Revvity Inc (RVTY) 2008 Q1 法說會逐字稿

Good afternoon ladies and gentlemen and welcome to the PerkinElmer first quarter 2008 conference call. My name is Antoine and I'll be your Operator for today. At this time all participants will be in a listen-only mode. We will conduct a question and answer session towards the end of the conference. (OPERATOR INSTRUCTIONS) I would now like to turn the call over to Mr. Mike Lawless, Vice-President of Investor Relations.

Thank you, Antoine. Good afternoon and welcome to the PerkinElmer first quarter 2008 earnings conference call. 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 this call is being webcast live and will be archived on our website until May 24th, 2008.

Before we begin 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 the most directly comparable GAAP measures is available as an attachment to our earnings press release. To the extent we use non-GAAP financial measures during this call that are not reconciled to GAAP in that attachment, we will provide reconciliations promptly.

I am now pleased to introduce the President and Chief Executive Officer of PerkinElmer, Rob Friel.

Thank you Mike. Good afternoon everyone and thank you for joining us to discuss PerkinElmer's first quarter 2008 results. Also on the call is Jeff Capello, our Chief Financial Officer. During today's call, I'll walk through the drivers to our first quarter performance and discuss our priorities for the year. Jeff will then provide some details on our financial performance, and then we'll open the call up for your questions.

The first quarter was an excellent start for 2008 as both our revenue and earnings, exceeded our expectations. In particular, our organic revenue growth at 10% is the best first quarter in over five years, which we feel especially good about, given the uncertain economic outlook. Our strong performance in Q1 was attributed to the resiliency of many of our end markets and very good operational execution by our employees across the organization.

In addition, we are benefiting from the investments we have made over the last several quarters in new products, facility expansions, and bolt-on acquisitions. We are also quite pleased that our adjusted operating income was up 24%, driven by good growth in our gross margins.

While the revenue growth was a big driver, it was also due to excellence performance out of our factories and the improving mix of our businesses as a result of our investment priorities over the last several years. Turning to the major drivers of our performance the quarter, in genetic screening, we have another strong quarter of growth. Our end markets in these areas are continuing to grow in the mid-teens, driven by the increasing awareness of the benefits of early and more accurate detection of disease. However we are growing faster than the end markets in these areas due to the introduction of new products, the strong performance of our recent acquisitions and our ability to leverage our global scale and drive increased geographic expansion.

In our core neonatal screening business, we either won new contracts or expanded existing screening levels in Mexico, Chile, Korea, Taiwan, Saudi Arabia, and the Czech Republic. In the U.S., we are benefiting from the fact that the number of states offering the standard of care continues to increase, and we have introduced several new Analytes to screen for Cystic Fibrosis that are starting to become part of the states mandatory panel. In the prenatal area, the preference to screen in the first trimester continues to grow, and within the next few months we will have completed a significant physical expansion of our NTD screening capabilities. We also continue to look for companies that expand our technology and market reach. We closed the acquisition of a metabolic screening lab, formerly owned by Pediatrix, which we have renamed PKI Genetics, and will compliment our previous acquisitions of NTD and ViaCell. Both of these acquisitions continue to form well in Q1 and were accretive to our organic growth rate.

In medical imaging, the market growth continues strong due to continued penetration of digital X-ray into the large analog X-ray market. Here too we were growing in excess of the market because of our increased capacity, which has given us the ability to pursue new applications which were previously not possible due to our constrained supply. The fact that we were able to obtain this additional capacity is directly attributable to both our capital investments, as well as to the Santa Clara employees who drove first quarter panel yields from the fab to an all-time high. In analytical sciences, we continue to benefit from the increased emphasis on the environment, as well as growing awareness of elemental and organic contaminants in food and consumer products.

Just to mention one area, last year alone over 25 million toys were recalled for safety concerns. As a result, toy manufacturers are aggressively pushing testing requirements upstream through their supply chain. We are quickly responding to the toy manufacturers need to address the safety of their products, as well as their brand reputation, with the development of PlaySafe Analyzer that are configured with the methodologies, applications, and SOP's that they need to ensure that their products meet their standards for safety.

