Good day, ladies and gentlemen. And welcome to the Fourth Quarter 2007 PerkinElmer Earnings Conference Call. My name is Katie and I’ll be your coordinator for today. At this time, all participants will be in a listen-only mode. After the speaker remarks, you will be invited to participate in a question-and-answer session. [Operator Instructions]. I would like to now turn the call over to your host for today is Mr. Mike Lawless, Vice President of Investor Relations. Please proceed.

Thank you, Katie. Good afternoon, and welcome to the PerkinElmer fourth quarter 2007 earnings conference call. If you've not received a copy of our earnings press release, you may get one from the Investors section of our website at: www.perkinelmer.com or from our toll-free investor hotline at 1-877-PKI, NYSE. Please note that this call is being web cast live and will be archived on our website till February 24, 2007. Before we begin, we need to remind everyone of the Safe Harbor Statements that we have outlined in our earnings press release issued earlier this afternoon, and also those in our SEC filings. Any forward-looking statements made today represent our views only as of today. We disclaim any obligation to update forward-looking statements in the future even if our estimates change. So, you should not rely on any of today's forward-looking statements as representing our views as of any date after today. During this call, we will be referring to certain non-GAAP financial measures. A reconciliation of the non-GAAP financial measures we plan to use during this call to make directly comparable GAAP measures is available as an attachment to our earnings press release. To the extent that we use non-GAAP financial measures during this call that are not reconciled to the GAAP… to GAAP in that attachment, we will provide reconciliations promptly. I am now pleased to introduce the Chairman and Chief Executive Officer of PerkinElmer, Greg Summe.

Thank you, Mike. Good afternoon, everyone. And thank you for joining us on today’s call to discuss our fourth quarter 2007 results. Joining me on the call are Rob Friel, our President and CEO elect, and Jeff Capello, our Chief Financial Officer. I will begin by reviewing the major highlights of the quarter. Jeff will provide more detail on the financial results and Rob will comment on the outlook for 2008 and after that, the three of us will be available to answer questions and then we will conclude the call. The fourth quarter was excellent and finishes off a very successful 2007. Furthermore, we believe that we entered 2008 with very good momentum. In the fourth quarter, our revenue increased 20% with revenue growth of 19% in our Life and Analytical Sciences and 22% in Optoelectronics. Our revenue growth in the quarter was led by Medical Imaging, Genetic Screening, Specialty Lighting, Service and Analytical Sciences, all with double digit growth. At 10% this is the highest organic growth since fourth quarter of 2000. Our adjusted earnings per share were $0.45 which was above our previously forecasted range in consensus expectations. Cash flow from continuing operations was $97 million, up 15% from last year. And these strong results conclude an excellent year of double-digit growth for the company with 2007 revenue up 16% to nearly $1.8 billion, adjusted cash EPS of $1.30, an increase of 13%, even with including the dilution from ViaCell and free cash flow or cash flow from operations less capital expenditures for the year at approximately $160 million. Overall, we are very pleased with the growth momentum of our business and we look forward to a strong 2008. Let me just turn to a couple of the business highlights. First we completed our acquisition of ViaCell,…

