Good morning. Welcome to the Waters Corporation first quarter 2009 financial results conference call. All participants will be able to listen-only until the question-and-answer session of the conference. This conference is being recorded. If you have any objections, please disconnect at this time. I would like to introduce your host for today's call, Mr. Douglas Berthiaume, Chairman, President and Chief Executive Officer of Waters Corporation. Sir, you may begin.

Thank you. Good morning and welcome to the Waters Corporation first quarter financial results conference call. And with me on today's call is John Ornell, Waters' Chief Financial Officer and Gene Cassis, the Vice President of Investor Relations. As is our normal practice, I will start with an overview of the quarters' highlights and then John will follow with details on our financial results and provide you with our outlook for the second quarter and for the full year, but before we get going, I would like John to cover the cautionary language.

During the course of this conference call, we will make various forward-looking statements, regarding future events or future financial performance of the company. In particular, we will provide guidance regarding possible future income statement results of the company, this time for Q2 and full year 2009. We caution you that all such statements are only predictions that actual events or results may differ materially. For detailed discussion of some of the risks and contingencies that could cause our actual performance to differ significantly from our present expectations, see our 10-K annual report for the fiscal year ended December 31, 2008, and Part I under the caption 'Business Risk Factors.' We further caution you that the company does not obligate or commit itself by providing this guidance to update predictions. We do not plan to update predictions regarding possible future income statement results, except during our regularly scheduled quarterly earnings release, conference calls and webcasts. The next earnings release call and webcast is currently planned for July 2009. During this call, we will refer to certain non-GAAP financial measures, a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is attached to the company’s earnings release issued this morning, and our discussion with the results of operations were being referred to pro forma results which exclude the effect of [findings] such as those outlined in our schedule entitled, 'Reconciliation Of Net Income Per Share', included in this morning's press release.

Okay. Thanks, John. Well, in the past couple of quarters, we have seen significant change in demand trends in our markets. Concerns about tightening capital markets were followed quickly by a souring global economy, compounding issues related to an already skittish pharmaceuticals spending environment. Certainly these turbulent times stress even the most successful business strategies, as slower demand and weaker visibility allow little flexibility for less than optimized business decision making. Though we have been through tough end markets before, none have matched the current environment, and I think thus our business model has been and is being subjected to a new test. I'm pleased to tell you that we are weathering this storm, and that in the first quarter, the agility and resiliency of our business has allowed us to deliver higher operating profits than earnings despite a top line that was under pressure. Our sales in the quarter were down 5% on a currency neutral basis, and we were able to deliver 7% earnings growth due to tight cost control, currency-related cost reductions, leverage from our share repurchase program, and favorable product and geographical mix. We benefited from investments in a global manufacturing and distribution strategy that allowed us in the quarter to more than offset the adverse top line effects of a stronger U.S. dollar with reduced British pound and Euro-based manufacturing and SG&A costs to yield a nice pickup in our margins. In addition, our global sales strategy that focuses on delivering innovative system-based solutions supports a market-leading pricing position that can be quarter after quarter seen in our superior gross margin. Looking at the top line, the strong performance of our recurring revenues, including our service and chromatography chemicals businesses help partially offset slower instrument sales. Over the years, our recurring revenue growth has remained…