This analyzer approach is not limited to toys. We are employing our breadth of analytical technologies to develop new analyzers which have been configured specifically for our customers needs, whether they are measuring toxic metals, detecting pathogen contamination, analyzing hydrocarbons, or detecting counterfeit drugs. We had a very successful PITTCON where we introduced several new analyzers, which were configured specifically for food manufacturers, environmental laboratories, and biofuel startups, as part of our EcoAnalytix initiative. Our reagent business which serves the bio pharma market is another which benefited from recently introduced news products. In fact, due to the strength of these products, our reagent business is now almost 60% of our BioDiscovery revenue. However, the success of our reagents platforms is being offset by weakness in the instrument business as the bio pharma companies are cutting capital budgets and deferring purchases on larger ticket instruments.

Fortunately our BioDiscovery instrument revenue is less than 7% of our total revenue, so we are not very exposed to pharma capital spending. Our photonics business also is benefiting from our increased spending on new product, as it too grew faster then the underlying market. In particular, our Xenon Flash module for mobile phones had a very strong quarter as did our new ThermoBio sensors used to improve energy efficiency.

We expect the adoption of Xenon flash to continue as a growth innovation in mobile phones. Our service business continued it's strong growth trend through a combination of winning new business and increasing business with existing customs. The profit pressure on a number of our customers are causing them to intensify their efforts to rationalize costs, which is resulting in more outsourcing. During the first quarter, we continued to further differentiate our service with the LabMetrix acquisition.

LabMetrix brings patented technology involving multi-vendor validation, and is a great compliment to our OneSource offering. Before I turn the call over to Jeff to discuss the financial results, I would like to briefly touch on our three top priorities for the remainder of the the year. First of all, we will continue to drive profitable growth by investing around the three macro trends that influence a large percentage of our businesses. These are, the trend toward early and more accurate detection and treatment of disease, the need for solutions to address the growing challenges of pollution and contamination, resulting from increasing global trade and industrialization, and finally the desire of our customers to outsource more of what they do in response to pressures to reduce costs and improve productivity. As has been the case over the last few years, these investments will be a mix of internal spending and bolt-on acquisitions. The second priority is to continue to drive operational execution, to both improve our cost and develop a more flexible cost base, which is particularly critical if we enter a difficult economic environment.

And the third priority is to continue supporting our global employees with the tools, training, and leadership development they need to sustain the momentum of our excellent start in 2008. I believe that PerkinElmer is well-positioned for strong performance ahead. Our unique position in several attractive markets which is supported by macro growth trends and technology innovation, continues to position us very well to grow in the current economy.

Now let me turn the call over to Jeff.

Thank you, Rob. Good afternoon. I will now provide some details on our financial performance for the first quarter 2008. The I'll provide guidance on our outlook for Q2 before we open the call for questions.

To the extent that I use any non-GAAP measures, those have been reconciled to the comparable GAAP measures in the appendix to the press release on our website. As Rob noted Q1 was an excellent quarter of financial performance. We generated strong top line growth, improved operating margins and had excellent earnings per share growth, which gets us off to a strong start for 2008. Starting first with revenue, we finished the first quarter of 2008 with sales of $482 million, up 20% compared to $403 million in the first quarter of 2007.

Changes in foreign exchange rates and acquisitions contributed 600 basis points and 400 basis points respectively for consolidated sales growth in the quarter. By segment, sales growth was 19% in LAS and 22% in Optoelectronics. Of the LAS sales growth, approximately 600 basis points came from foreign exchange, and approximately 600 basis points came from acquisitions. Optoelectronics increased approximately 300 basis points from the impact of foreign exchange. The remaining revenue comparisons are presented on a reported basis, which includes the impact of foreign exchange and acquisitions. Return strength was delivered across the board in our LAS businesses. Genetic screening business which was 19% of LAS revenue, increased very strong double digits, driven by excellent growth in our neonatal, prenatal, and new cord blood banking platform. The Analytical Sciences business which represented about 35% of LAS revenue, increased sales in the strong double digits, driven by robust performance in inorganics, which includes our AA, ICP, ICP Mass Spec product lines, driven by environmental applications such as clean water and consumer product safety.