Thank you, Greg, and good afternoon. This afternoon I will provide some details on our revenue, costs and cash flow for the fourth quarter 2007. Then I will provide guidance on 2008, including full year and Q1 ’08 guidance before passing over to Rob Friel for some comments on the health of our businesses. Before I get into the specifics, I want to clarify that whenever I talk about a particular measure being up or down, I am referring to an increase or decrease in that measure during the fourth quarter 2007 compared to the fourth quarter 2006. And to the extent that I use any non-GAAP measures, those have been reconciled to the comparable GAAP measure in the appendix to the press release on our website. Turning first to revenue, we finished the fourth quarter of 2007 with sales of $511 million, up 20% compared to $427 million in the fourth quarter of 2006. Foreign exchange and acquisitions each increased sales by approximately 500 basis points. By segment, revenue growth was 19% in LAS and 22% in Optoelectronics. LAS revenue growth increased by approximately 700 basis points from acquisitions, and approximately 500 basis points from foreign exchange. Foreign exchange increased Optoelectronics sales growth by 300 basis points. The remaining revenue comparisons are presented on a reported basis including the impact of foreign exchange and acquisitions. Geographically, revenue increased in a strong double digits across all regions with 41% of revenue being the Americas, 38% in Europe and the remaining 21% in Asia. Gross margins for the fourth quarter 2007 were 41.8%, roughly flat compared to fourth quarter of 2006. Adjusted for the impact is stock option amortization expenses and purchase account adjustments related to ViaCell gross margins were also roughly flat year-over-year. Favorable gross margins from ViaCell business, volume…

Thank you, Jeff. As we enter 2008, our businesses have good positive momentum and are well positioned to continue to deliver the strong growth on the top line and the bottom line, as Jeff just mentioned. The strength of our franchises and our participation in three key market trends, should continue to create opportunities for us to grow almost irrespective of the overall rate of global GDP growth. These trends are the rising cost of healthcare cost, requiring better predictive diagnostics and more effective therapeutics, the pressure for more testing of food, consumer products and our environment due to increasing health concern and finally, the rapid adoption of flash modules in the camera phones. The fourth quarter was another strong quarter for genetic screening, as we continue to experience very good market conditions, across virtually every segment of the business, including newborn screening, prenatal and maternal health, molecular diagnostics and now, cord blood. We enter 2008 as a leader in reproductive health with a significantly expanded market reach, scale and breath. This year we expect to continue to growing in the mid to high teens organically, by leveraging expanded channel into the OB-GYN professionals from ViaCell in the prenatal screening market. In the neonatal market, we are excited about the potential to combine the metabolic screening lab from Pediatrix Medical with their existing global capabilities. As well as our new direct marketing channel into expecting parents. In the maternal screening area, we are growing nicely outside the US and continue work on our PMA for the US market, while across all our products, the international markets still remain under penetrated and represent great opportunities for us. Our other diagnostic business is medical imaging, which should also grow in the mid to high teens this year. As the end market continues…

[Operator Instructions]. And you're first question comes from the line of Ross Muken from Deutsche Bank. Please proceed.

Hi guys.

Hey, Ross.

Congratulations. Great quarter and congratulations Rob.

Thank you.

Could you give a little more color specifically on the health sciences businesses on more of the biopharma assets and in some of the… or life science assets, sort of what you saw on a global basis, in terms of demand by geography and just a little more detail sort of, of what you're seeing in each of the customers segments, key customer segments in those geographies?

Okay. Let me start off with that. So, I would say from a product perspective we're clearly seeing more growth on the reagent side than the instrument side and I think this is a function of what you're seeing in the press, with regard to pressure on budget and I think it’s heading particularly to the capital expenditure side of things. I would say it’s clearly more… that problem is clearly more acute on the Pharmaceuticals side than it is on the Biotech or the academic side. So, our approach is to continue to drive new products particularly into the reagent area and I mentioned a couple of those areas particularly our cell-based assays and GPR screening. And we're also seeing a fair amount of interest in this recently introduced product around assay development services as a number of the large pharmas are talking about outsourcing, some aspect of that. I would say geographically we saw much stronger growth in Europe than in America and Asia, which isn’t a significant piece of the business for us, it was also up but not, again it’s not a big portion of the business for us.

But in terms of the key customer segments, I mean what was driving the European out performance. Was it biopharma related push there or was it environmental?

Well, so, I was just talking about the drug discovery piece.

Okay.

So it was… so I would say it was driven largely by biopharma, but again I think it’s increasingly harder to sort, of characterize biopharma because it’s almost customer by customer. So, we’ll see certain customer’s increasing their spending… expenditures quite significantly, where other individual pharmaceutical companies would be cutting back fairly severely

But it just so worked out for our mix in the first quarter, Europe was much stronger the U.S.

