Ladies and gentlemen, thank you for standing by and welcome to the Q1 and Fiscal Year 2008 Earnings Release Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. Thank you. I'd now like to turn the conference over to Mr. Joshua Young, Director of Investor Relations. You may begin.

Thank you Heather. Good evening. I'd like to welcome everyone to Millipore's first quarter 2008 earnings conference call. My name is Joshua Young, Director of Investor Relations for Millipore. Joining me speakers on today's call are, Martin Madaus, Chairman, President and CEO, and Charlie Wagner, Chief Financial Officer. In addition to the earnings release we issued earlier today, we'll be referring a slide presentation as part of today's call. The presentation can be viewed by clicking on the webcast link on millipore.com homepage, or by accessing Millipore's Investor Relations website. A PDF copy of the slides will be posted to our website after the call. We'll also be highlighting non-GAAP information. A reconciliation of our non-GAAP... of our GAAP financials to our non-GAAP measures is included in our earnings release and posted on our website. Before we begin, I'll make the usual Safe Harbor statement that during the course of this conference call we'll make projections or forward-looking statements regarding future events or the financial performance of the company that involve risks and uncertainties. The company's actual results may differ materially from the projections described in such statements. Factors that might cause such differences include but are not limited to those discussed in today's earnings release and in our Form 10-K as well as other subsequent SEC filing. Also note that the following information related to current business conditions and our outlook as of today April 30, 2008, consistent with our prior practice we do not intend to update our projections based on new information, future events or other reasons prior to the release of our second quarter, 2008 financial results. Now, I would like to turn the call over to Martin Madaus.

Thanks, Joshua. Let me begin covering the highlights of the first quarter. So overall, the first quarter was challenging, but was not surprising. Excluding changes in foreign currency our Bioprocess Division reported a decline in revenues and continued to be adversely affected from a handful of large U.S. biotech customers. This performance that in contrast to out Bioscience Division which delivered solid performance in the first quarter. During the quarter we adjusted to the temporary slowdown in bioprocess by controlling our overall spending and driving efficiency improvements throughout organization. These effort enables us to drive meaningful earnings and cash flow growth in the first quarter. Our non-GAAP earnings per share grew by 8% and we increased our free cash flow by $40 million over the first quarter of last year. I consider this to be solid performance, when you consider the challenges we are facing in bioprocess and the fact that the first quarter has historically been our weakest quarter of earnings and cash flow performance. Even environment while we are seeing much lower organic revenue growth, we are still managing the business to drive profitability and positive cash flow. When our Bioprocess business returns to a normalized revenue growth rate, something that is inline with its average organic growth rate over the past three years, we expect to see a positive impact on our financial performance. There are no new trends in our bioprocess business to report. Our revenues continue to be adversely affected by the same dynamics that began in the third quarter of 2007 and which we've spoken in detail about at our last two earning calls. We are seeing lower spending from a handful of our large U.S. biotech customers as they continue to actively reduce their raw material and finished drug inventories. As a result,…

Thanks Martin. I'll now provide some additional details on Q1, 2008 financial performance beginning with the discussion of our GAAP performance in the quarter. So, as previously mentioned revenues grew 7% over the last year with 8 percentage points of growth coming from changes in foreign exchange rates. Our GAAP operating margin increased to 14.5% up from 10.6% in Q1, 2007 with the most significant driver of the increase being the absence of acquisition and integration related charges during the first quarter of 2008. Our earnings per share were $0.59 a $0.10 increase over Q1 and as a reminder Q1 2007 GAAP results benefited from a $9 million reversal of the tax reserves. On the next slide we show our Q1 2008 non-GAAP operating results. I'd encourage you to review the non-GAAP reconciliation table in the press release for the detail of our adjustments. Martin already provided divisional views of our revenue dynamics, I'll add some color from the geographic perspective. Excluding effects of foreign currency translations, revenues in Americas declined 11% in the first quarter due to the softness in U.S. Biotech accounts. Europe increased 4% and Asia Pacific revenues grew 12% in Q1 2008. Our Q1 2008 non-GAAP gross margin of 53.7% was down 160 basis points on a year-over-year basis largely due to the appreciation of the euro and also partly due to lower volume of manufacturing in our bioprocess division plants. Non-GAAP SG&A expenses represented 28.3% of sales, compared to 28.6% in Q1 '07 an improvement of 30 basis points. Non-GAAP R&D spending represented approximately 6.3% of sales, a decrease of approximately 100 basis points over Q1 2007. We have adjusted to the temporary slowdown in Bioprocess by controlling our overall spending and driving efficiency improvements throughout the organization. This is included delaying some discretionary spending…

Heather, please assemble the Q&A roaster. Question And Answer

[Operator Instructions]. Our first question comes the line of Tycho Peterson with JP Morgan.

