October marked the worst month for the US stock market in 21 years as the Dow Jones Industrial Average, S&P 500 and NASDAQ fell 14.1%, 16.9% and 17.4%, respectively. On October 8, the Federal Reserve cut interest rates by 50 basis points to 1.5%. However, the Dow, S&P 500 and NASDAQ fell 20.9%, 22.8% and 21.1% in the first two weeks of the month, respectively. On October 29, the Fed cut rates by another 50 basis points to 1.0%. Despite the report on October 30 that third-quarter US GDP shrunk 0.3%, the markets ended the week with the biggest weekly gain in 34 years. The Dow, S&P 500 and NASDAQ each climbed more than 14%.

All four of the IBO Stock Indexes traded lower in October, with the Laboratory Instrumentation Stock Index declining the most, falling 22.6%. The Lab Consumables/Equipment, Process/Metrology/Motion Instrumentation and Diversified Instrumentation Indexes dropped 20.0%, 19.5% and 19.0%, respectively.

Laboratory Instrumentation Stock Index

For the month, the Laboratory Instrumentation Index fell 22.6% to close at 456.82. All 23 companies declined in double digits, except for X-Rite, which was down 9%. Bruker declined the most, falling 69%. Year to date, the Index is down 30.4%, with all but three firms trading lower. Sequenom leads the Index, up 88%, while Affymetrix is down 84%.

On October 13, Affymetrix preannounced a revenue shortfall of approximately 20%, sending shares down 17.3% (see IBO 10/15/08). Conversely, on October 14, Varian preannounced better than expected full-year earnings, leading shares up 13.9% (see IBO 10/15/08).

Despite several positive earnings releases, Index stocks traded predominately lower due to market conditions. On October 21, Waters announced a 31.7% jump in adjusted EPS to $0.79 (see page 12), $0.05 better than analysts’ expectations, and increased its full-year EPS range by $0.07–$0.01 to $3.32–$3.36. Yet shares declined 4.2%. On October 22, Applied Biosystems reported EPS growth of 50% to $0.48 (see page 12), $0.07 better than analysts’ consensus. Cepheid reported on October 29 a loss of $0.11 a share, in line with expectations, leading shares up 12.1% the following day. On October 29, Varian reported that its quarterly EPS grew 27.7% to $0.83 (see page 12), beating analysts’ consensus by $0.10. The company also forecast 2009 EPS of $2.80–$3.00. On the same day, Dionex announced that EPS grew 45.5% to $0.64 (see page 12), $0.09 ahead of analysts’ expectations. Dionex expects second-quarter EPS of $0.82–$0.85.

Other companies reported mixed earnings results or tepid forecasts. On October 23, Thermo Fisher Scientific reported adjusted EPS growth of 16.9% to $0.76 (see page 12), and increased the lower range of its 2008 guidance by $0.02 to $3.13–$3.17 per share. However, shares declined 6.4% due to lower revenue guidance. On the same day, PerkinElmer announced that third-quarter EPS grew 15.6% to $0.37 (see page 12), $0.02 ahead of expectations, and the company decreased the lower end of its 2008 earnings by 1% to $1.48–$1.53 a share. On October 28, Beckman Coulter reported adjusted EPS of $0.78, $0.04 below analysts’ expectations, but higher than expected revenues. The following day, Sequenom reported a loss of $0.18 per share, $0.01 wider than expected, but positive results for its Down syndrome screening study sent shares up 10.4%.

There were also some disappointing earnings results as well. After the close on October 21, Illumina announced adjusted EPS grew 8% to $0.13 (see page 12), $0.04 lower than analysts’ expectations, sending shares down 22.2%. On October 24, Affymetrix reported a loss of $0.19 per share, $0.04 wider than expected. Symyx Technologies reported on October 29 a loss of $0.02, $0.01 wider than expected, and lowered its full-year guidance by approximately $0.07 to a loss of $0.31–$0.36 per share. The following day, shares fell 36.5% to a historical low. Bruker reported on October 30 adjusted EPS of $0.11, $0.01 below market consensus, leading shares down 29.3%.

Cowen & Company initiated coverage of Luminex with a “Neutral” rating on October 10. On October 13, GARP Research downgraded Waters to “Neutral” from “Buy.” Deutsche Securities downgraded Affymetrix to “Sell” from “Hold” on October 24. On the same day, Illumina approved a $120 million stock buyback, sending shares up 7.7%.