And in terms of the emerging markets?

I’m sorry.

Emerging markets? As a China, India, et cetera?

Yes. I think those continue to grow, in sort of 20% plus area.

But again for us it’s a relatively low base in drug discovery. Now if we move over to the analytical sciences area. I think you're point before was valid and that’s been driven a lot by the environmental, the food and the consumer products monitor, additional monitoring that’s being, seems to be required. And I would say in those businesses we actually saw higher growth in Americas than we did in Europe and we also saw strong growth in Pac Rim.

Okay. And then, you guys have done a real nice job of accelerating revenue growth via a lot of smaller tuck-in acquisitions. As we turn to 2008 what should we expect from sort of a capital deployment perspective. More small yield any sort of preference to sort of doing possibly a larger deal and how do you think about where you are from a leverage perspective.

So, I would say, as you mentioned, I think we've been pretty happy with the progress we've made on these sort of tuck-insurance, which as you know is adding products, services and technology. So, I would expect us to be… continue to be and use that model, are less inclined to do larger deals. I think from a leverage perspective, as Jeff mentioned we're probably around one times EBITDA now. I think we would probably be comfortable up to probably a little under two times. But I don’t know that we would go significantly beyond that.

Okay.

And the only thing that I might add to that Ross, would be as I mentioned earlier, we have about a 1.9 million shares left in our…

Right.

Previously approved program. I would to look to kind of get that done in ’08 and probably at a minimum to keep the share account flat. So, buying any dilution from the impact of employee stock options and employee stock purchase plans, which traditionally is in the 2 million to 2.5 million shares per year. So, at the minimum we’ll do that and we’ll look opportunistically at other share repurchase programs.

And Jeff, just quickly. There was a little bit disruption on the call from a house keeping perspective. Could you just go through the tax rate again for the quarter?

Sure. So, we forecasted overall a 24.5% rate for the year, we came in at about 100 basis points below that.

Right. But specifically for the quarter was there any comment on the tax for the quarter?

Yes. And for the… so, I’m sorry. For the quarter we also kind of foreshadowed 24.5%and we came in 100 basis points below that.

Okay. And that was on the one timers?

No. it’s just on the distribution of income.

Okay.

We tend to earn more income in certain places where we have favorable tax situations we end up with a better rate for the quarter.

Okay. Perfect. Thanks guys. Congratulations again.

Thanks.

Your next question comes from the line of Quintin Lai from Robert W. Baird. Please proceed.

Good afternoon. Congratulations, on a nice quarter and year-end.

Thanks Quin.

As you look at the rest of your industrial pieces not exposed, not part of the regulation or regulatory environment. How cyclical do you see that part of the business and how much visibility do you have right now as you look out into ’08 for those lines?

So, I guess, as we talk really when you say the non-regulatory, you are talking the sort of non-diagnostic based?

Well, so when you say that 70% of analytical services--?

Okay.

Is due to some type of regulation and monitoring, I assume that the 30% might be tied to maybe some commodity--?

Okay. I understand the question now. So, I would say our insight into that is probably about one quarter out. And while I would say it will be impacted by an economic slowdown, it’s fairly diverse from sort of industry-to-industry. So, we are not really tied to any one specific industry, but I think there could be some variability in that and it will be impacted. But we are generally… our booking are probably in the next quarter.

Hey, Quin, I would say that is also reasonably diversified across geography. So, in that business, we are about a third-to-third U.S., Europe, rest of the world. So, it will depends where the economic effect is.

All right. So, then what you are saying is that… and then the vast majority of, I guess, of the services… the Analytical Sciences side then isn’t really fond to that cyclicality…well, potential cyclicality.

Right, that’s because of the 70% of the side to the other areas.

