Good morning, and welcome to the IDEXX Laboratories Second Quarter 2019 Earnings Conference Call. As a reminder, today’s conference is being recorded. Participating in the call this morning are Jay Mazelsky, Interim President and Chief Executive Officer; Brian McKeon, Chief Financial Officer; and John Ravis, Senior Director, Investor Relations. IDEXX would like to preface the discussion today with a caution regarding forward-looking statements. Listeners are reminded that our discussion during the call will include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Additional information regarding these risks and uncertainties is available under the forward-looking statements noticed in our press release issued this morning as well as in our periodic filings with the Securities and Exchange Commission, which can be obtained from the SEC or by visiting the Investor Relations section of our website, idexx.com. 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 may also be found by visiting the Investor Relations section of our website. In reviewing our second quarter 2019 results, please note all references to growth, organic growth, constant currency growth and comparable constant currency growth refer to growth compared to the equivalent period in 2018 unless otherwise noted. 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 appreciate you may have additional questions, so please feel free to get back into the queue and if time permits, we’ll take your additional questions. I would now like to turn the call over to Brian McKeon.

Good morning, everyone. IDEXX delivered continued strong financial performance in the second quarter. In terms of highlights, Q2 revenues of $620 million grew 7% on a reported basis or 9% organically. Results were driven by continued strong 11% organic gains in CAG Diagnostic recurring revenues, net of a combined 0.5% growth headwind related to Brexit order timing and equivalent day impacts. The quality of our growth was excellent in the quarter, reflected in strong U.S. CAG Diagnostic recurring revenue gains across our major modalities. And 39% growth in new and competitive Catalysts placements in international markets, which supported solid global EVI gains and continue to high growth and consumable revenues. Profit performance continued at a strong pace in Q2 supported by continued high CAG Diagnostic recurring revenue growth and high profit flow through. EPS was $1.43 per share, an increase of 19% on a comparable constant currency basis, reflecting a better than projected 120 basis point improvement in constant currency operating margins. In addition to strong operating profit gains, Q2 EPS results also benefited from $0.04 per share, an upside related to share-based compensation tax benefits. While, our CAG Diagnostic recurring organic revenue growth remains strong and on track with our full year 11% to 12% growth goals, our overall Q2 organic growth of 9% was at the lower end of our projected growth range for the quarter, impacted by a few select factors. We fell short of our goals to build on very high prior year international chemistry upgrade levels with the majority of our Q2 upgrade placement shortfall in China. We also saw increased pressure on China LPD revenues in Q2, driven by the African swine fever outbreak, as well as a relatively higher than projected impact from Brexit and equivalent day affects in the quarter. These factors…

Good morning and thank you, Brian. IDEXX second quarter results build on our strong start to 2019, and reflect the strength of our recurring revenue business model, keeping us on track towards excellent full year results aligned with our long term goals. Our performance was led by solid 11% organic growth in our CAG Diagnostics recurring revenues, or 11.5% normalized for Q1 Brexit pooling and equivalent day impacts. This expanding highly durable annuity contributed 77% of IDEXXs total revenues in Q2. Let me start with a few reflections on the quarter. We were especially pleased with the strength of our U.S. performance in Q2, where we drove 11% recurring CAG growth, reflecting strong gains across all CAG recurring diagnostic modalities. We saw continued momentum in our U.S. reference lab business, whereas previously communicated, we continued to invest in operational enhancements such as new courier routes, new day labs, and weekend service. These investments provide service level and results, turnaround improvements, both of which support customer retention and new customer acquisition. In our North American VetLab business, Catalysts placements were up 8% including second Catalysts placed at high testing volume accounts, which also support customer retention and help drive continued double-digit consumable gains. Of note, the rapid assay business grew at 9% organically benefiting from superior clinical accuracy, effective promotional programs and improving customer retention. The business was also aided by our expanding SNAP Pro installed base, an increasing leverage of IDEXX multimodality testing capability. Reinforcing our long held premise the test that indicates testing; we’re seeing strong evidence of faster rapid assay 4Dx Plus growth, and IDEXX practices that also use our lab services and are adopting Preventive Care protocols. Globally instrument placements were solid during the quarter, considering tough compares at overall quality, with notable strength in international competitive…

Thank you. [Operator Instructions] And we will go to line of Michael Ryskin with Bank of America. Your line is open.