Hey good afternoon.

HI Tycho.

Maybe just following up on your comment a moment ago, Charlie about the maybe rationalizing R&D a little bit, can you give us a sense as to how you are seeing should we think about the spend over the course of the year. I mean is there broader R&D rationalization after happening here or is it, just kind of a short term anomaly that you are working for a couple of quarters. I guess the question is what's the reasonable run rate for the year?

Yeah, I would say that you can't draw a reasonable run rate conclusion from Q1 couple of factors there. Q1 of last year was an especially high quarter for R&D spend associated with some of the products that are now launching in the Lab Water business so that just affect the comparison little bit. And then also in the Q1 of this year we have managed a little bit of discretionary spending from a timing standpoint. So, you shouldn't necessarily look at Q1 as indicative that way we're committed to continuing to invest in the business to drive innovation. And R&D levels should be relatively consistent with what they have been in the past.

Okay and as we think about some of the strategies, lay down the path around putting... I think you talked about that has a portfolio being kitable at some point and may be just with the commentary made on Guava are there obvious opportunities around that collaboration to poke to other consumables and we know where we think we are in terms of percentage of the portfolio that you've been able successfully drive forward?

Yeah, we've never given a clear indication that portfolio could be kitting [ph]. I mean we're moving towards that but I wouldn't count on have of the bio science portfolio. There is a tendency for customers to adopts kits faster because its easier to use and as we see opportunities to combine it. We'll move more towards kits. There are two examples of kits one is our Illuminex business where averaging is basically and a kit and we're expanding those businesses and are growing well. So that's an indication that kitting is a good strategy and for Guava this is brand new and as we enter Q3 we'll be more specific on how many kits will launch but all these products will be kitted, but I am not going to say its 50% or 40%, its just a general trend in the market and its driven by providing the customer with a solution that's easier to use. That's how you should think about it.

And then just finally on the competitive landscape given that we saw GE pick up a lot I mean can you give us a sense to whether there is an opportunity there in your view to gain some sharing where the obviously that goes a lot maybe?

There is a little bit of overlap with the former Whatman [ph] business and whenever they say there is an acquisition, there is a degree of disruption in the target and so of course that can be exploited but we didn't see Whatman [ph] as a really strong player in the market and really not a core competitor. So, it has a little impact on us.

Okay. Thank you very much.

Our next question comes from the line of Jonathan Groberg with Merrill Lynch.

Hi good evening. Thanks for taking the call.

Hey Jon.

Good evening.

Just following up on your discussion about process you started to launch into why you felt more comfortable at the rebound in the second half but then I just I heard things still this easier comparisons and then you expect stabilize revenues but necessarily an uptake. Is there any progress or is there anything that can be done to work to better forecast or work with your bio-process customers so that you actually get them to commit the certain levels of those spending is that all in the table or something that you could do?

Yeah, this is a very good question and that's exactly what we are doing on an on-going basis trying to get to a much better visibility going down to plant level forecast, shift level forecasting and really understand how we can reduce some of the uncertainty which I know you and your colleagues don't like it. Its unfortunately, you can improve it a bit but there is a level of unpredictability which is a nature of bio-tech that makes customers to adjust forecast or you may get a forecast one quarter but then you then it will be downward adjustment that can impact your revenues in that quarter. So its always difficult to predict it exactly right by the quarter and I always encourage people to look at the underlying long term trends because this is really a long term business and one quarter can be almost meaningless. So we are trying to be as transparent as possible but and we will improve it over time but fundamentally this is a business that can change quarter-to-quarter. It's just the truth.

For having said that are you or as you ended the quarter or are you getting any indications from some of these big US customers that they have may be worked through some of their inventory issues or are getting to a point that you are hearing some communication that makes you feel like more comfortable in the second half of the year.

Well with this there is number change from the previous call and we are counting... we are not counting on major uptake as I said in the second half, we think it will stabilize so in our guidance and our financial forecast we assume that utilization. And increase from the other accounts so as that changes and better news we would update of course everyone but at this point we just assume stabilization and not another major uptake.