Laboratory service business, which represented about 24% of LAS revenue in the fourth quarter, increased double digits. Overall service experienced broad-based growth across all product lines and all geographies, particularly in our OneSource business. Finally our BioDiscovery business, which represented 21% of LAS revenue in the quarter, increased sales in the mid-single digits as compared to the same period in 2007, as reagent sales exceeded our expectation's and instrument sales were soft. Within Optoelectronics we had very strong growth in both our medical imaging and lighting businesses. Our medical imaging business which represents 30% of Optoelectronics sales, grew strong double digits during the quarter, driven by broad-based demand for both diagnostic as well as therapeutic applications, and very strong manufacturing yields generating a record number of units for the quarter. The specialty lighting business, which represented 40% of Optoelectronics revenue Q1, increased in the strong double digits compared to Q1 of last year, driven primarily by the shipments of approximately $10 million of our flash modules for mobile phone cameras. The optical sensors business, which represented 30% of Optoelectronics revenue in the first quarter, increased in the low single digits in the quarter, impacted somewhat by the slowing economy, particularly in applications for the housing and automotive markets.

Geographically, revenue increased in the high teens to high twenties cross all regions. In Q1, the sales mix was 43% in the Americas, 38% in Europe, and the remaining 19% in Asia. GAAP gross margins for the first quarter of 2008 was 41%, up 160 basis points compared to the first quarter of 2007. Adjusted gross margin increased 130 basis points year-over-year.

The improvement in gross margin was driven by volume leverage, the favorable impact of ViaCell, favorable product mix and productivity initiatives, partially offset by inflation, freight costs, and growth in our lower margins/gross margin businesses, such as Laboratory Services and Specialty Lighting, which have lower gross margins but also lower SG&A expenses. GAAP, SG&A expenses were $132.1 million, or 27.4% of sales in the first quarter 2008, up from $101.8 million, or 25.3% of sales in the first of 2007. Adjusted SG&A expense as a percentage of sales increased 190 basis points. The increase in SG&A was primarily due to the impact of ViaCell acquisition, which carries a higher SG&A level as a percentage of sales.

This impact was partially offset by fixed cost leverage on higher volume sales and lower SG&A cost as a percentage of sales for Lab Services and Specialty Lighting. GAAP operating income was $36.4 million compared to $23.1 million in the first quarter 2007. Adjusted operating income increased 24% to $53.3 million as compared to $43.1 million in the prior year. Adjusted operating margins increased 40 basis points year-over-year, due to improved focus on profitability, which more than offsets the 40 basis point dilutive impact to margins of ViaCell. We are on track and making good strides in improving the margins of ViaCell, and expect to it be solidly profitable in Q2.

Based on these trends, we expect a greater degree of margin improvement in Q2 than we experienced in Q1. Looking at expenses, below operating income. Interest expense, net of interest income was $5 million in Q1 '08 as compared to net interest expense of $1 million in Q1 '07. This increase was due to the increase in borrowings over the last 12 month to help fund our acquisitions and share repurchase initiatives.

In the first quarter of 2008, we had tax expense of $7.6 million for an effective tax rate of 24.6%. This tax rate was in line with our prior expectations. GAAP net income from continuing operations was $23.4 million in Q1 '08, up from $14.8 million in Q1 2007. During the first quarter 2008 we had a net loss from discontinuing operations of $2.9 million from the operation of the therapeutic programs in the ViaCell business. We expect to conclude our divesture process related to these programs by the fourth quarter of this year. GAAP EPS from continuing operations increased 67% to $0.20 in Q1 '08, from $0.12 in Q1 '07.

Adjusted EPS was $0.29 in Q1 2008, an increase of 21% over the $0.24 in Q1 '07, exceeding both the first call consensus estimates adjusted for stock options expense and our forecasted range of $0.26 to $0.27. The weighted average diluted shares outstanding for the quarter were 118 million.

Now turning to the balance sheet, we finished the quarter with $185 million of cash, and $381 million of debt, which we define as short and long term debt minus cash. During the quarter we increased the size of our existing credit facility to $650 million. The additional capacity under this facility was used to repay the $300 million bridge facility that was put in place to fund the ViaCell acquisition. In addition, we expect to close on an additional $150 million of long term financing in the second quarter that we'll use primarily to repay some of the borrowing under our existing credit facility and to provide us with dry powder for potential bolt-on acquisitions and other capital needs going forward.

