Good morning, everyone, and welcome to the IDEXX Laboratories' First Quarter 2014 Earnings Conference Call. As a reminder, today's conference is being recorded. Participating in the call this morning are Jon Ayers, Chief Executive Officer; Brian McKeon, Chief Financial Office, and Ed Garber, Director, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that statements that members of IDEXX management may make on this call regarding IDEXX's future expectations, plans and prospects constitute forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as expects, may, anticipates, intends, would, will, plans, believes, estimates, should, and similar words and expressions. Such statements include, but are not limited to statements regarding management's expectations for financial results for future periods. Investors should be aware that any forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those discussed here today. These risk factors are explained in detail in the Company's filings with the Securities and Exchange Commission. Please refer to these filings for a more detailed discussion of forward-looking statements and the risks and uncertainties of such statements. All forward-looking statements are made as of today and except as required by law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Also during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles, or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in our earnings release, which can be found on our website at www.idexx.com. Finally, we plan to end today's call by 9.30 a.m. Eastern. In order to allow broad participation in the Q&A, we ask that each participant limit his or her questions to one with one follow-up as necessary. We do appreciate you may have additional questions, so please feel free to get back into the queue, and if time permits, we'll be more than happy to take your additional question. I would now like to turn the conference over to Brian McKeon.

Good morning, and thanks to everyone for joining us today in our call. I'm pleased to take you through our Q1 results in the strong momentum we're building in our business. In today's review of our Q1 2014, results I'll be referring to growth rates in the quarter, and let's otherwise noted these growth rates refer to Q1 2014, performance compared to Q1 2013 performance. In terms of key things you could take away from today's review, we continue to accelerate our revenue growth driven by global expansion of our CAG franchise. Organic revenue growth was 8% in Q1, at the high end of our expectations driven by 10.4% growth in global CAG Diagnostic Referring, normalized or changes in distributor inventory levels. Our focus on innovation and clear benefits from our investments in our commercial capability globally is driving very strong instrument placements. Worldwide Catalyst and Haematology placements increased 36% and 22% respectively year-on-year in Q1, and we sold over 1200 SNAP pros in the quarter, positioning us well for strong continued CAG annuity growth. Our results reflect solid growth across regions as we continue to expand our international presence. Overall our international revenues increased 13% in Q1, including a 1% benefit from acquisitions. Growth was driven by 13% organic gains in CAG recurring diagnostic revenues and solid growth in our LPD business. Finally we're delivering solid profit results reflected in our Q1 EPS growth of 10% to $0.89 per share. This performance is on track with our full year goals as we support investment towards our long term growth potential. Based on our solid start to the year and the growth trends we've established in our recurring revenue streams, we’re increasing our full year outlook for organic revenue growth for 2014, to 8% to 9%, versus our prior guidance…

Okay, thank you, Brian. As Brian elucidated we have strong performance in the quarter. In revenues, earnings and the key metrics such as instrument placements and the percent that go to accounts that are either competitive or new to IDEXX and thus expand our install base. All these indicate, I think the health of the business I and the sustainability of our model for growing our markets. This growth and success were in virtually all regions of the world. The result of our Companion Animal Group in North America reflected the success of our sales transformation completed in Q3 of last year. This is the second full quarter of strong performance since having come through the learning period. Validating the new sales model, the key metrics are consistent with Q4 2013, for Veterinary Diagnostic Consults and 98% territory occupancy rate and a 60% increase in number of in-person customer visits over Q1 of 2013, the last quarter we were still fully in the old sales model. Customer acquisition for tension and utilization were also strong. Our new compensation plan implemented this Q1, that in part were work professionals for growing or recurring diagnostic revenue in their territory as well as instrument placements was also a great success. We believe we have now created a strong foundation for a North America CAG sales and marketing organization that we can readily scale as our revenues grow. Internationally we also had strong performance in all of our major country markets. In many markets where we have a direct sales organization we're able to make investments that generate sustained revenue growth through instrument placements, new lab business and growth in veterinary practice usage of our diagnostics. For illustration purposes let me give you some Q1 year-over-year organic growth of our CAG business in some…

(Operator Instructions) we will go to the line of Ryan Daniels with William Blair. Please go ahead.