Process/Metrology/Motion Instrumentation Stock Index

The Process/Metrology/Motion Instrumentation Stock Index dropped 19.5% to 285.64 in October, with seven companies declining and only ICx Technologies improving, gaining 6%. Veeco Instruments led all decliners, falling 48%. For the year, the Index has declined 27.8%, with all eight companies in negative territory, led by Nanometrics, which is down 88%.

After the market close on October 27, Veeco reported EPS of $0.15, $0.02 ahead of expectations, but warned that fourth-quarter and 2009 revenues could be adversely affected by economy. Shares traded down 5.7% the following day. On October 28, FEI announced adjusted EPS of $0.13, $0.01 better than analysts’ expectations. A couple of days later, Zygo reported fiscal first-quarter EPS of $0.05, $0.03 ahead of analysts’ forecasts. Strategic Diagnostics reported on October 30 a loss of $0.03 a share, $0.01 wider than expected, yet shares climbed 20.9% the following day. Earlier in the month, on October 16, Zygo announced an agreement to merge with ESI for approximately $10.30 a share, leading shares up 15.6%. Strategic Diagnostics announced on October 20 a $3 million share-repurchase plan over the next 12 months.

Lab Consumables/Equipment Stock Index

For October, the Laboratory Consumables/Equipment Stock Index declined 20.0% to 370.46, with all seven companies trading lower. QIAGEN led the decline, falling 28%. For the year, the Index has lost 26.7%, with six companies trading lower and Techne up 4%.

On October 21, Invitrogen reported EPS growth of 23.5% to $0.63 (see page 12), $0.04 ahead of analysts’ expectations, yet shares dropped 5.1%. On October 22, Techne reported EPS of $0.74, $0.08 better than analysts’ expectations. On October 30, Millipore reported adjusted EPS growth of 12.0% to $0.93, $0.10 ahead of analysts’ expectations. STARLIMS preannounced a shortfall in third-quarter earnings on October 6 (see IBO 10/15/8), sending shares down 11.7%. On October 12, Sigma-Aldrich announced EPS growth of 18.5% to $0.64, $0.01 below expectations, but reaffirmed its full-year EPS outlook. Shares fell 14.5% the following day. Leerink Swann upgraded Techne to “Outperform” from “Market Perform” on October 13. On October 21 and October 29, UBS and Deutsche Securities upgraded Invitrogen to “Buy” from “Neutral.” On October 21, Pall authorized a $350 million stock repurchase plan.

Diversified Instrumentation Stock Index

The Diversified Instrumentation Stock Index slipped 19.0% this month to 79.64, and is down 33.4% for the year, with all six companies trading lower. Agilent has lost the most, down 25% for the month and 40% for year. Danaher announced EPS of $1.14, $0.01 better than expected, on October 16, leading shares up 7.9%. On October 21, AMETEK reported adjusted EPS growth of 24.5% to $0.66, $0.03 ahead of consensus, and raised it full-year outlook to $2.55–$2.57 from $2.50–$2.54. Two days later, Teledyne Technologies reported EPS growth of 9.3% to $0.82, $0.04 better than analysts’ expectations, and raised its full-year estimate by 1% to $3.24–$3.27. Also on October 23, Roper Industries reported adjusted EPS of $0.82, in line with expectations, but lowered its full-year EPS outlook by $0.03–$0.06 to $3.13–3.16. Shares declined 11.7%. Robert W. Baird upgraded Roper to “Outperform” from “Neutral” on October 13.

International

All five Pacific Region companies declined in double-digits this month. Horiba lost the most value, down 37%. For the year, all companies are trading significantly lower.

Similarly, all 14 European firms in the table lost ground, with Millbrook Scientific Instruments falling the most, down 50%. For the year, all European companies are trading in negative territory, led by Cybio, which is down 78%.

Market Value 52 Week Price Change Change EPS EPS LTD/ FY R&D/

Company: Exchange (US $000s) Low High 10/31/2008 1 Month YTD P/E 12 Month FY Equity ROE Sales

Laboratory Instrumentation

Affymetrix: o $253,068 3.51 25.52 $3.69 -52% -84% 11 0.33 0.17 71% 2% 20%

Applied Biosystems: n $5,368,675 25.85 37.67 $30.83 -10% -9% 16 1.90 1.78 18% 15% 9%

Beckman Coulter: n $3,211,553 45.82 77.14 $49.92 -30% -31% 20 2.50 3.30 91% 15% 10%

Bio-Rad Laboratories: a $2,346,072 64.40 115.23 $85.38 -14% -18% 21 4.01 3.41 52% 10% 10%