Looking at the cash flow statement, during the first quarter 2008, we generated operating cash flow from continuing operations of $18 million, which is an increase of 6% over the $17 million in Q1 '07. Our focus on working capital continues to pay dividends as we achieve working capital turns of five times in the first quarter. In particular we made strong progress in inventory where we reduced days of inventory by four days on a year-over-year basis. I would now like to turn to our guidance for the second quarter.

For the second quarter, we expect revenue growth in the mid-teens to high teens, driven by continuation of the trends from the first quarter. Of this growth, changes in foreign exchange rates and acquisitions will each contribute approximately 500 basis points. We expect to earn GAAP EPS of $0.25 to $0.27, and on an adjusted basis, EPS of $0.33 to $0.35 excluding the cost of options.

In January, we issued annual guidance for revenue and EPS growth in the low double digits to mid-teens. Based on our adjusted EPS, excluding the cost of stock options of $1.30 for 2007, this would translate into adjusted EPS range of $1.43 to $1.50 for 2008, excluding the cost of options.

Given the strength of our first quarter, driven by strong execution and favorable end market trends, we feel very good about 2008. However, we think at this point in the year, given the uncertain economic outlook, it is prudent to be cautious in our outlook. As a result, we expect to deliver adjusted EPS, excluding stock options, at the high end of the orignal range of $1.43 to $1.50.

We have now concluded our prepared comments and would now like to open the call to your questions.

(OPERATOR INSTRUCTIONS) Your first question comes from the line of Peter Lawson with Thomas Weisel Partners

Just wondering if you talk through pharma, what it was like for you for the quarter.

Peter, this is Rob. I would say pharma was really almost a tale of two cities. I think on the reagent side as we mentioned, we saw good growth. They seem to be continuing to invest in their experimentation in running screens. So at least on the re-agent side we saw strong growth. I think on the CapEx side, as I mentioned, it was negatively impacted by, I think, a slowdown in expenditures and deferral of, I would say, high-end instrumentation. Having said that, it's becoming a relatively small piece for us now, and in fact, in the first quarter it was less than 7% of our revenue. The instrument side was less than 7%

Okay. And then on the revenue growth, the organic growth was something like 10%. What level of that is sustainable? Was there anything unusual in the quarter?

Peter, this is Jeff. So typically I think we've given rough guidance from a medium term perspective of 6% to 8% organic growth in the company. I think we, obviously we exceeded that in this quarter, and if you look at the areas where we exceeded the ranges, probably on the Opto side, because we achieved almost 7% growth on the LAS, which is kind of the mid-point of that range.

In the two areas of Opto that performed let's say better than the average range going forward, is the medical imaging business, which had just phenomenal yields, and so that's difficult to predict on an ongoing basis.

Those were a little higher than we anticipated, and then the mobile phone, which is in a start-up phase, and we shipped kind of a large order. So both of those factors were probably the primary drivers that drove the organic growth above the 6% to 8% range.

And then in the oil and gas market, was there any slowdown towards the end, do you think, the quarter, or heading into Q2?

No, if anything, I think we're seeing increased demand for analyzers in the oil and gas area, particularly because what we find is as the price of gas goes up, the recycling increases significantly, and where we sell into it is mostly the people that are doing the recycling of the oil, so we're actually seeing a benefit from the higher price of gas.

I think the other benefit we see, Peter, is one of the growth initiatives with EcoAnalytix is in the whole bio-fuel or alternative fuel area, and given the price of oil, a lot of development work being done there. We're putting more and more instruments into those facilities.

Okay. Congratulations on the quarter and thank you for taking my question.

Thank you.

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

Thank you. Good afternoon and congratulations on a nice quarter.

Thank you.

With the current environment that's out there, excluding the pharmaceutical issues, as I think that most people have talked about this earnings season, has there been any change in the visibility for your customer demand, and in particular on your medical imaging?

It sounds like that you're still in a situation where you sell as much as you can make. What are you hearing from your customers with respect to their hospital customers?

I would say in the medical imaging area, we still see strong booking strong demand, so we have not seen any tail off in the demand for our panels in the first quarter at all.

And then --

And I think one of the reasons for that is because you have this conversion going on to digital from analog, and I think it's still relatively early days, and so I think that's going to continue to drive the growth for our panels.

Great. And then with respect to the environmental side, that hasn't been linked to kind of macroeconomic condition, but more to the regulated market. Has that changed any in your opinion?