Excellent. And then with respect to your Photonics business, especially your lighting, all of these the cell phones start to adopt xenon modules. Could you talk a little bit about your capacity and your potential to grow that business line?

Yes, Quin, it’s Greg. So, capacity is relatively easy for us to ramp up. Just to give you some sense, we have then in the flash lighting business for decades. And if you go back five years ago, just as short as five years ago, there was a very high volume that was placed to film based single use cameras. And so, what happened with this shift from film to digital, of course, we had a number of years that are very tough sort of comps as we went through that cycle, with the film dropping down. But we have a fair amount of capacity on the lamp side, as when you go from lamps to modules is really you think about that as leveraging into EMS industry. So, the big contract assemblers are the ones that sort of help put it into the module format. So, I think capacity flexes pretty well.

And then my last question, I will jump back in the queue. As you look at your diagnostics franchise, again, it’s just going so well. You are doing well in the neonatal and the prenatal, do you see direct-to-consumer is your next big frontier and along that lines how is the ViaCell integration going?

Of course, I would say the direct-to-consumer is an opportunity for us. I think there is a number of opportunities across the genetic screening business. I think that’s just one of them. I think the combination of that channel we picked up from ViaCell with, hopefully, the closure of the pediatric medical acquisition I think allows us to do some confirmatory testing, some secondary testing. And so, I think that is an opportunity for us, but as I mentioned there is a number of other things that we are looking at. And I would say the ViaCell acquisition seems to be going pretty well. They did have some very good growth during the 245 days we own them in 2007 and they continue to… started 2008 in good shape. So, I think we feel pretty good about that.

All right. Thanks. And we would like to both also offer our congratulations and best wishes to both Greg and you as you move on to new roles.

Thanks, Quin.

Thank you.

The next question comes from the line of Peter Lawson from Thomas Weisel Partners. Please proceed.

Hi. What’s been driving the Optoelectronic business in the Opto margin, is it just volume and is it sustainable?

Yes. So, Peter, this is Jeff. So, in a lot of what’s driving that is just pure volume, the mobile phone revenue comes in at operating margin that is favorable to Opto and favorable to all of PerkinElmer, so we get good lift out of that. In addition, the fixed cost nature of the facility, the fab for the amorphous business, medical imaging business is such that when we add all this capacity, the cost is spread over 20 year period, because these are assets that last quite a while and the volumes is ramping up pretty quickly. So, the incremental profitability is quite high, which is going to allow us continue to kind of pushup the profitability Opto as we move forward.

And then on the ViaCell business, when do you start to see cross-selling benefits and are there any other products that you are thinking of driving through OB-GYN channel?

Hey, this is Rob. I would say probably middle to the back half of ’08 as we would expect to see some benefit from the cross-selling, there is some training that’s involved. And so, I would say it’s probably not going to be in until sort of mid later’08. And I think we do look at other opportunities across the market to advantage of this very significant channel we have into the OB-GYN professionals. So, I think we will continue to look for additional products in the technology and services we can put through that channel.

And I think that will be an area of focus from a business development perspective is defined smaller companies that would kind of be nice technology tuck-ins that they don’t have the financial bandwidth to king of forward our sales force that tend to be OB-GYN networks. So, quite intently focused on that.

Okay. And finally, we have heard a lot about weakness in the Japanese market. What’s been happening there for you? Could you talk through the trends?

So, I would say our Japanese business has been soft for quite a number of quarters now, so we haven’t seen a significant change, I would say, more recently because we have been experienced weakness, probably through most of ’07.

And is there any chance of pick up. Is there any structural changes that have to be placed?

Well, I think it is a combination of maybe some softness in the economy as well as some operational improvements that we would need to do in some of our operations in Japan. So, I would say it is a combination of both. It’s hard for me to comment on the economic turnaround but I think we are making some good progress in improving our operations in Japan.

Okay. Greg and Rob, congratulations on the real transitions.