Bruker BioSciences: o $678,605 3.47 17.22 $4.09 -69% -69% 9 0.46 0.59 93% 17% 11%

Caliper Life Sciences: o $67,056 1.15 5.95 $1.40 -50% -75% N/A -0.52 -0.51 7% N/A 18%

Cepheid: o $682,976 8.52 33.36 $11.87 -14% -55% N/A -0.49 -0.50 4% N/A 24%

Combimatrix: n $38,324 5.40 16.38 $6.36 -57% -16% N/A -1.71 -2.10 1% N/A 100%

Dionex: o $998,385 42.84 87.54 $53.83 -15% -35% 19 2.88 2.77 16% 27% 8%

Harvard Bioscience: o $97,985 3.01 5.19 $3.10 -33% -32% N/A -0.05 -0.04 4% N/A 4%

Illumina: o $3,691,368 21.90 47.88 $30.83 -24% 4% N/A -2.43 -5.14 2% N/A 20%

Luminex: o $665,768 12.57 27.00 $18.65 -25% 15% 85 0.22 -0.08 4% N/A 21%

MOCON: o $47,503 7.91 11.83 $8.35 -20% -27% 12 0.70 0.67 1% 15% 7%

O.I. Corp: o $24,088 9.40 13.95 $9.10 -14% -30% 54 0.17 0.20 0% 3% 12%

PerkinElmer: n $2,145,785 15.42 29.99 $17.94 -28% -31% 14 1.26 1.11 53% 8% 6%

Sequenom: o $1,064,070 5.00 29.14 $18.00 -32% 88% N/A -0.73 -0.54 5% N/A 35%

Starlims: a $34,797 3.32 12.58 $3.99 -45% -62% 7 0.54 0.57 2% 10% 12%

Symyx Technologies: o $149,005 4.05 12.58 $4.41 -55% -43% N/A -0.37 0.56 4% 7% 53%

Thermo Fisher Scientific: n $17,803,100 33.95 62.77 $40.60 -26% -30% 18 2.20 1.76 31% 5% 2%

Transgenomic: o $20,660 0.41 0.87 $0.42 -30% -22% N/A -0.08 -0.04 1% N/A 13%

Varian Inc.: o $1,082,174 27.32 73.49 $36.85 -14% -44% 17 2.21 2.21 11% 11% 7%

Waters: n $4,404,791 37.00 81.84 $43.80 -25% -45% 14 3.18 2.62 123% 46% 5%

X-Rite: n $93,728 1.10 14.23 $3.22 -9% -72% N/A -1.51 -0.72 334% N/A 14%

Process/Metrology/Motion Instrumentation

FEI Company: o $783,799 15.87 29.14 $21.01 -12% -15% 26 0.81 1.36 33% 12% 14%

ICx Technologies: n $275,510 3.81 15.50 $8.18 6% -15% N/A -1.29 -2.85 N/A N/A 15%

MTS Systems: o $562,684 27.77 45.55 $32.48 -23% -24% 13 2.53 2.29 12% 22% 5%

Nanometrics: o $22,660 1.01 11.04 $1.22 -42% -88% N/A -4.38 -0.22 15% N/A 13%

RAE Systems: n $83,441 1.03 3.35 $1.41 -17% -48% N/A -0.15 -0.18 20% N/A 9%

Strategic Diagnostics: o $27,126 0.95 6.46 $1.33 -18% -75% N/A -0.15 0.04 0% 2% 11%

Veeco Instruments: o $243,485 6.86 19.82 $7.74 -48% -54% N/A -0.27 -0.56 45% N/A 15%

Zygo: o $147,422 4.66 13.79 $8.59 -32% -31% 57 0.15 0.07 2% 1% 15%

Lab Consumables/Equipment

Invitrogen: o $2,792,486 20.28 49.58 $28.79 -24% -38% 9 3.17 2.69 71% 8% 9%

Kewaunee Scientific: o $23,259 7.00 20.73 $9.05 -18% -54% 7 1.34 1.23 23% 12% 0%

Millipore: n $2,897,745 45.95 83.20 $51.89 -25% -29% 18 2.84 2.48 94% 12% 7%

Pall: n $3,219,590 21.79 43.19 $26.41 -23% -34% 15 1.76 1.76 109% 19% 3%

QIAGEN: o $2,930,074 12.53 23.83 $14.26 -28% -32% 65 0.22 0.28 82% 4% 10%

Sigma-Aldrich: o $5,618,466 34.42 63.04 $43.86 -16% -20% 17 2.58 2.34 25% 19% 3%

Techne: o $2,674,318 58.92 82.92 $69.02 -4% 4% 25 2.80 2.64 N/A 21% 9%

Diversified Instrumentation

Agilent Technologies: n $8,254,680 18.75 38.24 $22.19 -25% -40% 13 1.69 1.57 46% 20% 13%