Thank you, Doug, and good morning. First quarter sales declined by 10% and non-GAAP earnings per diluted share were $0.74 this quarter compared to $0.69 last year. On a GAAP basis, our earnings was $0.75 this quarter compared to $0.67 this year. A reconciliation of our GAAP to non-GAAP earnings is included in our press release issued this morning. Reviewing Q1 sales results, sales were down 10% this quarter with currency translation representing 5% of this decline. Versus prior year, the first quarter had three more selling days than 2008, which we believe added between 1% and 2% to our overall sales growth this quarter. Looking at our sales growth, geographically and before foreign exchange effects, sales declined pretty much as expected with all of our regions feeling the impact of the global recession. Sales within the U.S. were down 6%, European sales were down 3%. Sales within Japan were down 7%, and sales in Asia outside of Japan declined by 6%. Turning to the product front, within the Waters division, instrument systems sales declined by 16%, and recurring revenues grew by 9% this quarter. Within our TA instruments division, the sales declined by 6% versus prior year. Now, I would like to comment on our non-GAAP financial performance. Gross margin was very strong this quarter and came in at 61.7% and versus prior year, the margins expanded by 350 basis points. This improvement was heavily affected by a very favorable combination of foreign exchange dynamics this quarter. In Japan, where the yen strength of 10% versus the U.S. dollar; we had favorable translation of our Japanese sales and no offsetting local manufacturing costs. In the UK, we have significantly more production than local sales and the British pound depreciated by 25% versus the U.S. dollar, significantly improving overall gross…

Thank you, John. Operator, I think we can now open it up for Q&A.

Thank you. At this time, we are ready to begin the question-and-answer session. (Operator Instructions). Our first question comes from Marshall Urist with Morgan Stanley.

A couple of things; first one, can you kind of walk through in more detail what happened on the gross margin side in terms of how we netted the improvement that we saw in terms of headwinds on volume, how much was FX? And how much was cost control?

Sure. If we look at the margin impact, FX was the biggest player of this quarter. If we look at the yen, the yen was up about 10% on a year-over-year basis, and that probably provided around us $3 million sales pickup with no corresponding increase in cost of sales. We have no manufacturing ops there. The British pound was down 25% versus the dollar, so our cost of sales was higher. And mass spec products did very well in the quarter. It was depressed and that probably added another $3 million to $4 million of net benefit to the gross margins. And then just the mix of high-end mass spec chemistry sales versus U.S. dollar cost production, which was proportionately lower, I added a little bit more to that as well. So, you know, above that somewhere between 75% and 80%, perhaps of the overall benefit, so it is associated with these dynamics in currency mix that I'm describing. In addition to that, product mix was favorable. As I had said, we have a different proportion this quarter of chemistry, services. There weren't a lot of costs added to those operations for the incremental margin is pretty rich, and we had some savings within the manufacturing ops world as well, there were a couple of engineering cost reductions that went into place. We had lower freight costs. We switched some of our shipments to ocean freight. We had lower warranty costs, all of which tended to offset the volume of currencies that we otherwise would have seen. In addition to all of that, we had incredibly stable pricing around the world. So while I was a little fearful [whether we on would] see some pressure on the price side, that did not materialize in the quarter whatsoever.

And Marshall, I just might add that 30,000-foot perspective on this currency issue. I think one of the dynamics of the Waters, the way we run our business is over the last 15 years we have added most of our incremental manufacturing capacity outside the United States. So we're manufacturing in local currencies. In Ireland, it's somewhat in the Far East, and importantly in Manchester with our mass spec product line. What that means is that in those years when the dollar was quite weak, we had a lot of manufacturing costs. So you didn't see our bottom line being that much favorably impacted by a weak dollar. Now when you got a period of a strong dollar, we have these natural hedges built into the way we run our business that provide, in this case, surprisingly greater upside because of the way the pound moved versus everything else. But it's fundamentally related to our long-term notion that we want to balance our manufacturing and our sales to a much greater degree than I think most companies in our position are able to do, and besides that we get the net result of substantial tax advantages by doing that too. So it's all a result of that strategy that you are seeing some of the benefits come through in this P&L.

Absolutely, that makes sense. Just a couple other things on the top line. So the consumables at 9%, was there anything special this quarter or anything kind of that pushed that number a little bit above expectations?

Well, I think the only thing special versus what I’d call a normal quarter is that we had a few more selling days in the first quarter of '09 versus '08. And that affects, to some degree, our service revenue, because you got more days for service guys to bill their time. It's a little hard to see how many of those flow through depending on Easter one year to the next year. That's why we think overall, that dynamic affected us one to two points in our growth rate. But other than that there was nothing unusual in our recurring revenue dynamic.