Hey, guys, thanks for taking the call. I want to start on the Reference Lab. The overall numbers, I mean, that was one area that came in a little bit lighter relative to expectations. And you talked a little bit about the U.S. performance and how well that held in, but international it seems like continues to lag just a little bit. I wonder if there’s anything going on there. I mean, we’ve talked in the past about the EVI and the focus on the point of care offering, but I want to see if the dynamic changed at all. And I wonder if there was any impact of the heat wave in Europe like we’ve seen in the past or anything like that?

Yes, Mike. Why don’t I just kind of clarify the numbers? But the Reference Labs trends in Q2 were very consistent with what we saw in Q1. I think here we have some normalization going on, but the U.S. was – the Q1 was 14%. It was like 13% normalized in Q2, and we had mid-single, very consistent mid-single digit gains in international. So we didn’t have a change in trend and Jay can talk more about this, but as you know, we’ve been sort of signaling target improvement as we work through the year on the international labs and we will have some more favorable comparison, but Jay can expand on that.

Yes, just some additional context heading. Our overall business performance internationally was quite strong. We saw the 12.5% normalized CAG recurring growth performance. And as Brian indicated in his remarks, really strong competitive and placements associated economic value with the international consumables growth at nearly 20% normalized. So overall, very good performance. As I indicated, we’re still in the process of building out the VDC expansion and I think time is as our VDC has continued to build relationships with their customers in the market and we know with time comes additional effectiveness. Keep in mind that we start with very strong country organizations. A lot of our sales professionals and country managers in international have been with the company, and know diagnostics for a decade or two decades. So that’s the base where we are building off of. In additional, they are representing phenomenal product line across the broad-based diagnostics offering. So we’re feeling good and about where we are and expect to continue to build off that capability in the second half.

And just to reinforce something Mike on performance versus expectations, we felt very good about the recurring CAG growth in the quarter. If you’d normalize the effects we highlighted, it was 11.5%. That’s where we are year-to-date, that’s right in range with what we are trying to achieve, fee for the full year. So relative to what we were targeting, this was an area that was right on line with what we’re hoping to achieve.

All right. That’s helpful. And a quick follow-up if I could. I’ve gotten a flurry of your questions, since you brought up the comments on China. That was a little bit surprising. Could you just walk us through what happened there? What do you saw in the quarter? What your expectations are for the rest of the year?

Yes, we had a couple of effects that were related to China. Let me break them down and maybe LPD is the easier one to start with. But we’ve been working through the Africans swine fever impact. As you know China is not a big part of our overall company revenues. It’s 2.6% last year, roughly evenly split between LPD and CAG and – but within the LPD business, the swine testing business in China is a meaningful part of our LPD revenues, and we saw an acceleration in decline on the African swine fever from the Q1 levels. It’s a business it’s a little tougher to predict. We can – we sell into larger laboratories and so it’s a little less visibility than some of other assets of our business, but that was a couple of $1 million below what we were expecting to achieve in the quarter, and we feel like we’ve got that reason to calibrate it. We’ve got some other initiatives we are advancing to mitigate that and we’ve got some promising trends in other parts of the business, health herd screening that we feel good about. So I think the – net-net we think we’ve got that factored in but that was a surprise in Q2. On the instrument placements, we had excellent competitive instrument placements in China. The challenge that we had was, we had very strong prior year VetTest upgrades as well and I think in retrospect, we probably had overly aggressive goals going into this year to both to make progress on the competitive – new competitive front and to build on the strong upgrades. So it’s always been a competitive market, wouldn’t necessarily relate to softness in the market per se, I think, with some more as I mentioned, retrospect that we probably had aggressive goals here. But I think that’s another point of context. So China is smaller for us overall, but I think in the quarter, had some impacts, but we feel we’ve got that calibrated in the updated outlook.

