Good day, ladies and gentlemen, and welcome to the quarter four 2009 PerkinElmer earnings conference call. My name is Jeff and I will be your operator for today. At this time, all participants are in listen-only mode. Later we will facilitate a question-and-answer session. (Operator instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Dave Francisco. Please proceed, Mr. Francisco.

Thank you. Good afternoon and welcome to the PerkinElmer fourth quarter 2009 earnings conference call. I’m Dave Francisco, Vice President of Investor Relations and Treasurer for PerkinElmer. With me on the call are Rob Friel, Chairman and Chief Executive Officer, and Andy Wilson, Senior Vice President and Chief Financial Officer. If you have 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 webcast live and will be archived on our website until February 18th, 2010. Before we begin, we need to remind everyone of the Safe Harbor statements that we've 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 the most 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 GAAP in that attachment, we will provide reconciliations promptly. Please note that references made to continuing operations in our earnings press release issued earlier today and during this call includes the reintegration of our Photonics business, representing a portion of our specialty lighting business that we discontinued in the fourth quarter of 2008. The photoflash business remains in discontinued operations. I'm now pleased to introduce the Chairman and Chief Executive Officer of PerkinElmer, Rob Friel.

Thank you, Dave. Good evening and welcome to our fourth quarter earnings call. I’d like to begin the call by saying how pleased we are with our performance in the quarter which capped a solid year for PerkinElmer. In a moment, Andy will go into more detail on our financial results. But first let me provide you with an overview of the fourth quarter. Turning first to the financials, we continue to see sequential top line improvement across the Company and solid profitability and cash flow performance. Both our revenue and EPS were ahead of our expectations as we experienced improvement in all of our end markets and benefited from our robust pipeline of products, introducing almost as many new products in 2009 than we did in the previous two years combined. In addition, our solid financial performance in the fourth quarter, we also made significant strides in driving growth opportunities in attractive end markets, investing in innovative technologies and continuing to expand our global footprint. In Human Health, during the quarter, we expanded new born screening in China through our recent SYM-BIO acquisition and also advanced adoption and capacity of first trimester pre-natal screening, setting up national labs in New Zealand, the Philippines, Vietnam, and Malaysia. We leveraged our genetic screening technology in the child health with the launch of our new Steroid Profiling Kit, which is the first commercially available kit designed to help diagnose hormonal imbalances in endocrinal based diseases. During the quarter, NTD Labs joined the Aetna Network, becoming the first exclusive provider of a first trimester Down Syndrome screening protocol using the free-Beta hCG biomarker. We also made excellent progress with our continued investment in diagnostic and research technologies. In diagnostics, we launched the only first trimester test available for early onset Preeclampsia in Europe…

Thanks, Rob, and good afternoon everyone. I will now provide some additional color on our fourth quarter results and after my prepared remarks, we’ll open up the call for questions. Before moving into the financial details, I would like to clarify that whenever I talked about a particular measure being up or down, I am referring to an increase or decrease net measured during the fourth quarter of 2009 compared to the fourth quarter of 2008. As rob mentioned earlier, we are pleased with our financial performance in the fourth quarter and for the full year as we were able to deliver a solid earnings and cash flow performance. Revenue for the fourth quarter was flat as compared to the same period last year. The favorable impact of foreign exchange was 4% and the favorable impact from acquisitions was 1%. Therefore, organic revenue was down 5% versus the prior year. The remaining analyses in my prepared remarks will be presented net of the favorable impact of foreign exchange and acquisitions. By segment, organic revenue declined by 5% and 6% in the Human Health and Environmental Health segments, respectively. By geography, organic revenue in the Americas declined at a high-single digit rate and organic revenue in Europe declined low-double digit. Although we experienced sequential improvement in Europe, the Americas and Europe continue to be impacted by economic challenges as well as delays in the release of stimulus monies. Organic revenue in Asia grew double digits with all major product lines contributing to the growth. Within the Asia region, organic revenue in China and India both grew well above 20%. From an end market perspective, PerkinElmer’s Human Health segment represented approximately 39% of total revenue in the quarter. Within Human Health, we serve two end markets, diagnostics, which represented 21% of total…

Thanks, Andy. Operator, at this time, we’d like to open the call to questions.

(Operator instructions) Our first question comes from the line of Isaac Ro with Leerink Swann. Please proceed.

Hey guys, this is Jeff in for Isaac, thanks for taking the question.

Hey Jeff.

Hey. I was wondering if you can talk a little about the medical imaging business, I remember coming out of 3Q you thought the back half of the year was going to be worse than the first half. Now you are kind of seeing improvements to go through – I mean GE put up some decent numbers. What are you guys seeing there that’s making you a little bit more confident and I mean you said (inaudible) growth for organic business for the year or just to grow at some point organically throughout the year.