Okay, great, and then just one other question on the selling days issue. The quarter ended April 4th, so was that just how the calendar fell for you? And then are we going to sort of give back those three days next quarter or how is that going to work? Did you guys decide to close it on the 4th?

Yes.

Yes. When you have the year starting on a Thursday like this, you got to make a call as to how many full weeks you’re going to put in the quarter, and then we have 13-week quarters in Q2 and 3. And then whatever you’ve done to yourself in the first quarter falls out in the fourth. So these days that we picked up in the first quarter will fall out in the fourth quarter.

But, Marshall, it is consistent with how we’ve done it over 15 years.

Way the calendar falls.

The way the calendar falls this year and next year it will be a little more consistent.

Thanks, Marshall.

The next question comes from Ross Muken with Deutsche Bank.

So I'm trying to get a sense for kind of the optimism about the second half pickup. When you look at the commentary at a pharma, and that's big pharma, small pharma. Aside from the obvious on the M&A front, you are hearing a lot about portfolio rationalization taking down R&D spend significantly, headcount significantly, based on poor return on capital. I'm trying to rationalize that versus some of the comments about stabilization. We’re seeing obviously some pretty big instability in the CROs in their result, which obviously is part of that pharma customer base, so I'm kind of curious on your assumptions there. It seems like you think that that's going to be stable through the year. And then on the industrial and chemical side, are we assuming kind of the flat lines from Q1 levels or are we assuming some pickup in the back half of the year, in some of those traditional industrial markets?

Okay. That's a lot to pack in, but I’ll try to handle it, and John can [comment] on the other side. First of all, on the big pharma side, Ross, our results were actually pretty stable. Our big pharma customers actually grew this quarter, and that's the dynamic that we saw in the fourth quarter too. So if you look at the top 20 large pharmas around the world, actually there we saw most of their rationalization of their business happen prior to that period. Now, I won't tell you that it's all behind us, but one of our dynamics is we've been so intense in those accounts that we saw a factor of that really early on. The other thing is those accounts have been really focusing on productivity, and how to really drive their important processes faster and more importantly. And we’ve actually seen a lot of success in our new capabilities in all facets, ACQUITY, mass spectrometry, and data; and making penetration into those accounts, so we’re not anticipating that that drives up dramatically over the rest of the year, but we’re not seeing the kind of pressure that maybe some others are seeing in some of those applications. Secondly, we believe that there will be a stimulus impact in the rest of the year. It probably isn’t second quarter; it's a second half dynamic. We’ve certainly seen stimulus programs passed by the U.S., by China, by Brazil; it's really Western Europe that’s probably seen almost nothing on the stimulus front coming from. So we haven't banked a lot of stimulus money into our outlook, but if you want to look at a reason to be a little more optimistic, I think the stimulus spending will provide some [H-factor] in what we are looking at. CROs clearly…

And just to be clear, Doug, when you talk about the impact of the stimulus, you are assuming this impacts both the industrial and the academic sides of your business or just (inaudible) UPLC into academic.

Principally Life Science and the academic in the government lab area.

Okay. Was there any, John, just quickly was there any impact from M&A in the quarter on the top line?

Yes, the acquisition of Thar added about $2 million or so of sales. It was probably a few hundred thousand of sales for the TA as well that were incremental year-over-year.

Okay. And going forward, Thar should be something like $4 million to $5 million a quarter?

Yes, something in that range.

I mean, you said the annual was $20 million, right?

Yes. That’s correct.

The next question comes from Quintin Lai with Robert W. Baird

Could you give us a little update on the impact of the acetonitrile shortage? Are you seeing any impact in terms of maybe increased adoption or switching of compliance to ACQUITY?