But are you starting to see a name and in my question is are you starting to see some sense that it is stabilizing or will stabilizeI am just wondering are you hearing from the ground level any thing that gives you comfort in your forecast that it should stabilize?

Yeah I mean there is an end to it, I mean the major pharmaceuticals we are talking about they are growing and they are not just growing as fast but if there is no change they are doing fine with a few notable exception about overall the categories doing fine and we are seeing really good pipeline activity and we are seeing a lot of activity around our new products being evaluated for we expect into the pipeline. So the industry itself actually I would say has become more I think more promising for the future because of the increase in the pipeline. But the short term our focus is still hasn't changed from few months ago. So I would say it's leveling out.

Okay, and then shifting to the bioscience division. I think second quarter where you talked about label order and drug discovery have you really mention life and you talked about after and you didn't mentioned life sciences are stand out. Is there any kind of where do tell you are in terms of having a sales force that's fully educated enough speed and maybe getting that to be a division that you talk about in terms of been adding more to growth on the bioscience?

When you look the contribution from bioscience its much bigger and hence actually increased over last quarter. So it has become much more meaningful overall for Millipore into much more much larger bio science business that has impact I would say. And ...

Talk something specific about the life science?

Life science is a substantial part or largest part of the bioscience division. And we have good growth overall in reagents and certain substance have done pretty well. And sales was execution is good, but its like an orchestra, you need new product, you need a very good supply, you need a strong website, you need a good sales force and you need global presence. So in all these five or six different elements or levers to drive sales will be made major improvement. So its not 100% yet but its again quarter-over-quarter improvement. And again Q1 '08 was another quarter-over-quarter improvement so we are on track with that business.

Our next question comes from the line of Jon Wood with Bank of America Securities.

Hi, thanks a lot. Lab Water grow materially ahead of the 6% bio science rate in the quarter?

They grew although faster but we don't really break it down quarterly growth rates but they grew... I mentioned it because they grew very well in the quarter.

And then it just I term of the geographic dispersion would you say there was any material difference in the growth rates US, Europe and Asia in Lab Water?

Asia was growing in Lab Water, we would have to look that up, and we don't break this our... at that level of details but Asia overall in bio science has brought well again.

Okay. And then Charlie, what do you have on the guidance in terms of the effects benefit to EPS for the full year now, how does it compared to the initial projection?

We... so we haven't updated the guidance at all as I mentioned there was two sense of benefit in first-quarter relative to what we had given at the be ginning the year obviously if currently rates hold there will be additional benefit over in subsequence quarters during the year as I mentioned is also a variety about other costs and other decisions yet to be made, so if you cannot put that together at this point early in the year we're just not changing the number and if we need to change it later in the year we will.

Understood, so basically the benefit at today's exchanged rates is effectively in your guidance? Correct.

Sure, yeah.

Okay and then wanted to know have you guys been active in revealing strategic acquisitions and if an appropriate opportunity will be present this year, do you think you have the capacity to do a deal?

Absolutely, yeah. All depends on the what the deal is and what the size is, but yeah absolutely.

And you would be comfortable with issuing stock for transaction if you needed to?

I am not willing to discuss the financing strategy for a hypothetical deal. So I would say let's leave that kind of discussion to when we come to actually the transaction.

Okay, thanks a lot.

Thanks, John.

[Operator Instructions] Our next question comes from the line of Tyco Peterson.

Thanks for taking the follow up. Just on the manufacturing side, I mean it sounds like obviously there is excitement about the disposable opportunity going forward, can you give a sense as to how big you think that business could be, may be just in terms of a percentage of the provision if you want over the next year or two, and then also MilliPROBE, if there is any update now that you have begun shipping the initial asset?

Yeah. And as a percentage of the division.

Well. however you want to identify the market opportunity, it would be helpful to know where we are in the adoption curve of the disposables?

We are in the early growth phase as the market is converting more over to these first individual products and now more and more to complete solutions, which are these complete assemblies with filters back connectors and valves and I think we are in the early stage and the market is estimated to be between $300 million an $500 million probably worth and we think that the major players are growing at least 20%. So this is a growth market at far outstrips other markets and the opportunity for us is to combine the various capabilities that we have assembled and provide the solution from one supplier. Today most of the other competitions, actually everyone has to go to multiple suppliers and kind of assemble at customer [ph]. Our goal is to do it from one supplier. So we're coming out this year with a number of new products and assemblies which will quite be competitive and unique. Our goal in this growing market is actually to outpace of the market and grow faster and grow market share because if you remember from previous calls, we are not the market leader in this segment yet, but we will be in a few years. So translating this into revenue will be meaningful. I don't know what percentage, right, from the top of my head, but it's something important for you to track and because we're making investments and we're getting tractions in the market right now. We could actually sell more if we have more capacity right now.