Great. Nice Peter.

Thank you.

Your next question comes from the line of Derik De Bruin with UBS. Please proceed.

Hi.

Hi, Derik.

Derik. Are you there? One moment. I’m not sure what happened. I am sorry, Derik, if you are on the line I do apologize. I’m not sure what happened. [Operator Instructions]. Okay, sir. You may proceed.

Okay. Looks like I got lost and stayed there for a minute.

Yes. Sorry about that.

Pretty much describes my week. So, what’s your stock options since guidance for the year, 2008?

Excuse me.

For 2008.

It will be similar to what it was for this year above $0.05 for full year.

Okay. And it looks like the corporate costs were a little bit higher than we were expecting. Is there a building for that to start coming down?

Yes. I think what your point is that category can kind of… it can move from quarter-to-quarter. We did have kind of some expenses go through there, so should we kind of stepping up our acquisitions program and incretion activity and just timing of kind of benefits. So, I think it was a little higher this quarter, a little lower last quarter but overall should move at a rate slightly lower than the growth of sales.

Okay. Great. You finished 2007 with basically a flat operating margin, at around 12.7%. You talked about 50 to 75 dips of expansion on an annual basis. What are you targeting 2008? Did we see that coming through this year?

No, Derik, this is Jeff. So, I think we do see it come through. I think we found in the fourth quarter that activity in and around ViaCell and some investments that we have made in the fourth quarter that activity in and around ViaCell and some investments that we have made including some product transitions, we would look more heavily on the operating margins. But given the investments we made in the back half of ’06 and ’07, we look we are pretty well positioned. I would suspect we are looking from 50 to 100 for the full year, probably starting a little bit more slowly, probably 50 to 75 for the earlier part, first quarter and maybe into the part of the second quarter. Just because it is going to take us a little while to get to ViaCell cost structure, right size and for the revenue continuing to grow in that business, so it is probably 50 to 75 for the first half and after kind of 50 to 100 range for the back half.

Great. That’s extremely helpful. I know you moved some of the ViaCell computer programs into operations. Can you talk about your plans on monetization of assets?

Sure. We have been actively involved. We have engaged a third party to help us market those assets, both the Via sites that women’s credit preservation fertility product and the USFC research program. That’s in the middle of a divestiture process. We are going to run an auction of assets and it is kind of proceeding according to plan.

I expect we have a view, an informative view at the end of the first quarter. It’s certainly not at the end of the second quarter, it is kind of outcome of that process.

Great. And just a couple of final questions. The organic growth rate in Life and Analytical science?

Organically, we are 7% for the fourth quarter.

Okay. And the other bit of vision, OE?

It was 19%.

Great. And finally the… you have noticed you had some pick ups recent in reagents, kind of kinase assays. I guess, how is this overall market doing in terms of the competitive landscape with the reagents? I am curious about how customers do business here. Is there a lot of share shift going back and forth? What drives new uptake of assays. I am just trying to get a little bit of feel for the dynamics here.

I think what drives it is, I think what you are seeing in the marketplace is you are moving from what I would say, general re-purpose reagents to much more specific purpose reagents. And so I think we dropped market share is if you have got the right reagent for the particular application, that is been run in the customer. That’s how you win the business and I think what we have been trying to do over the last year is to focus more of our R&D in those reagents and they can very… specific coupled with the acquisition we made of Euroscreen and the collaboration with Axim on flotina [ph] and so we have been trying to build these types of reagents around what we think are the higher growth prospects and so that’s what’s been driving, I believe are our growth and I think we are taking some share in the reagent market as a result of that.

Okay. That’s from Gilanixis [ph]. Is this the market, I mean considering what the pressures have been from pharma and from discovery, is this market a rapidly growing market. Is it stagnant or share loss going back and forth. I just… how much is pharma biotech spending on I guess new investments and great discoveries particular for the assays business?