That’s really helpful. Thanks.

Thank you. Our next question will come from the line of Ryan Daniels with William Blair. Your line is open.

Hey, guys. Thanks for taking the questions. And I’ll also start by wishing Jon the best in his rehabilitation. Jay, maybe one for you, you talked about the record enrollment of, I think 370 practices in the IDEXX Preventive Care program. Can you speak a little bit towards what’s driving that? It seems a little bit unique, I think, we typically see kind of a rapid growth in early adopters and then slowly in the vet space. So what’s driving such strong momentum there for your business?

Sure. Thank you, Ryan, for the question. We think it really starts with a fact that there is a very sizable market opportunity and I’m going to refer my comments specifically to North America in the U.S. We think that the U.S. Preventive Care market, addressable market is about $3 billion, we saw about $1 billion and that have served in – and we have about a third of that. So we’re still in the – in our early stages of being able to develop this marketplace. And then you look at just sort of benchmark and provide some background context on the opportunity, a fairly small percentage of Companion Animals are getting tested today. We have cited statistics and data in the past that about 15% of dogs come in to a practice for clinical visits undergo a chemistry test, only 15%. On the vector-borne disease side, a little over third. So 36% canines in any given year get some sort of vector-borne disease screened. This could be something as basic as heartworm, only 15% are getting the full vector-borne disease screened before the act. So that stats with a very sizable opportunity. And then from a programmatic standpoint, the IDEXX Preventive Care program, I think really hits a sweet spot in the marketplace we have a care protocols designed specifically for Preventive Care or wellness screening, it’s priced to really drive compliance with the client. We are able to provide tools and training for the practices and repeat follow-ups. So from the standpoint of operationalize, they’re implementing a concept that our customers are quite interested in to begin with, but have struggled in the past to be able to get good traction with this, we think we have really hit the sweet spot and our field is trained and excited by it and consequently driving growth with it.

Okay, super helpful color. And then just as a follow-up on a different topic, the operating margin performance continues to display upward pressure despite investments you’re making. Can you maybe highlight what some of the key deltas are between prior expectations versus kind of the expectations you had going into the year? What are really the major upside drivers there? Thanks.

Yes, I think a couple of factors. I think we always benefit from good execution on growing the CAG recurring diagnostic revenue. So I think there the incremental flow through from that growth is high gross margin for us and I think that always if we’re executing well, which we have been, supports good P&L profile. We’ve had, as I mentioned in my comments, somewhat slower than anticipated ramp in some of the growth we’re projecting for R&D and sales and marketing, nothing to be concerned about, it’s more just in a world where there is a lot of competition for talent, where we don’t have all the position filled with the way that we had originally projected and we’re confident we can get on that track, but we had some upside related to that. And we have had good G&A management. We’ve been disciplined in the corporate functions, we had better than expected benefit cost, which is something that we have – our HR team does a tremendous job of managing that area. And I think we’re seeing good results as a company from that. That’s been favorable. And so those are some of the drivers, I think it’s broadly Ryan, more just reflective of the health of our business model, when we’re growing, the recurring CAG revenues as well that has good favorability for us.

Okay. Thanks for the color.

Thank you. Our next question will come from the line of Erin Wright with Credit Suisse. Your line is open.

Great. Thanks. And I do wish Jon all the best in his recovery as well. We’re all thinking about him here. And thanks for taking my questions as well. I guess a follow-up to the last question there kind of on the profit experience that obviously, was pretty strong and were there any some timing dynamics, where you’re seeing that some of the costs were potentially pushed out to the outer quarters or how should we be contemplating that quarterly cadence in terms of the profit dynamic for the balance of the year?