So I would say we are seeing improvements probably across all the end markets in medical imaging and clearly there has been some recovery in the capital expenditure in hospitals and so I would say we will see growth for 2010. It probably won't occur at the sort of the middle of the year though and I think we will grow for the full year but we probably won't see positive growth in this business still probably the middle of the year. Part of that is because we do have a difficult comparison in Q1 and as we talked about it before, it was more of a function of how our ordering and contract patterns work so that the – our customers, it was difficult for them to take their orders down in Q109 as rapidly as what’s happening in the market. So we are still I would say artificially high in Q1 of ’09 and we are going to cycle up against that. But we do think we will return to positive growth probably around the middle of the year and we do think we’ll see positive growth for the full year in medical imaging for 2010.

Alright thanks, and switching gears real quick, you talked about how China was kind of a bright spot not only in food safety but Environmental and quality as well. Can you talk about like how big of a portion of the sales you guys have over there and what types of investments you are doing? I mean you talked about investments, you mean mostly Greenfield or are you guys going to do some Brownfield as well?

So, China for us actually exceeded $100 million in 2009. So, call it 5% of our revenue and it’s a little bit of both. As you know, we made the acquisition of SYM-BIO at the end of last year and they were in the process of building a fairly significant increase to their manufacturing capacity and so that’s coming up online. We’ll probably have that operational by the second quarter. So, we are investing not only in real estate but also in people, increasing our capabilities there from a leadership and an employee perspective and we are starting to put more and more R&D investments into China as well. So, across the board we’ll put fairly significant investments in that part of the world.

Alright, thanks a lot guys.

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

Alright, good afternoon. Nice quarter.

Good afternoon. Thank you.

Hey, Rob, would you – when looking at the kind of the pacing of demand as you went into the fourth quarter, did you see anything – was it steady all the way through or – we’ve heard some people say that December got kind of slow for Europe. Well what did you see?

Well, I would say it differs a little bit by end market, but I would say probably on the Environmental and Industrial side we saw increasing demand as the quarter went on. I would say in the area of research, it was fairly steady and if anything we saw a little bit of a dip off on reagents actually at the end of the quarter, but we think that may have been some timing and also because some labs, particularly on the reagent side may have shut down between Christmas and New Year’s. As I mentioned before, I think on the medical imaging side, we’ve seen continued improvement through the quarter there. So I think it varies a little bit, but I would say overall, the bias has been to an improving trend during the fourth quarter in a majority of the end markets.

And then with respect to the high end instrumentation and kind of the visibility of maybe a pickup in Q2, is it just because the orders are now starting to come in that you feel that way or – give us a little color on that?

Yes, I think that’s probably the reason, and again I don’t – I wouldn’t suggest it’s robust growth, but I think clearly things have improved. We did see improved order patternings [ph] as I mentioned towards the end of the fourth quarter and they seem to be continuing in January as well. So, we feel a little bit better about the recovery occurring in those end markets. But as I said it’s – I wouldn’t say it’s robust, but it’s clearly going in the right direction.

And then with respect to your guidance of 2010 I mean mid-low-to-mid-single digit organic and 50 to 100 bps of operating margin improvement, on the chance that organic revenue growth may be accelerates a little higher than that, how much extra leverage do you think that you might be able to get or are you – would you take the opportunity to may be further investment in some other areas.

I think we need to do a little bit of both. I think on the incremental side, I think it would create a fair amount of operating margin leverage as we took cost out in 2009. Some of that was volume related, but I think some that will be sort of systemic and improve our cost position. So I think we would get very good leverage on any incremental revenue growth beyond our forecast. Having said that, while we clearly (inaudible) through the bottom line we see opportunities to invest and the way we’ve tried to build our 2010 operating plan is with sort of gaited [ph] view of investments. So as we see the growth I think we’ve – hopefully have been conservative from a top line forecast and to the extent that we see higher growth, some of that will flow through, but some of that will clearly be invested back in the opportunities we see to continue to expand identities, adjacencies we talked about and also to drive innovative new products into the marketplace.

Alright. Hey thanks.

Yes.

Our next question comes from the line of Rob Hawkins with Stifel Nicolaus. Please proceed.

Thank you for taking the call.

Hi.

May be just to follow on the last piece, in terms of the acquisition front, in how you characterized your pipeline right now and what sellers’ attitude are with related to price and on that gaited view there has been some pickup in semiconductors, may be even in clinical, is it – are you at a point now where you think you feel comfortable may be even expanding into the industrial and some of these segments real faster on the Environmental side?

