On Tuesday, Waters Corporation (NYSE:WAT) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Daniel Brennan – Morgan Stanley: As we think about your second half guidance could you just maybe put a little more details around, how you’re thinking about growth from your different end-markets and/or geographies given the lower top line, just want to think about like where you see the biggest contraction versus what you were think before?
Douglas A. Berthiaume – Chairman, President and CEO: Sure. John, do you want to…
John Ornell – VP, Finance and Administration and CFO: Sure, I’ll go through that. From a geographical perspective, Dan, we are thinking about that U.S. being kind of a mid single-digit growth driver for the business as we move through the back half of the year. Europe and Japan are kind of flat as we think about continued pressures in Europe remaining and no sign of anything getting much better there as we think about Q3 and Q4. Asia on the other hand, I’d say, we continue look at kind of high single-digit type of an expectation for that part of the world, and a little bit more conservative view of ROW places like Latin America and other areas that had been growing closer to double-digits. We are now thinking it might be closer to mid single-digits, so all of that pulls the growth down to something that gets somewhere between 2% and 4%.
Daniel Brennan – Morgan Stanley: When you think about after the first quarter guidance reduction given it was related with pharma and you guys thought you had caught obviously enough about, lower numbers enough to reflect the issue that you had seen and built in even a cushion, and now we’re coming down again. What’s your level of confidence? Just kind of how – can you give us anymore kind of feeling for the level of conservatism that you feel this new guidance incorporates?
John Ornell – VP, Finance and Administration and CFO: Well, we try to put us and you kind of in the middle of a range of possible outcomes. I’d say, we’ve been challenged to achieve the middle of the range even though we set out each quarter thinking that’s where we are. This past quarter was very challenging, and as we look forward even though our field continued to be optimistic the data we’re getting back at ground level concerning the field interactions with their customers suggest that they really have demand. I think if that gets translated up the hierarchy though clearly management controls in our customers side in terms of available spending has tempered what we think is a reasonably robust level of demand at the ground level. So as we look out at the second half and have taken our expectations down a notch, we don’t think that the second half gets materially worse, but we don’t see a lot of signs that there is a particular factor that’s going to create an uptick. So we think we’re a little bit on the conservative side as we look at second half, but I freely admit that it’s a challenging environment and we’re still keeping a very tight handle on the spending lever.
Daniel Brennan – Morgan Stanley: Thanks Doug, just on the OpEx control the SG&A flat in the second half of the year, what is that level of your spending out necessitate is that within the normal course of business or is there one-time kind of headcount reduction that are occurring and how much more control do you have to bring that down further if things turn out to be weaker than expected? Thank you.
Douglas A. Berthiaume – Chairman, President and CEO: There is nothing extraordinary or restructuring in that Dan its tight control on unnecessary travel. It’s some natural in terms of commission and variable pay won’t be as originally anticipated given the lower sales levels. Certainly headcount additions are unlikely in this environment. So all of the things in every year we keep a number of planned incremental spending in reserve until we see some of our planned growth come together and as it hasn’t we’re putting those increased plans in advance. So I’d say it is certainly an uptick in the level of control of spending and the deferral of things that are directly necessary to create sales. But it’s not anything extraordinary in terms of our restructuring if we see a significant change in our expectations we would of course look at what we needed to do to keep our P&L structure in balance.
Lackluster Industrial Segment
Ross Muken – ISI Group: I am interested on sort of the pacing in the quarter in terms of the demand flow through, what we have seen in sort of survey data and anecdotally heard at least in the industrial exposed and applied exposed customer bases was and the trend into June significantly sort of deteriorated and that sort of continued into July and we’ve also seen that some of the macro PMI data I guess, what’s your assumption for sort of the trajectory it seems like, at least on the industrial side you are looking for the deterioration to sort of moderate and I guess is that being confirmed by the order rates you’re seeing or the anecdotal things you’re hearing from customers? Then I want to turn to sort of the pharma side.
Douglas A. Berthiaume – Chairman, President and CEO: Ross I would say we didn’t really see quite that inflection point in the quarter. I’d say, maybe some weakening as we went through, but the industrial segment of our business was lackluster throughout. I’d say in our outlook for the second half we certainly don’t anticipate it getting much better, but we don’t see it dropping off a cliff. Now part of that’s specific to us. We’re getting a very good reception to our UPC-Squared system introduction and that’s having particularly raising eyebrows in certain industrial markets because of its application there. So, we might have a specific circumstance that helps us in those markets, that haven’t been there in the past.
Ross Muken – ISI Group: Turning maybe to the pharma side it seems like most of the growth is coming from specialty generic CRO customers given sort of the weakness we’ve seen in emerging markets I mean how versus sort of the last time we saw a deterioration in those markets I guess that was probably ’08 how would you expect just the pacing or moderation of growth there to occur or you’re not assuming it will? Then on the of the traditional pharma side in terms of the larger folks what do you think is the crux sort of slowdown there I mean would have thought given the commentary we’ve heard at pharma so far this year demand would be actually a bit better and maybe that’s encouraging, but I’m just trying to get a sense for kind of what you think the key driver there is on the large pharma side?
Douglas A. Berthiaume – Chairman, President and CEO: On the large pharma front, I think it’s very lumpy and largely specific to individual accounts. We saw pretty good results in large pharma in Europe and decent results in the United States. We saw growth in those large accounts, but it certainly wasn’t anything that we’d call robust. The greater part of our growth story in the broad pharmaceutical market is in specialty pharma, biotech, CROs and generics. But generics were certainly tampered by India, and India there is no question that is the weakness in the rupee is causing consternation amongst those accounts. I continue to believe that that will get better. I don’t think that there’s a way for those businesses to delay spending forever and we saw a little bit of a pickup as we ended the second quarter there. We saw particularly good pickup in underlying demand, but some of those accounts really faced issues in clearing letters of credit and getting their banks to release credit. So, I think they are all working on that and I anticipate that India is going to get better over the next two or three quarters, and that’s basically hurt our growth rate in that area in the first half of this year. So, outlook, big pharma stays pretty much in the route that’s in, if some accounts spending robustly, but that’s not true across the board. We think CRO spending is likely to pick up from somewhat restrained levels in the first half and the net of that is maybe a little bit better in the future than we’ve seen in the immediate past.
Ross Muken – ISI Group: One last quick one John anything in the forecast was sort of the fiscal cliff/sequester in terms of any assumption of different purchasing in the U.S.?
John Ornell – VP, Finance and Administration and CFO: No I’d say at this point in time at least we are not getting feedback from our customers that would suggest that, that event is something that’s going to strike us between now and the end of the year. I suppose that could change but certainly to date we haven’t been giving any indications that that’s going to be meaningful event.