Yes, I think it is, because I think it's becoming less driven by regulation and more driven by really the consumer to a large extent. It's almost impossible to go through a couple of days without seeing something in the paper that is raising some concern around contamination.

So, whether its counterfeit drugs, or whether it's melamine or whether it's toys, it just continues to increase the awareness across the globe, and I think that, to a large extent, is what's fueling the demand.

And then last question, and I'll jump back into the queue. With the ViaCell acquisition, I know it's still early, but are you seeing any out of the box synergies with branding, especially with the PerkinElmer as the parent company, any pick up either in OB/GYN's picking up the cards and passing them down?

So ViaCell had a good quarter. I would say it's probably a little early to tell whether the PerkinElmer synergy is having any impact on that. I would say we're progressing well into the integration, and I would expect the back half of '08 before we would see any benefits from the integration with the NTD and the ViaCell sales force, which is really using the channel into the OB/GYN.

Thank you. Congratulations again.

Thanks.

Your next question comes from the line of Mike Churny with Deutsche Bank.

Hey guys, good quarter as Quintin said before. I just want to talk about the Optoelectronic electronics business. Obviously you'd had some struggles with it in the past. The last few quarters have definitely shown nice rebound, acceleration of growth. Could you talk about, within the different spaces where you guys think you are in the overall product cycles in that environment?

So I would say starting first in the mobile phone, Jeff talked about, very early days. We shipped a fair amount in the first quarter, but we think the adoption of Xenon flash will continue to be ground in mobile phones, so I would say that's relatively early.

I would say digital imaging, as I mentioned before, I think our estimation is probably 30% penetration into the analog conversion, so I think there's still a lot of room to run there, and I think the one area that is being, I would say, slightly impacted by the economic environment is the sensors, but I think we've got some opportunities there to take some of our sensor technology into exciting applications. But that's the one area where I think it is being impacted a little by the economic environment, but both lighting and digital imaging I would say is fairly early in the life cycle.

Great. And then Rob, you've been with the business obviously for a while, but as you grow into the role of President and CEO and take a bigger look at the overall business, are there any holes or areas you want to beef up on the acquisition or investment front, specifically within any of the, either life science or opto side of the business?

I think it's fairly consistent with what we've been doing in the past. I would like to do more in the analytical sciences area from an acquisition perspective. We've done a couple things in genetic screening in the last 18 months, we were fairly active in the BioDiscovery area, and I would say periodically we've done somethings in service, nothing big, but relatively small, I would say analytical science is an area , and also in optoelectronics. I think looking for some opportunity to fill some holes as I mentioned particularly in the sensors area, is something that we would like to do.

I wouldn't say anything different than what you've seen over the last couple of years, and, consistently bolt-on acquisitions that adds either product technologies or market

Great. And then just one more quick housekeeping question. I might have missed this, but what was your activity on the share buyback program during the quarter and what are your plans going forward?

We did not buy any shares back in the first quarter, and we have 1.9 million shares remaining under the 10 million program we had approved by the board, and I would expect that we would execute against that within the next couple of quarters.

Okay, Great, Thanks, guys, and congratulations again.

Thank you.

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

This is Dan in for Derik. A question about the genetics screening opportunity. I know during the analysts day, one of the more salient opportunity that you talked about was in the global opportunity, and I was just wondering whether there were any differences in the reimbursement or managed care landscape, looking at some of the global markets that perhaps were unaccounted for, or maybe just a surprise for you guys as you tried to move the test out to the international market.

This is in the newborn area?

Yes.

We have been operating in the newborn area in the international area for some time. So we have a large presence there in Europe, and I would say the only area that is relatively knew to us is probably more some of the Pac Rim areas, and I would say at this point we're not seeing anything different from a reimbursement perspective as we've seen in other areas. Keep in mind, we've been global in the newborn screening for a long period of time. That business is based in Europe, as you probably know know.

Right. Okay. And I have to ask a house keeping question as well because my phone cut out. For full year guidance on the organic revenues, you reiterated what you had said in the fourth quarter is that correct?

We're going to be at the higher end of that range.

Okay. Great. Thank you.

You're welcome.

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

Hey, guys, congratulations on a good quarter. Again, a couple of quick questions. One, can you, Rob, maybe talk about the RAD business? I know that someone had left that business. I'm just curious if you're actually seeing that stabilize as you maybe thought you would this year.