Okay. And then in terms of process motoring, I mean both the MilliPROBE and you talked about some of RFID products --?

Yeah, MilliPROBE is in customer.. few customer trials right now. And as you know, these products are extensively tested before they are fully adopted, but that's pretty much on track. RFID, there is no needs really, that's kind of... I see it more product feature that we add to our line up.

Okay. And then just actually one more on pricing. Can you give us a sense as to whether there is pricing increase on the life science business or more broadly speaking, in biosciences at the beginning of the year?

It varies very much by geography, but overall I'd say there is a slight net price increase that you can obtain in a year overall.

Okay. Thank you.

Our next question comes from the line Derik De Bruin with UBS.

Hi, good afternoon.

Hello

Hi, Derik.

Martin, I was a little surprised to see or try or surprised to see the decline sequentially in interest expense given away $40 million with pay down of debt. Would it just be overall decline in interest rate? I guess, you just gave us some guidance for what you are seeing for interest expense for the full year.

Derik, we haven't given out guidance for interest expense, but could you state the beginning of your question., I didn't quite follow it.

No, I just was... I mean, I looking at what.. the way I calculate it... what you reported for interest expense in the fourth quarter relative to what reported this quarter and you only paid down $40 million in debt. I was just a little bit surprised to see the delta. Just wandering if that's decline in the overall... what you are paying for interest expense?

It's a little bit of rate, but also we paid down a lot in the fourth quarter and it happened later in the fourth quarter.

Okay, that's helpful, great.

The weighted average is much better in the first quarter of this year.

Perfect, that's great. Thanks. And I guess, Martin, I certainly... I am not biotech analyst and certainly acknowledge that you have easier comps in the second half of year by a process. When I look at kind of like the biotech pipeline, I am really hard pressed to see growth from new indications, I mean, from existing drugs. I mean, doesn't look like there is anything meaning potentially to get proved. I guess, when you look at the biotech pipeline, and you look at what's out there, do you see any potential surprises to be upside in terms of new indications, new drugs being approved?

Yeah, there are several drugs in development that if they hit and they deliver on their targets, there will be further growth in the market. And I would say on our first comment, there are several biotech, large biotech drugs that have very good growth rates at this point. When you take the aggregate of, let's say, the top ten biotech drugs, that's unfortunately overshadowed by declines in other major drugs. So, that's why the overall industry in aggregate is down. But if you are focusing on certain molecules and then put vaccines on top, put adoption of disposal manufacturing on top, put new product on top, which in some cases are actually competitive conversations. It actually is pretty descent even in... at time what kind of the major drugs that used to grow in the 20s are only growing single digit. It's actually pretty good. That's why I think it's going to come back to more normal range.

Okay, that's helpful. And since you mentioned vaccines, can you just give us some idea on what chunk of that business you are... and what's the profitability difference between your vaccine business and biologics business?

There is no material differences there, it's basically just different application for a range of products that we use.

The overall amount of vaccine being produced is usually a lot less than the overall amount of molecule antibody drugs.

That's correct, yes. It's kind of a different animal, it's smaller batches, more diverse products. So you need a more flexible production step up, which is again more conducive to disposable solutions. And you need slightly different applications. So you use existing technology, but you develop a different application, that's the main thing. But if you look at the pipeline of the major vaccine companies, there is a whole new level of interest. And vaccines are particularly outside of U.S. vaccines... in Asia, Latin America and various affectively in countries where public health is critical and funded by the government. So it's kind of a nice add-on in those countries where they don't have biotech yet, we see good uptick in vaccines. So, that's hwy it's good. And I would say the other part is with the success of Gardasil and these kind of new generation of the therapeutic vaccines, there is of course a lot of interest in the pipeline to develop similar type drugs for other cancer applications, so that's why there is a renewed interest I think you saw Novartis making announcement on cancer center somewhere in Europe and so it's a fair amount of interest though is coming back so.

Great and then just one final question typically serving every lab that I was in the first thing when we built the new lab it install a molecule through some a Lab Water systems you have given the pick up you have seen the first quarter is are you seeing your new systems in every placement for existing filler [ph] systems or is it actually grow new lab construction plan?