I think you have got to separate it from assays and reagents and from instruments. I am of the view that there is still not a lot of increased investment, but only on the instruments side it is more of a replacement and now there are some techniques that they are investing in. So, I think the cellular emitting area is a place where there have been some incremental increased investment but overall I think that is flat, although on the reagent side, just continuing to be screened and done, and I would guess at that sort of a mid single digit growth rate.

Great. Thanks a lot and best wishes, Greg.

Thanks Derik.

Your next question comes from the line of Jon Groberg from Merrill Lynch. Please proceed.

Good evening. Thanks for taking the call and get the obligatory congratulations out of the way to both the… Greg and Rob.

Thanks Jon.

Thank you, Jon.

I just want to make sure since you said something there, so make sure I heard right, Jeff and I was you expect 50 basis points to 100 basis points of operating margin expansion for the year, for 2008?

Yes. And I think what I said is more on the line of 50 basis points to 75 basis points in the first half.

Right.

And probably a little more between the back half just by virtue of the fact that we are getting the ViaCell business integrated and working through the cost structure there.

Right. Just applying the revenue growth rates and that type of operating margin expansion assuming no other acquisitions and as you said keeping short counts hopefully flat you would be… I would have you at a much higher earnings per share level than maybe what you are communicating previously in terms of how dilutive ViaCell would be. Have you got more optimistic in terms of what you are able to do with ViaCell in ’08?

I think it is still early, in the honeymoon period here with the ViaCell business so, I think we finished 2007 very strong, from the revenue perspective and carry that momentum in 2008, so I would say it’s more come at the back of the existing business. But if you look at the kind of the range of our guidance and what I just communicated I think you will find what we said from the medium term perspective is probably not far off that.

And then you mentioned just in some of your comments, but no one’s asked about this Lab Services business which I keep finding intriguing given the One Source and the growth that you are having, and no one else really seems to be copying that model too much. And could you just make some comments about that business itself and how that’s developing specifically One Source, I guess?

Yes, this is Rob. So we continue to see a good growth in that business and demand. And I think probably the more exciting aspect is we’re seeing demand outside the biopharma area. Though, in the fourth quarter we actually were able to sign some contracts in the consumer products and food area. So I think it continues to do well for us and we got significant expectations for it in ’08 as well.

From a margin standpoint, have there been any kind of surprises or shocks as you’ve gone again on that One Source business or --?

No I don’t think so. If you recall, in the second quarter of ’07 we talked about some investments that we are making because of some big contracts that we had won. So the only issue from a margin perspective is sometimes when you win some of these large contracts there is investments required upfront. But our service business operating margins are above the Company average.

Okay. And could you just remind me, I don’t know if you said this on the call, it was garbled or if maybe you put out a press release I missed, I’m forgetting, but wasn’t there a discontinued operation that you guys have in there?

So there is two lines on the P&L, John. One is actually operating the two therapeutic programs of ViaCell. So, the results of that are on the loss from the discontinuing operations line, the first line. And the second line is actually loss and gain… it’s a loss on the disposition of discontinued operations and that is kind of the remnants of a settlement from a previous discontinued operations that happened a little while ago, kind of a one-off event, if you will.

Okay. And then on the genetic screening in the maternal health, you mentioned you’re still waiting for the PMA on the maternal health side. Any update at all as to when that may come through?

No, I think it still goes through our original schedule, which I think we communicated sort of late ’08, probably in the market, early ’09.

And just overall, there have been some announcements from some other companies on new types of tests that are being developed and how do you see your competitive position, how do you see new competitors potentially entering and what, what are kind some of the new tests either on the maternal or neonatal side that you guys are working on trying to introduce?

Well, I think we still feel very good about our competitive position, I would say. On the maternal side, our PMA is going to be focused around areas of pre-eclampsia, pre-time birth and intrauterine growth retardation. And a number of other tests, but those are probably the three key ones.