Good morning guys, thanks for taking my questions. I guess Jon the first one for you on the sales force, given the transformation and the changing compensation. I'm curios if you can offer any color on, perhaps any surprises you've seen. Meaning are you seeing customer show proclivity to be more receptive to you know growth in one modality versus another or your seeing, cross on some opportunities to gain share using your in the point of care versus reference lab, just on anything there that's [indiscernible]

Sure, well of course you know we do believe we have a significant cost selling opportunity. I remind investors that if you look at our customers for in-house chemistry and our customers for the reference lab, there's only actually 40% overlap. So it's a very-very significant cost selling opportunity and we thought that was one of the key reasons for the transformation and a single point and contact with customers and of course we're able to better achieve that with a 60% growth in the number of visits. I would say you know the one thing that is continually reinforced to us is the value of real time care. As you know Ryan, our offering and it's ability to generate results in eight minutes easily, full comprehensive chemistry and a hematology profile, [indiscernible] will be added with Catalyst 1 and Catalyst Dx in coming quarters. That customers are now more and more realizing that they get greater compliance when they have the results in front of them and they're able to speak face to face in the moment, in context with the pet owner and greater compliance not only to you know whatever the treatment plan may be, but it's also greater compliance as any suggested follow-on testing which may go to reference lab. Which is why we say testing begets testing. So we believe and I think if you look at the kind of the general trend, we're seeing a growth in the in-house modality which is growing overall, a diagnostics modality that we are driving because of real time care and more and more customers are, you know I speak to customers at conferences, they readily say [ph] I just, you know really working for us. And our reps are very-very good at bringing that insight to customers, now that they are really representing the customer in all of our diagnostic modalities.

Okay very helpful and then it’s my follow-up. Jon, I now you choose your words carefully and I think a minute ago you just mentioned inability to sustain double-digit organic growth. So, you think about your growth blueprint. I know you are not far from that in your guidance this year but as that a few years out it’s kind of a three- to five-year goal. Is there any more color that are pretty important change in tone?some of the payers try to maybe ease up a little bit on some of the restrictions here and can just be a tailwinds. For U.S. we think about the balance in 2014 relative to 2013.

Well. I don’t think we’re putting a time frame on that goal. Our organic growth goal this year is 8% to 9%. Obviously, we’re higher organic growth in the Companion Animal business, which I believe is on the order of 85% of our revenues. Our overall organic growth for the company is brought down a little bit by the other 15% of the revenues that are generally just a little bit lower organic growth and of course we’ve had the LPD, which has been actually had a good quarter but generally flat is slightly down as we worked through some of these eradication programs, but we are seeing the trajectory to acceleration and our goal is to accelerate at organic growth to the double digit level and at 8% to 9% we are not that far away from it.

Right. Okay, thanks guys. Nice talking to you.

Thank you. Next we go to line of Nicholas Jansen with Raymond James. Please go ahead. Nicholas Jansen - Raymond James & Associates: Hi guys. Thinking about the international expense you’re kind of announcing right now, what change to you maybe 6 months ago, 12 months ago surrounding your expectations to bigger investment? Here I’m wondering what happened this quarter that make you comfortable enough to make the switch?

I think a number of things that came together. We have really good – we put in some excellent leadership with Michael Williams and we got really strong country management leadership. That combined with the fact that our modalities and our offerings are improving, as Brian mentioned the [indiscernible]extract with the [indiscernible]is really starting to penetrate the continental European market. Obviously, we have the prospects of Catalyst One. If we think Catalyst One is the excessive product in North America, our European guys said “well, we thought developed Catalyst One for us because it’s so perfect” and [indiscernible] for our markets. And of course that will be a 2015 opportunity as we rolled out that out. And then of course we’re rolling out the diagnostic IT ecosystem with VetConnect PLUS. So, we just see the confluence of both and the markets are responding. I wouldn’t say Europe is doing particularly well economy-wise although did have a weather quarter than the U.S. did. But look at the growth we’re achieving but not only in Europe. Look at the growth we’re achieving in Asia and we just of course went direct in Brazil with the acquisition of one of our distributors at Madasa. So, we just the opportunity there. We’re seeing a [indiscernible]. We have the confidence, we have the leadership, we have the portfolio and so we take a time to accelerate that investment . Like I just said when you had good leadership it tends to identify more opportunities and the momentum build on itself and I think it’s reinforcing whatever business we have globally and we’re seeing more opportunity and we want to invest behind that because we think it’s going to be aid to our accelerated growth trend and will be a great return for us. Nicholas Jansen - Raymond James & Associates: Right . And then maybe on the Noble Pro , the 1200 sign-ups that you had so far in the first quarter, but can you give a [indiscernible] 3:41 flavour in terms of other existing customers on SNAP [indiscernible] about the characteristics of the customers you had thus far.