Somewhat, you know, more modest, I would say, in terms of pushing out timing. I think it’s more of the ramp of the cost, Erin, so we’re a little favorable in Q2 and we’re anticipating we’ll be back on track in the back half of the year and that’s reflected. We shared a 50 to 100 basis points constant currency improvement in Q3 so that reflects that we’re seeing the cost growth particularly in R&D and in the international sales and marketing, getting ramping as we work through the year. So it – we had – that I would say is the bigger driver was and we have some specific benefits just in terms of things that we’ve been managing effectively in the quarter, but we feel comfortable with effectively we’re – we’ve an outlook for the second half that’s more 50 to 100 basis points which is in line with our longer-term trends and goals.

Okay, great. Thanks. And then on the Preventive Care side, what could add instead of your urine analysis to the program add for you? Is this significant in terms of financial contributions or placement trends or how much of your existing kind of Preventative Care users are actually already incorporating urine analysis in their program? I’m just curious what could this could add? Thanks.

Yes. So we – thank you, Erin, for the question. We think over time that it will help support our Preventive Care momentum. Over – there’s a majority of customers who already use urine as part of the testing panel for Preventive Care, and one of their requests from customers as they wanted to pressure because it’s more clinically relevant. So being able to provide at a multimodality screen for customers was extremely well received in the marketplace, we’re enthusiastic about it and we think it also, by the way, help with SediVue placements over time.

Thank you.

Thank you. Our next question comes from the line of Jon Block with Stifel. Your line is open.

Great, thanks, guys. Good morning. Maybe two questions on some similar themes that were already touched upon, but just to go to Preventative Care, I think, Jay, you might’ve mentioned roughly a 300 basis point premium growth rate from those called PCC adopters versus the non-adopters. And maybe if you can elaborate on that a little bit. Do you think we see that delta widen further over time? And maybe if you were to isolate the practices that did adopt PCC, where were they previously? In other words, were they 7% or 8% and jumped to 14% or 15%? Any more granularity would be helpful. Thanks.

Yes. So, just in terms of that, that 300 basis point orbit, we think that those customers are using more diagnostics that they have got from largely testing geriatric patients that testing adults and senior patients and incorporating diagnostics in their panels. I think what the data shows is that they had perhaps assumed that if a dog or cat was well and was an adult, that they didn’t do diagnostic testing, they didn’t need to do it. And what the data is showing is that they’re very significant, we’re able to uncover very significant number of abnormalities that require follow-up in doing testing. So we think that it’s just a classic case of being able to demonstrate that the clinical benefit of doing testing more broadly across the population patients. In terms of how that plays out differentially, in terms of growth over time, we’ll say, we expect to continue to see benefits, but that’s a function of…

And Jon, we’ll share more of that at Investor Day, that’s obviously part of the long-term strategy and we’ll share how we’re thinking about that.

Okay, great. And then sort of a quick follow-up, two small ones. First on new products, you got that Analyst Day coming up, right. As you just mentioned, I hope you’ve got a lot of to discuss. But is the belief that new product introductions are more, call it an industry conference event rather than a Wall Street event and the other small one would just be on the $5 million in organic revs coming down, it certainly seemed like it did not occur in CAG recurring. So if we were to isolate it, Brian, is this sort of 50-50 between, call it LPD and the instrument side? Thanks, guys.