John, it’s Greg. Some of the other tests that you read about particularly sort of fetal maternal DNA and so forth, I mean some of those are fairly expensive kind of diagnostic tests. And most of what we do is screening and so we have the ability to process samples, a lot of samples in a very cost effective way, it reaches out as opposed to, I’ll call it, more confirmatory type diagnostic test which we do some of, in the spectrogenomics business, CGH rays on chromosomal defects. So I think as we look out and we look out towards the power of having positive indications, basically for protein levels, it’s an existing issue. And the ability to process these very quickly and the fact that this is very accepted over a long period of time in the clinical environment and the fact that the labs are set up to operate this way that there is a sort of, I call it tremendous sort of capability to that system as it is today, is very cost effective. So we don’t see a huge amount of threat. Having said that, we do have technology programs in most of these areas running and looking at these types of approaches which at some point down the road may be viable. And so we are investing in a number of these areas as well. But we see those as kind of longer term practical opportunities.

So, is it fair to say that on that piece of business your view of the world is that there will continue to be kind of the low cost screening of large numbers of patients and then more of the confirmatory types of tests, but those will be kind of few and far between potentially as opposed to a mass migration unless the costs get down to equal level perhaps but…

Yes, I mean it has to be a very simple procedure, but I would say, a slight variation on that, John, which is I think the low cost screening is going to continue to expand rapidly. Because, from a public heath standpoint, the cost benefit is very high. And so really, when you look at the penetration around the world, it is very low. As we talked about it on the neonatal side it’s only 25% of the world infants. And out of that 25%, most of them receive only one or possibly two tests, typically TKU. So we think there is tremendous growth within there because it is so cost effective even in developing countries and then you have got the rest of the population to be able to screen. So screening is kind of an early, it is just still an early developing market. And so first you screen and then screen… screening really becomes the indicator for them following up with the diagnostic tests. And I think that’s the only way the economics will work because you can’t really try to run diagnostics tests, it wouldn’t make any sense to run diagnostic tests on a large population sets.

Okay. And then last, just a very mundane question, Jeff, can you just tell us what your basic shares were, outstanding?

Basic at the end of the quarter we are about a 117 million shares.

Okay. Thanks. Congratulations.

Thank you.

Your next question comes from the line of John Sullivan from Leerink Swann. Please proceed.

Hey, guys, good evening.

Hi John.

Just to follow up on the genetic screen, on the neonatal genetics screening area, at one point I think there was talk about adding a second technology for neonatal screening with a concerned being that maybe some of the emerging parts of the world would be, might not have the expertise ready to operate the mass spectrometry based screening. And you thought that maybe that was an impediment to adoption. Do you still feel that way, is there a second platform being contemplated or how do you intend to approach this issue?

Well, you know, John, we do it both ways. We do sort of a basic fluorescent immunoassays and then we do multiplexing through tandem mass spec. Maybe what you are referring to is a vision that says, down the road, you may be able to put a much simpler kind of mass spec instrument out there, because a lot of mass specs are really driven by the research marketplace, where there have a lot of different capabilities and in the diagnostics marketplace, it’s just the same measurement over and over. So it’s a much simpler kind of more value based product. So I think there is potential on that front. The technologies really aren’t that expensive, I think, at the end of the day, with the potential that would sort of take the instrumentation cross down.

Okay. So, investors should view the current technology as able to facilitate the growth that you are looking for in some of these emerging markets in neonatal screening.

Yes.

Okay. Fair enough. And then shifting gears for a second, regarding digital flat channels for X-Ray market, can you just talk for a second about how, how far into that opportunity you feel like we are… how much of that market is turned over from film methods to digital and just kind of give us some sense of, at what point in that opportunity, you feel like you are.