Yeah those are - though of course the target not be existing customers of SNAP because the vast majority of the North American Veterinary practices are customers of our SNAP. Line is fairly [indiscernible]. I’ll tell you what we’re seeing is they really appreciate, they basically load and walk away. I think SNAP, it’s a very – that the workflow is just very, very beneficial for practices that are busy and they neither text every second. [indiscernible] like to think kind of benefit in workloads we brought with the in-house instruments on Catalyst and laser side and pro side on the hematology side, now the big improvement in workflow for the test kit modality in general. In fact, what we are seeing is the average practice. The average practice is buying two, not just one but two because they need them for all kind of volumes. So obviously that’s a mix. Some practices are buying more and another practices are buying one. But we’re just seeing really, really positive customer response. Obviously, we’re very early but it’s nice to see those. That’s 1200 is [indiscernible] the feedback from the customers has just been universally very, very excited.

Thank you. And as a reminder if you have any questions or comments you may press * and then 1. And we’ll go to the line of Kevin Alex [ph] with Piper Jaffray. Your line is open. Kevin Alex - Piper Jaffray & Co.: Good morning. Thanks for taking the questions. First off, you’ve mentioned weather a couple of times and also in U.S. it seems like seasonality. We’re getting off to [indiscernible] and hard warm season. What sort of impact do you think that had on testing and I think you mentioned the patient visits were off 1.2% in Q1. Have you seen any sort of improvement since then?

Yeah. Thank you for the question . Just give you a little context. That’s a pretty big drop as we look at what patient visits will do quarter before or last five or six years, even during the great recession. 1.2% a decline – this is a fairly robust market. So, we don’t see that. We only see it – I only like to see like one or two other quarters in the last five or six years and clearly it was regional as we’re looking the regional thing. With 1000 practices you can get some fairly good granularity on originality of that. So, that just gives us some indication. I don’t think in diagnostic testing that in general you may get lot, although those visits are lots. I don’t know about other categories. I can only speak about our category. And so we expect there to be good demand. We think that decline is transitory. The 2% we saw in patient visits and the 5.5% in revenue growth with the clinical level for tech care services with our base of 4000 customers we saw on 2013 we think it’s more the sustainable rate, but I don’t think beyond that we’ll make up any of the loss on the diagnostic category in the second quarter. Kevin Alex - Piper Jaffray & Co.: Got it. And what the informatics you have, did you notice any kind of delay or drop in diagnostic testing especially in the South as I think hardware season got off to a late start?

Brian mentioned that rapid assay was a little bit a down again. We think that’s kind of a weather transitory issue and a chunk of our rapid assay testing is parasitic disease which includes hardware testing and the purpose there is obviously you want to test before you put them on a preventative, kind of a co-indicator if you will. I guess it’s the only thing I would say on that. Kevin Alex - Piper Jaffray & Co.: Yeah. Hardware [indiscernible] I would say that bigger impact as Jon highlighted was kind of a consistent weather impact in the year that you would expect see it just given the unusual conditions this winter. So, I think this was definitely more of a transitory planning and we would anticipate getting back to [indiscernible] that you saw last year.

Yeah . Good point. My people really came at the transitory impact on the patient visit day [indiscernible] that were reporting obviously were very, very pleased with our performance. And I’m not going to put weather it’s – I think it was very strong performance for the quarter when you [indiscernible] everything in and I’m not thinking any weather component there. Kevin Alex - Piper Jaffray & Co.: My second question is one Catalyst One. On your prepared comments you mentioned that it’s the right product because [indiscernible] don’t use Catalyst now. Can you give us an idea of how big that [indiscernible] market is and what sort of penetration we should expect overtime?