Frankly, Quintin, I think if you gauge the amount of discussion on the part of our, particularly our significant customers, the answer is, it's definitely got their attention. Frankly, if you ask me to point to actual orders that are coming in as a result of it, it's a little harder. I think that this is still a building momentum that we've seen some impact of customers, but I don't think we've seen the real impact that's still to come. There's no reason to believe that the acetonitrile shortage is going to be impacted anytime soon, it's affected by a dynamics outside the laboratory industry as you know, acetonitrile is a byproduct of acrylonitrile production, and that’s dramatically affected by industrial demands. And so the cost of acetonitrile is up significantly. That's probably still only being significantly felt by a number of these customers as we speak, and I expect it to have a significant impact, but I don't think I can say that it's significantly affected our current order run rate.

That's interesting. So then in this quarter, where you had really strong consumables and services, and I understand the service component with the extra dates, but on the consumable side and column usage then, it just sounds like that even with the shortage, even with the macroeconomy, your customers must be across board still doing day-to-day business.

I think one of the things that perhaps isn't as well understood about our consumables business is it's not a catalog business that’s full of relative, a mix of low value added items, and perhaps PH meters and things like that that are perhaps even more instrument kind of related. Particularly with ACQUITY, that's a much more captive stream. And of course, every ACQUITY instrument that we put into place increases that run rate of ACQUITY consumables. Now ACQUITY is still the smaller part of our overall chemistry consumables line, but it's a much faster growing piece. And together with the baseline of throughput in the QA/QC marketplace, requiring quality control of drug output, you know, we've never seen and didn't anticipate a dramatic fall-off in our chemistry sales.

The next question comes from Isaac Ro with Leerink Swann.

First question will be just [felt] little bit on the stimulus money, and I’m wondering maybe on a relative basis how you compare your exposure to stimulus dollars that are maybe in the healthcare segment, and then perhaps outside of healthcare sources. You know, so if not maybe on an absolute basis, I know that's a hard number to come across, but maybe relative.

I would just say that most of what we see in terms of quotes that we’re actually making, which are substantial. In the product sense or in our highest value added systems, that’s high-end mass spectrometry and ACQUITY-based systems and the great preponderance of them are what we call Life Science applications. They are in NIH-supported laboratories. They are in medical centers, hospital medical centers, and in government laboratories. That's where the preponderance interest is, I’d say.

Okay. And then if we just look back historically just to take this one step further, I think for a lot of, just today, it looks like a lot of the grant applications for the NIH-related dollars are due now or thereabout. So if you just look back historically at government-funding, how would you parse it out between health care versus non-health care type applications?

The mix is heavily weighted towards life sciences, healthcare, if you will. Breaking it down any further than that within life science is difficult, but there is really [no way of] looking on the industrial side, if that's where you’re headed. The only thing that I’d say which is an interesting fact, I think most of this stimulus money, almost all of it is going to go to support existing investigators, that funding new investigators with [new] NIH grants, in the area of life sciences is not where it's targeting. If you don't have an existing approved investigator, existing grant that you’re looking to augment, my guess is you are not going to get much stimulus money.

Okay. And then just on customer exposure, you mentioned before top 20 accounts, without getting too specific, could you give us a sense of how those top 20 accounts might be broken up between branded versus generic drug companies and then maybe CROs.

Almost all branded ethical pharmaceuticals.

Okay. And then just lastly thinking about the pharma, M&A outlook, I know it's a lot of moving parts here. But just if you can remind us how that marketplace impacted equipment sales, not chemistry but specific equipment, in the '02 and '03 timeframe as just sort of a reference point relative to what we might see this time of around.