Two questions, just on the first one, Analyst Day is we intend to have discussions in new products when we’re ready to bring them to market. So I think we’re – you should anticipate, we’ll have those discussions close to when we’re ready to bring products to market and we’re not going to be trying to time it around investor events if you will. No offense, but I think we want to have this lined up as best we can in terms of executing with their business. And in terms of the dynamics versus – deltas versus our expectation in the quarter, Jon. It was – that was pretty much it. It was three things; it was – the international upgrades where we – we had great competitive placements, but we were probably a little aggressive on trying to do that and build on the upgrades. It was LPD, China, specifically African swine fever effects. And to a degree we’ve underestimated the days impacts in Europe somewhat. We didn’t flag that 0.5% impact heading into the quarter and we knew there were some impact, but that turned out to be just where the days fell a little bit more significant than we anticipated. But some total that was about $5 million, $6 million delta to where we thought we’d come in and we’re basically just flowing that through. We think it’s a largely second quarter. We’ve calibrated effectively and feel very good about the year. And as you pointed out, the recurring CAG right on track and healthy year-to-date trends right in line with what we hope to achieve for the full year.

Perfect. Thanks for your time, guys.

Thank you. [Operator Instructions] We will go to the line of Mark Massaro with Canaccord Genuity. Your line is open.

Hey, guys, thank you. And I also want to send my best regards to Jon in his recovery. I guess my first question is just on the, how you guys are thinking about – I know you’re not ready to guide for 2020, but you’ve posted some really strong growth in premium instruments as you’ve talked about in recent quarters. And you’re going up against difficult compare, as we think about our models for next year. Recognizing that instruments are only 6% of your revenue, how do you think about growth rates in instruments going forward given difficult comparison?

We intend to continue to build on our rate of placements. I think that the more important metrics to kind of focus on, are broader than just placement growth we’re obviously, as we’re growing our placements, expanding our installed base that supported by improving retention. So we pointed out in this quarter, the 15% year-on-year growth in the North American Catalyst installed base, about 5 points to that is the Banfield expansion and 28% international. So we’re -- now this is a business where we’re adding more instruments and doing a better job retaining our customers that installed base continues to grow, it’s the flywheel effect. And that forms the foundation for additional drivers of growth, right? In terms of expanding the adoption of our innovations on this platform – on our platforms, adding new innovations as we have done in recent years as well, and that’s all supported by the in-house commercial capabilities that we have the VDC model. And that outflows into the strong double-digit recurring CAG growth delivering and we intend to deliver in the future. So it’s one metric, as you point out, we’re building on bigger numbers we want to keep going on that, but there is a broader model here in terms of driving increased utilization and innovation on these platforms that grow and capability over time that support the double-digit growth.

Yes, just to add some color to Brian’s remarks. A key element of our strategy, Mark, is to be able to continue to drive menu expansion which in turn supports the CAG Diagnostics revenue growth. So if you take look at Catalyst for example, we have a technology for life type of philosophy, seven new assays as part of the menu in seven years, latest being Progesterone, it’s a great example of bringing Real-Time Care measurement to the clinic. As you know the pregnancy, the contamination of it, there is tight window on the veterinarian wants to be able to advise the breeder in terms of the optimal time, it -- if you are able to do that in a real-time basis with Catalyst in the clinic that drives serial testing. In the case of SediVue, another great example, with SediVue the neuro network 4.0 which we released earlier in the year based on 175 million images, more geared towards the 4.0 release of liver function, bilirubin and ammonium biurate. So we’ve got excellent customer feedback on that, and we continue to drive do manual expansion more testing utilization. So that’s a key element for our strategy.

Excellent. And I also wanted just ask about the end market. Trends look strong to us. You reported clinical visits grew 2.1% this quarter. Do you expect clinical visits to hover in that call it 2% growth rate? And then I also wanted to ask about how you’re thinking about competitive dynamics for the next year given Zoetis expecting to complete their integration of Abaxis on their SAP?

Yes. So from a market performance standpoint, top line practice revenue growth was 4.4%. That the clinical piece that you indicated was 2.1%, we think the relevant piece, at least, for our business because that’s where the diagnostic testing occurs as part of those visits. And we’re in pretty much in line with what we have seen in the past is a little bit of variability quarter-to-quarter. But we think it was a strong quarter, it supports the CAG Diagnostics recurring growth profile that we achieved in the quarter and that we have indicated from an outlook standpoint, we expect going forward. And I also think that when you take a look at some of our market development activities like Preventive Care, that will continue to drive the market. Part of what we do is we create markets, we manufacture our own growth. In terms of the your second question on competitive dynamics, we haven’t up to now seen a change, more broadly speaking in the competitive landscape, we’re always looking and anticipating that, but our focus is really on our customers and servicing our customers with solutions that address both the clinical and business needs.