Well customers who don’t use Catalyst today they use it by-product back to 50%. So, it’s a ____ addressable market and that is it’s the U.S. or North America number and that doesn’t even include international. Obviously, we have very, very Catalyst Dx placement performance international. We don’t have any introductory offer for Catalyst One international. We haven’t really brought Catalyst One outside North America. So, that addressable market is even bigger, far bigger. Kevin Alex - Piper Jaffray & Co.: Okay.

Generally speaking, practices are smaller outside North America than they are in North America. Kevin Alex - Piper Jaffray & Co.: Right.

There are obviously [indiscernible] like country but they are not, you don’t have these practices. Kevin Alex - Piper Jaffray & Co.: I guess I [indiscernible] figure out I guess how quickly should we see that ramp in. It’s obviously a gigantic market both in the U.S. and outside.

Well, we had given an outlook for the 10% to 15% growth this year in Catalyst placements and hematology placements and we’re obviously up to a solid start on that. So, this is something that will occur over time, but feel that’s the pace of ramp that were projecting. We feel good about how we’re executing on that opportunity. Kevin Alex - Piper Jaffray & Co.: Okay. Thanks.

Our next question comes from the line of Erin Wilson with Bank of America, Merrill Lynch. Your line is open.

Great. Thanks for taking my questions. Associating with the global initiative PR, where is the focus specifically internationally by geography and where will you be adding an international capacity on the lab side of the business like a new lab similar to what you’ve done in Germany? Did that support that sort of global demand or how you’ll be entering entirely new market here?

Yeah. Thank you, Erin for that question. You know what the neat thing is that we really already have a base in almost every market. I would say the market that we really didn’t feel like we had a strong base in was Brazil and now with the acquisition of a wonderful, wonderful distribution organization in which IDEXX aligned very consistent with our culture of entrepreneuralism. We have a strong base in Brazil. Obviously, we’ve been in Europe since early 1990s, we had been in China, for example since 2002. So, it’s really broad based. It’s there really isn’t any market where people have pets. They generally if they have pets, they value their pets and they value more and more. So, whether it’s Europe including Eastern Europe or for example South Africa, we have now gone direct in South Africa and Asia. We are doing very well. I think I may have mentioned in the call, Japan is a very strong market for us, the combination of Catalyst and ProCyte is. Japan is an in-house market that large majority of the testing is done in-house. They like to run in house. We got a very, very competitive portfolio there and our Japan organization really kicked in and gearing starting in Q4 and continued in Q1, and so it’s really across the board. And with regard to labs, we continue to look carefully about how to build out an optimise the lab infrastructure to provide world class service levels. In just little context here in the U.S. the majority of the market will kind of take place today service level for granted, but that’s an innovation outside the U.S. and that’s [indiscernible] picked up results in the evening and provided results the next morning. It wasn’t something that was really being done in continental Europe until we launched the [indiscernible] With its great logistic type of work and it was totally innovative thing. And so we think that combination of the [indiscernible]and our core lab in Lubisberg, Germany really makes a very powerful platform for continental European growth and of course we have strong lab organization in the U.K.

Okay. Great. That’s helpful. And fondly speaking, how would you characterize the profitability of the overseas business relative to the North American business in Companion Animal?

It’s a same fundamental economics in terms of the contribution that we get from recurring CAG diagnostics across modalities. I think it is we’re in a relatively earlier stage in investment and the infrastructure given the size of some of the businesses that we built to date. So the U.S. is obviously further along main. So, I think it’s relatively lower, but it’s not driven by fundamentally different economic drivers. It’s more our choice in growth markets to be investing maybe any infrastructure to build the business for the long term and as Jon said I think we see opportunities to do that investment [indiscernible] broadly and over time expect it will yield similar type of returns that what we see in the U.S.

Yeah. And I would say I will take the instrument and consumable business. The economics are very attractive around the world taking very little bit by country but overall they are very, very attractive and [indiscernible] we have a mature organization like we have in North America are very, very attractive. Obviously, the places will adjust getting more invested in new lab or starting up the lab organization just as what we, and start a lab anywhere there is an investment period. But I would reinforce what Brian is saying the core economics are quite equally attractive around the world.