AMETEK: n $3,576,935 27.48 53.12 $33.25 -18% -29% 14 2.46 2.12 87% 18% 5%

Danaher: n $19,983,666 49.06 89.22 $59.24 -15% -32% 17 3.53 3.72 48% 15% 5%

Mettler-Toledo Int’l: n $2,714,981 68.22 119.84 $76.54 -22% -33% 14 5.29 4.70 136% 31% 5%

Roper Industries: n $4,274,283 35.22 70.58 $45.35 -20% -27% 15 3.05 2.68 103% 14% 3%

Teledyne Technologies: n $1,663,305 36.75 66.21 $45.57 -20% -15% 15 3.14 2.72 87% 19% 4%

Laboratory Instrumentation Stock Index 456.82 -22.6% -30.4% 18 39% 7% 7%

Process/Metrology/Motion Instrumentation 285.64 -19.5% -27.8% 19 37% 7% 8%

Lab Consumables/Equipment Stock Index 370.46 -20.0% -26.7% 17 67% 10% 3%

Diversified Instrumentation Stock Index 79.64 -19.0% -33.4% 15 61% 17% 7%

Dow Jones Industrial Average 9325.01 -14.1% -29.7%

S&P 500 968.75 -16.9% -34.0%

NASDAQ Composite 1720.95 -17.4% -35.1%

Price

Region Market Value Market Value 10/31/2008 Change Change EPS EPS LTD/ FY R&D/

Company (US $000s) (Local 000s) (Local) 1 Month YTD P/E 12 Month FY Equity ROE Sales

Pacific Shares

Hitachi High-Technologies: t $2,221,456 ¥216,525,284 ¥1572 -25% -36% 10 ¥152.87 ¥195.80 11% 11% 2%

Horiba: t $619,654 ¥60,397,675 ¥1422 -37% -65% 8 ¥187.93 ¥204.39 21% 11% 7%

JEOL: t $222,140 ¥21,652,010 ¥273 -17% -43% 8 ¥35.50 ¥35.50 73% 9% 6%

Shimadzu: t $1,999,589 ¥194,899,909 ¥659 -22% -34% 18 ¥37.53 ¥37.53 26% 9% 3%

Techcomp: si $33,557 SGD 22,778 $0.24 -23% -50% 6 $0.04 $0.04 4% 17% 1%

European Shares

Genetix: l $395 £24,266 £0.34 -31% -34% 10 £0.03 £0.03 7% 6% 8%

Millbrook Scientific Instruments: l $12 £721 £0.01 -50% -53% N/A £0.00 £0.00 0% 0% 12%

Oxford Instruments: l $1,482 £91,069 £1.87 -19% -6% 34 £0.06 £0.06 87% 4% 7%

Renishaw: l $6,265 £385,051 £5.29 -30% -15% 11 £0.48 £0.48 16% 21% 18%

Robotic Technology Systems: l $35 £2,182 £0.04 -7% -64% N/A -£0.06 -£0.06 9% N/A N/A

Spectris: l $10,071 £619,014 £4.98 -25% -27% 8 £0.61 £0.71 46% 28% 9%

Alpha MOS: c $10,431 € 8,117 € 3.10 -8% -22% N/A -€ 0.14 -€ 0.14 11% N/A N/A

Analytik Jena: g $30,774 € 23,948 € 5.10 -17% -24% 11 € 0.47 € 0.40 47% 6% 8%

Biohit: h $15,129 € 11,773 € 0.91 -39% -42% N/A -€ 0.09 -€ 0.12 76% N/A 6%

Cybio: g $5,816 € 4,526 € 0.90 -14% -78% N/A -€ 0.91 -€ 0.91 12% N/A 7%

Sartorius: g $206,791 € 160,924 € 9.44 -42% -65% 6 € 1.47 € 1.78 52% 9% 7%

Tecan: s $529,120 CHF 605,843 CHF 52.0 -6% -24% 12 CHF 4.37 CHF 4.54 30% 26% 10%

Biotage: st $693 SEK 5,341 SEK 6.0 -16% -30% 7 SEK 0.87 SEK 1.12 1% 12% 12%

Exiqon: no $96,354 DKK 558,313 DKK 23.0 -4% -39% N/A -DKK 3.95 -DKK 3.35 1% N/A 59%