Thank you.

Thank you. Our next question comes from the line of David Westerberg with Guggenheim Securities. Your line is open.

Thank you for taking the question and best to Jon as well. So can you give us an update qualitatively or quantitatively on SDMA slide? Is it running above, below or at expectation in terms of contributing to growth, and how do you see this as a kind of a multiyear growth driver?

Yes, thank you, David for the question. We are very pleased with the progress we’ve made on Catalyst SDMA and in fact, close to 60% of customers in the second quarter actually used SDMA on Catalyst, that’s a global number since its introduction are close to 70% of customers have actually purchased SDMA for Catalyst. Another benchmark connected with that is, we’ve now run over 2 million SDMA tests on Catalyst since its introduction. Now that’s on top of 22 million tests plus, 22 million plus test that we run the global reference lab since introducing that test on the reference lab. So we think from a customer perspective, customers have really accepted SDMA as an essential element of the chemistry panel. They see significant clinical value, not just for sick patient visits, but also well visit testing. One study I will share more of this at Investor Day is looking at well patient testing when we move from just a basic Preventive Care straight. So chemistry, CBC, the one that includes SDMA, we see a 40% increase in profiles that indicate the need for further action. So we’re really clinically powerful. I think our customers appreciate that and we are seeing the type of uptick in the metrics I shared with you that support it.

Got it. All right. Thank you. And then – just maybe to around consolidators and corporate clients, can you just talk about changes and demand around software, middleware or Web links Smart Flow? Are these good conversation starters? Are these revenue drivers? Are they maybe cross-selling opportunities? Can you just walk us through the more the software part element of the corporate customer base?

Sure. I’d be glad to do. So just as a background, keep in mind that the whole notion of corporate and consolidation, it’s not a new dynamic in the marketplace. IDEXX has had quite a successful track record in partnering and growing with corporate accounts over time. But when you talk to the corporate account CEOs, they generally identify commonly, three top issues. One is staff engagement and retention, the second one that you pointed out is really this notion of enterprise scale in IT and software, the third, they want to continue to drive or improve profitable growth in their corporate practices. And we address all three as a company. First with diagnostics, because diagnostics is connected to the Information Management piece, and they I think recognize our diagnostic as a profit center, it drives the care envelope, it’s an important part of their practices that is in subject of some of the same headwinds that they may see in product sales whether it’s food or therapies. And there’s a lot of evidence that when we provide these types of solutions to them, their staff will desire to practice best medicine remain more highly engaged. From an Information Management standpoint, now getting specifically, to the core of your question, our customers, are corporate customers place a very high premium on integration in helping them out with workflow and workflow optimization. And the type of solutions that support that are Cornerstone or PIMS solutions, Smart Flow, Netconnect+, enterprise management and analytics packages that we come up with. The Smart Flow is a great example, where they have a really resonating with an application that works with our PIMS and other third-party PIMS that provides embedded connectivity that helps them with workflow, optimization and communication in the staff. It automatically captures, charges, if they desire to go paperless or paperless light, it has electronic forms. So these are the type of things that they are looking for, and highly responsive to.

Great. Thank you.

Next we’ll go to the line of Andrew Cooper with Raymond James. Your line is open.

Thanks for the question. Lots already been asked. So I will keep it quick. Just as we think about kind of IDEXX 360, and more conversations about leveraging the multimodality approach. How has that evolved relative to kind of layering in your end, like you mentioned and some of the numbers competitively? Has there been any change there and how do you continue to drive that as a really competitive advantage for IDEXX relative to what others in the space can’t replicate?