Well, I think what we have seen historically is that, two large pharmas come together there is normally a quarter or two of reduced, if you looked at the two independently versus the two combined, there's a couple of quarters of reduced instrument purchases historically that then moves through and you see the line returning to a more historical level of growth, if they hadn't combined to start with. It's not clear. I mean, you’ve got so many other dynamics that are entering the picture now with much more generic competition, much more cost control on the part of these companies. The fact that they are coming off five years of independent cost controls in a lot of the areas, I think the interesting part is in the quarter just completed, with some fairly major kind of consolidation activities underway; those major accounts grew in the mid-single digits. So, you know, as I said, I think the significant depressed conditions in big pharma have been apparent for a while. We’ve come through two quarters now where our actual demand from those accounts grew. So I don't think that there is a whole lot of room for major downsides.

Okay. And then just lastly looking at your earnings guidance, you know, you obviously put up a good number this quarter and then next quarter is above the street. If you just kind of take the back half of the year and assume earnings are flat year-over-year, it would tell me, it would suggest to me at least that your guidance looks pretty conservative. So I mean, without putting words into your mouth, can you say whether or not you feel pretty confident that your full-year guidance is pretty achievable, given all the uncertainty you mentioned?

Yes. I guess, I would say that all of the difficulties that we talked about in forecasting coming out of the fourth quarter, moving into the first quarter and as we sit here today, you know, life isn't dramatically clearer. Yes, there's some reason for optimism, based on stimulus money and perhaps a few other factors, but I would say it's unclear exactly when we’re going to pull out of this, so I just want to be as conservative as I can, as we are living through difficult times and as we always do, we hope we have more up side than down in the numbers that we put out there, but I think we have a realistic forecast that we are going to stick by.

The next question comes from Derik De Bruin with UBS.

Can you talk a little bit about the capital budget releases of your customers and, just I'm trying to get a sense of the money going for new instrumentation, placement, and I’m ultimately trying to get here is how much of your equipment business is replacement and then if you kind of look at the big pharma mergers that have happened, I guess, were these all big Waters account as a percent of this is going to be a surplus of instruments once the deals were closed and then even going to be potentially be a little longer in getting the stuff through the system than you would have expected?

Well, I guess the best way for me to answer it is to put it in the context of the period that I have seen that's been most like this, which would have been the early '90s. And in that period you had some pharmaceutical mergers. You had a great deal of concern about government policies. You had pressure on margins, and you had significantly reduced capital budgets. And the capital budgets that were most affective during that period, and I think it's similar in this period are the QA/QC capital budgets, where companies in that period made a decision to long out their replacement cycles. And a lot of our big accounts have absolute qualities to say at five years or six years or seven years they change out all their instruments that hit those time deadlines, and they pretty rigorously during regular periods then go through a replacement cycle. In the '93, ‘94 timeframe, we clearly saw them move from that and they longed out their replacement cycle. We see some of those dynamics going on in recent times. We don't see it so much going into important strategic programs, strategic R&D programs, where they are looking to significantly increase or change their processes, improve their productivity. But with just regular replacement cycles, we definitely see some pressure on them longing that out. So that's kind of where I’d say we probably see a similar dynamic. I happen to think that in the long run, we’re probably going to see the same thing. You may remember back in the '90s, we saw almost a couple of years of reduced replacement demand, and then from ‘95 to the end of the ‘90s, granted it was only one dynamic, but we saw pent up replacement demand kick in. I wouldn't be surprised to see some element of that as we move through the next two or three years.

Okay. Hey, John, you guided towards, I heard you correctly, [$30 million] in net interests?

Yes.

What's going to draw, you ended like 2.2 this quarter. What’s going to drive up the interest expense this year?

Our debt was very short this quarter. So we had an effective interest rate of just a percent and a half, and I was just a little nervous extrapolating for the entire year interest at that rate. So I think the rate will more likely [to pay on] debt as we go through the second half of the year, it will be somewhat higher bringing us to the $14 million.

Okay. Thanks.

Yes.

And I guess when I kind of look at the gross margin number, obviously, the unusual FX and mix contributions that are happening in this quarter and rest of the year are going to roll over. I guess, when you see FX, and things in the business would similarly normalize, how should we look at the gross margin in 2010 and out there? That 150, is the gain sustainable?