Its both actually in the way the business works is the we have a very large install base and after some time the systems are right for replacement and you sale a new instrument in to your existing base that's one, the [indiscernible] is some what unique because it combines units and makes it much simpler then we go after conversion of centralized systems, so in other words if you have a centralized system that is not really performing to what a lab needs as you install upon a new system, so that would be new business and then we are also growing the application in the clinical diagnostic market quite a bit.

Thank you very much.

Our next question comes from the line of David Chum [ph] with the Lehman Brothers.

Thank you very much thanks for taking my question, thanks for all the color around that geographic growth sincerely had a lot of growth in Europe and in Asia, I was just wondering if you could remind us in general of the, gross and the operating margin differences among bio-science and bio-process?

Okay. We've talked about this before and other call and there is no significant difference in margins... operating margins between the two divisions [Audio Gap]. There are on the regional basis we really don't manage the business level we don't [Audio Gap] we managed globally by divisions so but also there its been no huge differences that I know of, Charlie [ph] would you comment on this.

Yeah. No, its not significant differences by business or by geography. I would say there are some businesses that we have, that have lower profitability such as the art of the business and process and that's one of the reasons and given also the raw material cost increase that many manufacturers have been... have seen. So, while we have de emphasize this product line in the last couple of years and will continue to do so. So, we managed profitably really on a global and divisional level by focusing on certain product lines and families.

Okay, thanks very much.

Our next question comes from the line of Michael Churney [ph] with Deutsche Bank

Hey guys. You spoke a little bit about the vaccines business and some of the factors have seen that is often disposal business. What percent of the overall bio process business are those two pieces?

David ph], that's a part of our downstream processing business we are just 40% of revenue but we don't break out specifically how much is related to vaccines or disposal manufacturing. We have characterized them as small but very fast growing segments of the business right now.

And when you say fast growing you're talking about significantly above the general company average or?

Oh yeah significantly above that and in the double-digit.

Okay I think most of my questions are answered thanks.

Okay.

our next question comes from the line Peter Lawson with Thomas Weisel and Partners.

Hi this is actually Eric [ph] for peter. Thanks for taking my question. I was wondering one if you can provide may be bit more color on what types of products or products segments are driving growth in both Asia and in Europe?

Okay we mentioned let's go by the vision. We mentioned the disposable product lines which are growing very well and again flass [ph] it's a combination of one time use capsules backs and connectors is going well. Our and that includes for example also the novaseptic [ph] business that we try that's helping with growth. We're seeing good growth in drug discovery also in Europe. Latin Asia a smaller market but definitely in Europe. With drug discovery in Asia we're seeing again good growth in that water. And in Japan in particular and I highlighted that and also in Japan we had a good growth in bioprocess as well.

Hey great thank you for that color. And I guess similarly in the U.S. any particular things that stand out for strength in life science segments and how was government funding positively or negatively impacting you there?

In U.S. the stand out I'd say what be again the launch of the new Lab Water systems which helps to drive the growth and drug discovery with our multiplexing system and our by market validation service and then good growth I stem cells the funding has been unchanged from our perspective and [indiscernible] not a big up take not a big down turn so we try to target segments that have them attractive funding that you know give them that where the agent company were less depended on capital approvals.

Great and just one last question as far as the raising price of commodities go, how much does the I guess increasing well price set you and do you have that kind of budgeted at certain type of certain level of well price effecting inside plastic anything or how is that flowing into you guys now?

Well so far we obviously like everyone else is increase in energy cost and raw material based and oil based products, so far thanks to our very efficient and manufacturing and purchasing organization with connecting to offset this kind of increases. We look all the time that efficiency improvements to drive better margins growth but also to offset in cost increase so, so far and also for this year we expect to complete the offset that with efficiency.

Okay, its very helpful, thanks a lot.

That's all the time we have allotted for today's conference call, I would now like to turn the call back to Martin Madaus for closing remarks.

Okay, so thank you everyone for participating at the conference call today. We think that Millipore offers investors the opportunity to own really a leading franchise and exciting life science research market and also biotech market, that can't fluctuate as we talked about today in the term but really offers good long term growth prospect. We hopefully we have the opportunity see many of you at the upcoming Deutsche bank and Banc of America conferences. And we also encourage you to visit us in [indiscernible] Massachusetts at offices. Thank you very much.

Thank you for your participation in today's Millipore Q1 and fiscal year 2008 earnings release conference call. You may now disconnect.