So, on the first question, I think our acquisition pipeline we feel good about. It’s a – you’ve got to look at a lot and already got a couple done, so I think it’s a pretty robust pipeline. I would say seller evaluations, I don’t know that they have changed significantly over the last couple of quarters and I think it’s always – if you are looking at good properties you are going to have to pay good prices. So, I would say there hasn’t been a significant change there. As far as increasing our investments into the industrial area, I think what we are trying to do is be more and more focused in those end markets and those application where we see the highest growth prospects. So, I think if we saw higher revenue and we wanted to do some more investments I would say the industrial area would probably not be an area of significant focus for us. We’ll probably be in some of these areas like the food safety, like the Environmental area. I think we’d probably see the investment before some of the industrial areas.

Okay. And then on imaging I am just curious your senior report flow picking up but in January or now are you seeing any loss in momentum because of some of the uncertainty around legislation per se with physician fees how performed?

You know we have – I mean it’s – I mean obviously it’s very early to see if that change as a result of say healthcare reform not passing, but I would say we haven’t at this point where we continue to sort of keep a close eye on that, but we continue to see pretty good ordering patterns improving in the medical imaging business.

Okay great. Thanks. I will jump off in the queue.

Okay.

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

Good afternoon. This is actually Eric [ph] filling in for Peter. On the imaging business is there a certain amount of lag time that you guys see between say a General Electric saying that their demand is improving any time and that actually really starts to impact your or their orders from you significantly?

There is a little bit of lag between – obviously when they start taking up their orders and then obviously to the extent that they see the revenue and we see the revenue, but presumably to the extent that their revenue is doing well, we’ll see a little bit of lag to that, but not that lag to that, but not that significant.

Okay. And then on the environmental testing, is there – are the labs out there are they kind of reaching a point where they really need to upgrade instruments in order to operate their business efficiently or is there room for them to still maintain say a piece of equipment, one, two, three years more and still be able to operate at a level that’s okay for them.

Well you know it obviously it depends a lot by the individual lab, but I would say it really gets down to buying. I mean I would say from – if their volume increases fairly significantly, I think that’s really what’s going to drive the demand, the volume through the lab. Most of the labs I think – they are not in an obsolescence issue relative to the instruments. It’s really more of a volume driven need for the increased capital.

Okay great. And then a final question on the diagnostic business. Is there anything on the horizon whether in the U.S. or outside the U.S. that would drive an uptick in demand, are there new assays or new provisions that will be tested for or anything like that in the – legislation wise?

Well you know I would say there is always continued new products and new assays we are coming out with, we mentioned the (inaudible) health and a number of other areas and the prenatal area. But I would say we really look at that as sort of continuing product (inaudible) into the marketplace to continue to achieve the growth rates that we’ve seen in that business. So, I don’t see anything right now that’s really a step function change in the amount of screening that’s been done. We do believe that probably in two years we may see a step up in the recommended number of tests for a new born trainee [ph] going from sort of around 30 now probably stepping up to probably close to 50, but we probably think that’s 2011 timeframe.

Now, would you be prepared for that step up or do you have to kind of develop those assays–?

No, no, we will be prepared for those step ups.

Okay, great. Thank you very much.

Okay.

(Operator instructions) Our next question comes from the line of Derik De Bruin with UBS. Please proceed, sir.

Hey, good afternoon.

Good afternoon.

Just for some housekeeping, you said you’ve reintegrated part of the business you had put into to ops and obviously that looked like it had about a $5 million or so impact relative to what the base was for the prior quarter – for the prior year quarter. Can you say what you put back in and also what’s the right revenue base that we should model off of for Q1, Q2, Q3, and Q4 or Q3 just to make sure that – otherwise we are going off – if the numbers are going to be higher for that, I just want to make sure that we are all – everyone is modeling correctly.

Right okay. Do you have those numbers right there, Andy.

This is Andy. The impact year-over-year was about $0.02. It was about $7 million of revenue as a negative impact year-over-year. I think going forward, we assume from an EPS perspective it’s going to be fairly neutral, may be slightly positive, but I would say modeling at that neutral level is probably the best way to go.

Okay. I just was saying that – okay, what is the – I mean do you have the Q1 number, just as a starting point? Is it about similar like a level – similar like about $5 million difference?

But, we actually put the history on the website today – with all the details there.

Then I will shut up and I don’t have it. That’s pretty much irrelevant then. Okay. I guess just what’s your biggest I think – what do you see the biggest challenge in terms of potential pitfalls on the quarter or potential for (inaudible) of how the year rolls out? I mean obviously we think there is a lot of opportunities in terms of things rebounding I guess how is the biggest thing (inaudible) just the ramp (inaudible) or is there something else out there?

Yes, I think – no I think that’s right. I mean as we think about 2010 based on I would say the visibility and the order patterns we are seeing, it looks like the first half will trend pretty well. I think there is at least some concern that when we get into the back half of 2010 there is clearly some risk that we could sort of dip back down if you start to remove some of this government support I will call it globally. And so I think we are little cautious about that relative to the back half and I would say that’s the biggest risk I see out there right now for 2010.