Well, I mean, yes. You got to anniversary it. You are not going to be able to repeat it. However, I would just point out that predicting what currency markets are going to do and, you know, the relationships that exist today between the Pound and the Dollar and the Euro is such an oddity that, you know, it's just too difficult, I guess I would say to predict what 2010 is going to really look like until we at least we make our way through the September quarter end.

Okay, fair enough. And then there is one final question. I wasn't surprised to hear that your instrumentation was down mid-teens, did I hear you correctly say that organically the TA was only down 6%?

Yes, that’s true. They were based on small amount of acquisition activity. It would have been nine without that. And even that you could argue is a surprising result given the market; and our estimates for the next couple of quarters is that that business is more likely to be down mid-teens based on what we see. So I think we just didn't see the full impact of the business conditions that are out there affecting the business in the fourth quarter. They also had a pickup in their business to academic. They have a pretty significant piece of business that's down almost a third and their pharma business did relatively well in the first quarter also.

And also, your TA has about 25% of their business on service that tends to be up very resistant to the downturn also. So they’ve got a bit of a pushing now.

Okay. And I guess then so what was the weakest instrumentation line? Was it the, I assume, the HPLC business.

Yes, I think that's fair to say.

Yes.

The replacement, if you see HPLC business is the one most under pressure. While it may not be second quarter, we think that’s at a low point.

Thank you. The next question comes from Doug Schenkel with Cowen & Company. Doug Schenkel - Cowen & Company: Maybe just to start with a quick follow-up to one of Derik's last questions, how much industrial exposure is there in the Waters division?

If you count the chemical business, that's probably somewhere between maybe 8% to 10%, we tend to say that 75% of our business is Life Science, 25% is Industrial, if you will, but India is environmental, food safety. By the time you really [pare] out the chemical, the industrial chemical bit of that, it's close to 10%. Doug Schenkel - Cowen & Company: Okay. Thanks for that. And then I want to try to get a better handle on momentum coming out of the quarter. A lot of commentary from your competitors was pretty bleak, January and February. I think many would assert that you guys didn't sound so positive in the early part of March. So did something materially change in mid-March versus how you thought things were coming together in advance of that point in the quarter; and what does this mean in terms of momentum you had heading into Q2?

[: There's a mix of companies. You know, Japan is all old, traditional, Japanese pharma; it's not the biggest pharmaceutical companies. And Japan has been coming off of a couple of years of very tough conditions in our world. So you got a mix of what was in the base and what's coming. Western Europe was encouraging with the flow of interest coming out of Western Europe. And while the shipments were able to drive through in Western Europe and the U.S. were consistent with kind of our outlook, maybe a little bit more of underlying optimism. I hesitate to use the word 'optimism' because we're clearly not really optimistic, but versus our previous expectations, a little bit more strength than we might have expected to see.

The only thing I’d add to that is I think as we have said, particularly in the first quarter, you wait for capital releases. You wait for capital budgets to be released for the year and, working through the start of this difficult year, I might look a little less well because I was holding my breath waiting for the capital releases to make it through the end of the quarter and they did. But it wasn't obvious as we made our way through the entire quarter that that was going to occur.

The other thing that it's more mix dynamic is that, we see a lot of interest in our higher value-added systems. ACQUITY and the new high-end mass spectrometry, it just seems to be a lot of interest. Now we’ll see whether we can convert that into orders and shipments. But particularly, late in the quarter, where customers kind of had a much better handle on what they’d have to spend. We’re surpassing a surprising degree of, again, interest I’d say I had fall short of optimism, but interest. Doug Schenkel - Cowen & Company: All right. I really appreciate your candor. That was really helpful, and I think we all recognize that in this environment optimism is a relative term. The academic research market, that's historically been a smaller part or I guess I should say a smaller percentage of your sales. Do you envision having to make some incremental investments or shifting people around to better position yourself in this end market given the common stimulus fund there?