Okay. Great. Thanks you so much.

Our next question will be from the line of Jon Block with Stifel. Your line is open.

HI. I’m actually Ethan Robb [ph]. I’m for Jon Block. Thanks for taking my questions. Just a first follow-up on Catalyst One I note so early in the lunch. But I was wondering if you could give any commentary on Catalyst One’s contribution to the 36% growth in Catalyst placements and then also are you seeing these Catalyst One placement, why not it’s something placed yet, but are you seeing the customer ordering Catalyst One more new accounts or is it upgrades from that at best? Thanks.

Yeah. I would say a large majority of what we saw in North America were Catalyst One and obviously Catalyst One has had pre offer and we were placing Catalyst Dx and we have deferred revenue component that Brian mentioned of up $2 million. Our percent placement to what I want to call “accounts that [grow on sold days] [ph]” that would be competitive at these placements or Greenfield accounts or just generally accounts that are new to IDEXX. Brian mentioned that greater than 50% Metric. In North America it was even higher than that, it’s anywhere at 50% or 59%. So, that’s a very attractive – that’s actually a high point for us in terms of competitive placements. And again one of the metrics that I mentioned I think really speaks the core health of the business and the opportunity for growth that we have. Obviously, we still have VetTest. We don’t have as many VetTest as we used to have little bit more than 10% of our consumables excluding corporate accounts and these are coming from VetTest accounts. But one of the things that we see when we upgraded the VetTest is they grow. They grow their in-house testing by 45% and we don’t fully realise that 45% because we’ve given some rebates to expand the profile with haematology and electrolytes. So, we only achieved 25%, so pretty good. But they’re saying that big uptake in growth and that helps their practice. This is a growth agenda and they see that uptake whether they are upgrading from that test or they are upgrading form a competitive analyser because of the unique nature that are in house lab. That’s the ability to turn results around easily and quickly 8 minutes within the 20-30-minute exam so they see that nice uptake. So, we really are by placing our analysers were expanding the market and so we get growth on both pipes of placements. Obviously when it’s a customer needed IDEXX we get a 100% of that is added to our consumable growth.

Okay. Great. And then just a follow-up question on the referring flat and you put up a really strong number even with some challenging weather conditions. Could you share us any details on how the business in North America performed relative to international?

We had a strong dimension stronger across regions. Europe, interestingly we had questions on the weather dynamic. It actually had good weather in Europe, I think, that helped a bit, but it was relatively stronger growth international but quite solid growth in the U.S. as well and the bulk of that growth was driven by volume gains. So, we feel very good about the health of the business across regions and particularly with some of the headwinds we saw in the U.S.

Okay. So, one last housekeeping [ph] question here. On a full-year EPS guidance, how you’re thinking about the FpEx impact. It seems as if you’re expecting having six centric [ph] the last time you reported. Now is it just a three centric from FpEx?

We changed the methodology there. I’m glad you point that out. We in the past had adjusted how we normalize for FpEx as we had adjusted the current year to prior year rates. We got a new methodology that it kind of leaves our current year numbers as is an adjust to prior years to see all the change in the table. There really isn’t much of a change in terms of the impact of FpEx. If you look at the normalized EPS growth, it’s very similar 11 and 14 or it’s the same. And that’s really just the change you see in a success and three centric [ph] is just related to that, that methodology change is not. There was some slight improvement in that impacts but it wasn’t a material impact.

Thank you. And as a reminder if you do have any questions or comments press * and then 1. We’ll go to the line of Ross Taylor with CL King. Your line is open. Ross Taylor - CL King & Associates: I had a question related to your comment about you potentially getting to double digit organic growth and you’re able to accelerate to that page. How much would that be dependent on increasing your installed base of customer versus just higher utilization of your existing customer base.