So, when you were at the – let’s say one of my competitors’ conferences earlier in January, you had put up some long term operating margin targets.

Yes.

Could you just talk about that type of outlook for the Company, it’s like a 400 basis point op margin expansion if I was correct in saying that and I guess what are the kind of drivers of getting to that level of improvement.

Yes, I will start and let Andy sort of pick up on that because that’s some – he’s been spending a lot of time I would say in the last couple of weeks. But, obviously the operating margin expansion it’s got to come first of all from some volume leverage, but more than that, we are looking at our cost structure across the Company and I would describe PerkinElmer as if you look at historically, I think we did a lot of things within the businesses to improve the cost structure in trying to be very efficient, but we haven’t done historically a lot I would say across the Company because it was ran I would say more as separate businesses as an integrated company and I think as we look at some opportunities across the Company whether it’s back office types of things, whether it’s sourcing, whether it’s things we do, and some of the various functions that we think there is some opportunities to drive incremental cost reductions. So those are just some of the things I think that we are looking at over the next couple of years. But I don’t know, Andy you want to be a little more specific–?

That’s right. I think we’ve got several groups that are focused on specific areas that are kind of corporate related whether it’s – as Rob mentioned – whether it’s around low-cost sourcing, whether it’s around back office consolidation which are service opportunities, channel efficiencies within selling organization, there is a team focused on each one of those and we are looking at this kind of over the long term so we can develop some significant but consistent and sustainable long term margin improvement. So I think if you look at the 13 to 17 and we are successful in all these initiatives, I would be disappointed if we didn’t work better than that, but I think that’s a – the 17% is a reasonable target at this point.

Great, thanks.

Our next question comes from the line of Jon Groberg with Macquarie. Please proceed.

Thanks for taking the call. Rob, as you think about 2010, where are you investing in your business?

So, I would say we are focused a lot on sort of improving the growth profile of the Company and so as I mentioned before we are putting some additional cost into the technology side of things and as you saw in 2009, we stepped that up as a percentage of sales. I think clearly the global footprint in the emerging areas are areas that we want to continue to invest in and SYM-BIO was a good example of that. And I would say from an end market perspective, while we like all of our end markets, I think clearly the diagnostics side is probably the area that will probably get some disproportionate side of our investment dollars just because I think we like the characteristics of that end market better.

And there are you talking primarily as to about R&D or even on kind of more of the kind of the commercial structure?

Probably not commercial structure other than through an acquisition other than building, because I think we are pretty comfortable with the commercial structure and our distribution capability today, so I would say it would be R&D but also it would be licensing, acquisitions, what I would call inorganic opportunities as well as investing in the Company.

And are you taking – we’ve heard a lot of companies talking about making major investments again in kind of ERPs to improve efficiencies, is that something on the horizon for you or what you guys–?

Yes, I mean that’s – we’ve been doing that for at least the last 12 months, but we continue to invest in the infrastructure of the Company and we – in 2009 we did actually what technical upgrade of our SAP platform and we are putting on some additional modules and other things to really sort of drive the efficiency across the Company.

And where might you have incremental hires in 2010?

I think the incremental hires will probably come in the R&D side and probably in the selling and marketing area.

Okay.

That will be the area of focus.

And then just big part of kind of the proposition that you laid out as a few people have asked on the margin expansion, if you think about just as a year, outside of volume, kind of what would get you the more the 100 basis point expansion versus 50 basis point or is that pretty much all just wherever revenue comes in for the year.

It’s volume but it’s also mix. A big driver of our – at least our gross margin is what the mix looks like because clearly if it’s more on the reagent side, that really drives it higher. So I think it’s a combination of volume and mix. If we are talking specifically about 2010 may be some of these plans that Andy talks about we start to see some benefit toward the end of the year, but I don’t know that that will be a big driver to 2010.

Okay. Great, thanks a lot.

Okay, thanks.

Ladies and gentlemen, that concludes the Q&A portion of this call. I’d now like to turn the call over to Mr. Rob Friel for closing remarks.

Okay, thanks Jeff, and thank you for your questions. So, in summary, PerkinElmer, I believe, has innovative technologies to global scale and probably most importantly to people to play a real critical role in improving the health and safety of people and the environment through our focus on providing better detection and therefore prevention of environmental contaminated disease. We feel confident that our focus on driving growth opportunities in the attractive end markets, investing in innovative technologies, and generating attractive financials will provide a good return to our shareholders. I thank you for your participation today. This now concludes today’s call. Have a great day.

Ladies and gentlemen, that concludes today’s conference. Thank you for your participation. You may now disconnect. And have a wonderful day.