Yeah, I think it is stabilizing, and I think because of the less competition, we're actually seeing a little bit of growth there. And one of the other areas is we're looking to develop other opportunities in the RAD reagent area, so I think you'll see for 2008, that will actually be a positive contributor to our organic growth.

So it did grow in the first quarter organically?

It did.

And then back to the, just touching again on ViaCell, you said it's maybe too early to see if there are going to be any synergies, but just from a sales force standpoint, has will been any attrition there, or have people stayed? Is the thing that you bought, is it still there?

Yeah, it is. We've had very little attrition there. Let me just sort of correct your comment. We will see synergies. I don't think there's any question, I was saying it was too early to see anything in Q1, but I think we're fairly confident we're going to get some synergies in the back part of the the year. We've been able to hold almost all of the employees there.

A major reason you bought it was the sales channel and the ability to sell these other --

Correct.

And they're still there. And is their level of excitement -- do they still look forward to having more tools in their tool bag there?

Yes, I think they do. I think they're quite excited about the NTD products and we're in the phase right now we're starting to train them on these products.

John, this is Jeff. I think another reason why we bought it was because this is an 83% gross margin business which we think can grow 15% to 20%, so that's an important very important factor to remember.

Sure. And you said some people have questioned whether or not it would be economically sensitive, as well as people would see this as more of a discretionary spend, but that business grew in the first quarter, as well?

It did. Yes. It did. It saw good growth in the first quarter. So at this point, we haven't seen any impact as a result of let's say, deteriorating economic conditions.

Okay. Great. And then last kind of housekeeping question for you again, Jeff, on the full year EPS, FAS 123 expense. I think it was around $0.04 cents for the year, or is that -- and other companies have kind of been changing that around a little.

Yeah, John, I think it will be $0.05 for us this year.

Five cents. Okay. Thanks a million.

Thanks.

Thank you.

(OPERATOR INSTRUCTIONS) Your next question comes from the line of Anna Janes with J. & W. Seligman & Co..

Hi, this is Vishal Saluja. Thanks for taking my question. Good quarter. Jeff, just on the gross margin improvement going forward, obviously a good start there. Actually good operating margin improvement. Are you counting on mix to improve margins further here, or are there specific actions that you can point to that will make us feel comfortable that you will get there, and then I have a separate question.

Yeah, I think it's going to be both. Certainly ViaCell is very helpful at 83% gross margin, the growth we're getting out of that. That's a positive contributor to the gross margins.

Each of our businesses has specific initiatives to try to kind of improve their gross margins, whether they be improving the mix, in terms of products we sell, or driving down the cost of the goods or pricing initiatives. So I think it's a combination of a number of things that were successful in the first quarter that I think will be equally if not more successful as we work our way through the year.

So the way we should think about operating margins really is stepping up from 40 basis to maybe percent by year end?

Yes, I think we've said 50 to 75 the first half, because of the via cell impact, and then getting up to kind of 75 to 100 by the back end.

Okay. That's great. And then just on the mobile phone opportunity. Are you currently shipping primarily to one customer, or are these multiple customers that you now have orders from? Just trying to understand the level of sustainability of that business. Thanks.

So in the flash -- that's going to multiple customers, in the case of flash modules it's at this point largely going to one customer, but I would say that would change here relatively shortly.

And that's one customer and one phone model.

Okay. How much visibility do you get into the order by your customers. Can you get a sense of how much lag there is between when they give you the order to when you actually have to ship these things?

Is this specific to mobile phone, or across PerkinElmer?

Mobile phones, the flash modules specifically.

I would say we probably have a couple of weeks of visibility into those orders.

Okay. And then just for Jeff, a last one, on Easter falling in Q1, did you see any impact of that at all, or was that not significant enough on the run rate type of businesses to really call it out?

We saw a bit of an impact, but not a measurable impact, and I think the calendar was set well before the year started, so --

Okay. Great, thanks. Great quarter.

Thank you.

There are no further questions at this time. I would now like to turn the call back over to management.

Okay. Thank you. So we're off to great start here in 2008. I think we see good momentum across most of our businesses, and I look forward to continuing to share with you our progress against our priorities in the coming months ahead. Thank you for participation in today's call and interest in PerkinElmer.