I don’t know we are both advancer [ph] and third is greater retention and those were kind of some modest price realization as Brian said it’s not a big factor, it’s a small factor but it’s mostly volume both in our in-house, it’s as price of bulk of our growth that we’re exhibiting in first quarter is volume. We think volume is very healthy. We think when we see revenue growth is driven by volume growth and testing is a very healthy dynamic. But it’s going to some about we really see – if we look as I mentioned are our new comp plan [ph] which rolled on Q1 great success with the North American Veterinary diagnostic consultants. We’ve advising [ph] them to grow a recurring diagnostic revenue and they get what their lost ways to grow it and they were quite successful in doing it and I think there is just a lot there in that opportunity that we see is on tape and it’s going to be utilization, it’s going to be new customer acquisitions with customer retention.

I would highlight the key – we talked about overall growth but obviously the key drive for our business is this recurring CAG diagnostic annuity, which grew 10% in the quarter and that now looks 9% to 11% for the year and what percentage of our total revenue that is 7% of our total revenues? This is a 72% in Q1 and that’s from what we’re trying to drive as a business model at the end of the day that’s what going to drive cash flow on our success economically and we’re feeling very good --- Ross Taylor - CL King & Associates: Just one final question and maybe I missed this in some of your prepared remarks but I guess revenues were a little better than you expected in the first quarter and can you give any comment as to whether in other words certain regions or product areas that really outperformed versus your expectations or whether it was more just across the board?

I would say two themes to highlight one is just strong execution, very pleased with how the company executed in Q1, a great start to the year. LPD was better than we expected in Q1, we expected a slow ramp down in some of the bovine testing programs in Europe and that’s – we do expect that to happen and we expect to pressure the balance year on that, but it was delayed a bit in Q1 and I would highlight that as a factor on the margin.

And the only one on the other margin is, as Brian mentioned briefly we had – while we had unfavourable weather in the US, we had favourable revenue in Europe and that probably added a little bit to the European performance although that execution fundamentally was very very strong, underlying that – when you put the two together but it was – and by the way I don’t think about favourable weather – it’s not a big as the US. So but probably we are going down the fine points here to answer your question.

We will go to the line of Jeff Frelick from Canaccord Genuity.

Thanks, good morning, this is Mark in for Jeff. Wanted to just maybe ask Jon if you can maybe add some color on increase in the field sales organization outside of North America? Can you walk us through or would you be able to quantify number of direct reps you are targeting for 2014 whether it is by region or even by continent?

Yes, no, I'm not really in the position to do that. It is really very, very country specific and there are a lot of different countries and the – one interesting thing about that companion animal business is each country is a little different. The core economics are the same, the opportunities the same but the way we execute in each country's a bit different. Part of it is because the way veterinary medicine is taught, it is different by country. So we really take a country specific approach. I think that's one of the strengths of our international organization is we have strong country management, strong entrepreneurial country management, they understand and take advantage of the market opportunity in front of them. They are able to adapt these core strategies to the market in general, as we've mentioned we've gone direct in the Nordics. We've gone direct in South Africa. We've gone direct in Brazil with an acquisition. And other markets we use, some markets we've been direct for 20 years and other markets we have very strong distribution that works well for us, so it is very specific. So it is hard to give numbers there.

And just as a follow-up, obviously weather was an impact in Q1. Could you maybe discuss what your expectations are for vet growth both at practice volume and practice revenue bucket?

I would say for the balance of the year we really expect the same that we saw for the full year of 2013, which was 2% roughly practice visit growth and 5 to 5.5% I think in terms of practice of revenue for the balance of the year. That’s the US number, obviously outside the US we don’t have the same kind of metrics but generally they are very good growth markets.

And we have no further questions at this time. So with that, we will finish here with closing comments.

I want to thank everybody for joining the call. I also really want to thank all the employees of IDEXX around the world for just a great quarter. I think we are doing great things to bring support and technology to our customers and the companion animal business, we are helping strengthen the bonds that matter, including the pet human bond and the bond between pet owners and the practice. We are bringing great things to the world in terms of our water and life style poultry diary business, and just really phenomenal success, so I really want to thank all – to take this opportunity to thank all of our employees and we look forward to continuing to update investors with our progress throughout the year in our future calls. That concludes our call.

Again ladies and gentlemen that does conclude your conference call for today. Thank you for your participation and for using AT&T Executive Teleconference service. You may now disconnect.