So I think overall, we are in the early stages of it because, if you think about it today the digital flat panel, digital X-Ray detections are still pretty expensive items. And so really it’s just hitting the high value applications. Over time, as volume grows, kind of back to Jeff’s earlier point, as volume grows, then the cost per unit goes down. So it’s not dissimilar as you think about microprocessor world, depending on, where if the cost went down, they became much more ubiquitous. And so we see that happening. So really it started with sort of high valued medical diagnostics, and then it went sort of opened up in the therapeutics side and then increasingly you find another associated medical, what is veterinarian and dental and then you have the whole non-destructive marketplace, whole non-destructive testing marketplace which I think at the end of the day will be the largest market. Larger than the medical marketplace in that really hasn’t even been touched. So, one I think there is a lot of room to go in medical and you will see more in kind of… more value based instrumentation, portable instrumentation, a lot of market able to go out there and then you will see this whole unlocking of the non-destructive so, as far as we are in Life and it’s on a lifecycle we think it is very early days.

Is there a competing technology in the non-destructive market that you look at as kind of the current holder of major share and where did your Alactryx have to come down to in terms of price in order to compete well?

So there are a number of different imaging technologies used today, everything from film, the CCDs to charge couple of devices to number of other capabilities that are out there, so there isn’t one particular magic number. I think what happens is as it continues to come down, we will see it for example in security applications. We don’t see much of it today, right and then you will get into sort of online inspection and part of this is not only sort of the cost per unit but part of it is actually the technical capability. So, non-destructive testing has some of the most challenging requirements because people want to do an online inspection. For example, aircraft parts or engine blocks or something that as they come down the line they want to scan every one of them and you are basically set up a certificate of origin and inspection for that part as it comes through, so I think you will see kind of a higher value product. In the component level we catch it first and then continue to move out through there so you might think… you might see an aerospace easy, you might see a security easy and a number of those more quickly in a number of those applications.

Very helpful. Thank you.

Yes. You are welcome.

Your next question comes from the line of Vivek Qana from Civic Global Healthcare. Please proceed.

Hi, good evening. I just had a question on the margin. How much did ViaCell affect the operating margin on a percentage basis?

Somewhere around 50 basis points.

Okay. Thanks.

You are welcome.

You have a follow up question from the line of Derik De Bruin from UBS. Please proceed.

Yes. Hi. What’s the… when you look at the net interest expense for 2008, what are you targeting?

Well, I think we are in the middle of that right now Derik, in terms of looking at the credit markets, the game plan we currently have a bridge facility in place that will expire in March that we are kind of looking at… taking that bridge facility here with some permanent capital. So, I’ll just give you an idea here and that number probably goes up to somewhere around, somewhere between $25 million and $30 million.

Okay. That… Okay. Good talk. That kind of I was looking at that… and you've got that other, that other income expense line that kind of fluctuates because of the FX impact and it is, 1315 a general good run rate for that

Yes. It’s somewhere… in some quarters we do better and in some quarters we do a little worse depending on kind of what the currency markets do. but, between 1 and 1.5 the quarter’s probably not bad.

All right. Thanks.

You're welcome.

Your next question comes from the line of Craig Leighton from Lord Abbett, please proceed.

Hi, I know it’s getting late so I’ll just two real quick ones.

No problem.

Does the guidance include the pediatrics laboratory acquisition?

No. It doesn’t at this point, but we expect that to be more or less neutral or near one.

Okay. And to close in the first quarter at some point?

Depends on regulatory approval. But we would hope it would.

Okay. Terrific and then, are you still expecting ViaCell to be dilutive by $0.03 to $0.05 next year?

Yes.

Okay. Terrific. That’s all I have. Thanks.

Okay.

At this time, we're showing you have no further questions. I would like to turn the call back over to management for closing remarks.

Great. Okay. Thanks everyone for your participation and interest in PerkinElmer, we appreciate it. We had an excellent fourth quarter and are well positioned to sustain the growth of our business in 2008. This call is adjourned. Have a great evening. Thank you again.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Good day.