Yes, so, we obviously, have differentiation because we have multimodality solutions and have the ability, like we’ve have just shown with the IDEXX anywhere urine analysis bundle to be able to provide, the best clinically from a solution standpoint, wherever it makes sense to be tested. So I think it’s largely supportive of helping the practice the way they want to.

And Andrew, I’d point we’ve seen steadily increasing rates of growth in cross CAG agreements with our customers. And that’s been a trend that’s been ongoing, but really has accelerated with concepts like 360 and the advancements that we continue to make and just bringing together broader capability to our Information Management innovation and so, to your point it’s an area that’s a building momentum and you see that in the strong growth in EVI and in as well as increasing retention rates across modalities. So it’s definitely been core to IDEXX strategy for a long time and we’re executing very well against programs like 360, just help to reinforce that.

Great. And then just one more quick one, I think following up on a question I think Jon asked, but when we think about Preventive Care and the uptake in growth relative to the base, can you help us think about the ramp of how fast from an account says, all right we want to layer it in with the pricing you suggested et cetera, et cetera to seeing that outcome. What the sort of the ramp looks like? And how if there’s any kind of color we should be thinking about or you think about the tail to that as we get out further from the first year to the second year? I know it’s still early but any color there would be great.

I mean just keep in mind from a background standpoint that it takes time. It’s a change management event in the practice. It’s not just the veterinarians but the veterinarian tax receptionist, all practice has to change focus from into a new testing category or approach. So it takes time. We’ll share some insights at Investor Day in terms of what that looks like but there’s no one rule that fits all.

We’ve made very good progress and it’s supporting a high reference lab growth and we’re seeing benefits across the business. So it’s something that I will that will build over time and like many other things that we have in our business, there’s a very long runway for development, which bodes well for sustaining high growth for the long run.

We have time for one more question.

That will be a follow-up from the line of Michael Ryskin with Bank of America. Your line is open.

Hi, thanks for squeezing me for the follow-up. I just want to confirm something from the prepared remarks, I thought I heard you say that the third quarter organic guide was 10.5% to 12% for the total company. I recognize you’ve got the extra selling day and that should be a sizeable at 100 to 250 bps tailwind but that still, just trying to look at the comps from prior years. You still have a much tougher comp 3Q versus 4Q. So I was wondering if there was anything other than going on in pacing between third quarter and fourth quarter as you go through the year? And have also how you think about some of the you call it out the guide for the second quarter, all U.S. instrument placements may have been too aggressive, so just want to get a sense of how, the aggressive guidance in 2Q factor into third quarter and beyond?

Just on the third quarter, we talked about to restate, 9.5% to 10.5% overall organic and 10.5% to 12% recurring with the day-to-day and a half. I think that the day benefit is a little bit higher on the recurring fees, Mike, so it’s largely reflective of the year to-date trend adjusting for the days and we feel very good about our momentum and our ability to deliver that. So it’s not anything specific to Q3 timing other than the day change.

Okay, got you. I think I heard you wrong on the overall number then.

And I would say on the instrument – look, we’re -- as you know we’ve got -- we’re always trying to build off of a high base and we are executing very well on driving EVI gains and expanding our Catalyst installed base and we think we’ve got our full-year impact of my back half outlook properly calibrated.

Thanks.

Okay, thank you, all, with that we’ll conclude the call. I want to thank our employees for the very strong progress and performance in Q2 and the advancement of our purpose, which is enhancing the health and well-being of pets, people of livestock around the world. I’m also – and also I’m grateful for the confidence that our investors have in IDEXX and our business model. We look forward to being able to share our work with investors and seeing all of you in person or through a Reg FD Presentation at our Investor Day in a couple of weeks. So thank you very much for calling in. Cynthia, that’s it.

Ladies and gentlemen, that does conclude your conference call for today. Thank you for your participation and for using AT&T, the Executive Teleconference Service. You may now disconnect.