we calculate them, DSO was around 70 days and it was a bit of an improvement for us, both sequentially and year-over-year. No?

Sequentially, yes; year-over-year, we are still (inaudible).

Okay. We had two days off from last year. Junaid Husain – Soleil Securities: Got you. And is there any – what is the geographic credibility on DSOs, U.S. versus international?

Huge variability, which is very typical of regions. I mean, for any industry, any company, DSOs tend to be longer in certain parts of the world. So in the US, our DSOs generally run in the 45-day range, you can get to places in Europe or in Japan and you are in 90 to 100 and somewhat days range, 180 day range. So that is why, for us as a company average, that 70 to 75 day range depending on our sales mix in any given quarter, is not unusual for us, because so much more sales are outside the United States. Junaid Husain – Soleil Securities: Got you. That is helpful. And last question, either for Norman or even John because I mention it's high-level, with regards to healthcare reform, sorry to lob in obligatory healthcare reform, this year or not from the kind of that you have seen in and the chatter that you have heard from your customers and your policy guys, what are your thoughts on how this potential legislation could impact your business moving forward.

It could go either way. It could mean cost containment or if there really are going to be 50 million or hundred million new people in the health-care system, it could be a pretty good time. Junaid Husain – Soleil Securities: Fair enough. Thanks, guys. That is all I have got.

Your next question comes from the line of Dan Leonard of First Analysis. Please proceed, sir. Dan Leonard – First Analysis: Hi, good afternoon. I only have two questions. First one for Brad. Brad, is there any change in the growth trajectory of your BioPlex products in the research market?

No, not really. If you look over the last year, it is fairly stable in terms of the number of – in the number of placements of instruments has slowed off and that is more of a capital impact, but overall, the trend has been pretty good. Dan Leonard – First Analysis: Okay. And then my second question, it is for you, Christine. How much of an impact, if any, has the increase in inventory had on your gross margin improvement? Because I have noticed that your inventory turns have declined for the past couple of quarters as your gross margin has gone up.

Inventory rate I think is actually down, flat to down year-over-year and we talked about growing inventory as we move into the second half of the year, which is different, than we are going with this, but beside anticipating some of the stimulus spend. But the other thing that can impact our inventory is in the quality control business, where we tend to build significant multi-year lots on behalf of our customers and hold that on their behalf. But I think that the general trend this year is that inventory has been down. Dan Leonard – First Analysis: Well, inventory is down, but costs are also down. So your days on hand have actually gone up. So I was curious if that has –

Well, yes. But again, that also could be due to the mix of the inventory and one of the places where we have building inventory is in our quality control, because of some customer sales. And that inventory, may be turns in once a year because of holding these multi-year lots. Dan Leonard – First Analysis: Okay. So nothing that you would draw attention to or nothing worthwhile as far as –

I don't think so. Dan Leonard – First Analysis: Thank you.

(Operator instructions) We have a follow-up question from the line of Larry Solow of CJS Securities. Larry Solow – CJS Securities: Hi. To the punch line on the healthcare reform question. The idea of implementing company-wide ERP system. Any updates to that of any thoughts about that?

We are still in the throws of that, evaluating what we do and how we do it. Larry Solow – CJS Securities: Okay, any potential timeline or mix, is there something about it?

Sure. I think later this year, we ought to have something for you. Larry Solow – CJS Securities: Okay, and then just a housekeeping question. Christine, could you just repeat those – the segment revenue between life sciences and clinical diagnostics again?

Sure. Life sciences reported sales for the quarter were $149.7 million, that is about a 7.5% decline, but flat currency neutral. Diagnostics $274.3 million. Larry Solow – CJS Securities: $274.3 million. Great, thank you very much.

There are no further questions in the queue. I would like to turn the call back over to the management for closing remarks.

Okay. Thank you everyone for taking the time to join us today and your interest in Bio-Rad. As always, Norman and I are available for any follow-up questions you may have. Bye.

Thank you for your participation in today’s call. This concludes the presentation and you may now disconnect. Good day.