We think we’re pretty well situated to cover that. Yes, we are always, balancing territory. Last year, we went through a lot because, we have had to consistently look at this big pharma dynamic and see how our sales and service support for them versus emerging biotech and the CROs, et cetera. So it's more on the margin that we have to do it, Doug. It's not a major restructuring that we finally have to go through. I think we’ve been pretty conservative in how we have allocated resources. We’ve been very tight with headcount adds because overall our instrument placements were under pressure. So, we are going to be careful with how quickly we add. We think we have got the capacity to cover the existing [bullets of] business. Frankly, I think on the service side we may be under pressure to add a few more service people if we continue to keep up with this level of service. We’ll be tighter on the sales side, I think. Doug Schenkel - Cowen & Company: Okay. And last question, I have already got a few e-mails from folks regarding selling days and the impact in the quarter. I just want to make sure this assertion is correct. I think, it will be helpful for people to understand it if it is. The benefit you get from additional selling days, that’s really mostly pronounced at the chemistry line, it really doesn't have as much of an impact for services and instrument line?

[Jump on those] service line and then on the chemistry line.

But really, we would say almost nothing on the instrument line.

Operator, I think we have time for one more question and then we will have to close the call.

Thank you, sir. Our final question will come from Tycho Peterson with JPMorgan.

Hey, thanks for taking the call. Maybe just an additional color on pharma, because you’ve talked in the past about some of the pharma companies standardizing on ACQUITY, I think AstraZeneca has done it. And I’m just wondering as you look at the year ahead you talked a little about cautious optimism. Are your discussions with pharma getting a little bit more strategic about standardizing around ACQUITY?

The simple answer Tycho is yes. I would say we have seen a high level of interest in almost all of big pharma. A couple of big pharmas, I think we’re going to be in position to announce similar to the one you mentioned, but in this climate, again, you have to right till the very end, you have to be careful about whether they say, if I make that plunge, I have got to commit more capital, even though it will pay itself back in two or three years. Until I see the PO, I'm not ready to declare victory, but this certainly, if somebody asked the question, why are you a little more optimistic, there is such a great deal of interest in ACQUITY, that I think some of that has got to pay a dividend. Tycho Peterson – JPMorgan: And have you seen any impact from kind of inventory management? I mean we have seen some companies talk about destocking and obviously it's a different dynamic when you are talking about glass slides versus columns, but are you seeing tighter inventory management by your pharma customers.

A little bit, I’d say, probably not a huge amount. We know we saw some in some of our big CRO customers in India, for instance. So yes, I think a part of, a little bit of optimism as we go further on in the year, as we don't think that there can be much more of that inventory management, but I don't think it's been a huge piece of shortfall for us. Tycho Peterson – JPMorgan: And then, can you just comment on the competitive landscape? We had a handful of triple quads come out at ASMS last year and can you just update what you are seeing competitively. Do you anticipate you are going to continue to take share going forward or how do you look at the market?

Well, I think, it's a very competitive industry and we have got worthy mass spec competitors. I think the mass spec universe is more competitive than the chromatography universe. I think it's much more of an oligarchy in the chromatography world. I think we are particularly happy with our current positioning in the mass spec world, and from what we see from customers and what we think we are going to see at ASMS, we are very happy. That doesn't mean that we think we have got the world by the horn. Well, horn is probably the wrong part of the anatomy. But it's a very competitive world. Others are going to introduce products. It's a very healthy, competitive world, but I think compared to some years, I feel more comfortable this year than perhaps I have in some years.

You're welcome. Operator, I think we will let these kind people get back to their regular jobs now.

Okay. Thank you, sir. That will conclude today's conference call. Thank you for participating. You may disconnect your lines at this time.

Thank you all. We'll see you next quarter.