On the Surface

United States research market experienced by the Life Sciences segment in the fourth quarter of fiscal 2008 more than offset a small
decline in the Healthcare segment’s capital revenues of 1.2%.
Revenues by segment are further discussed in the section of MD&A titled, “Business Segment Results of Operations.”
Gross Profit. The following table compares our gross profit for the year ended March 31, 2008 to the year ended March 31, 2007:
Years Ended March 31,
(dollars in thousands) 2008 2007
Change
Percent
Change
Gross Profit:
Product $ 325,117 $ 319,066 $ 6,051 1.9%
Service 198,840 185,741 13,099 7.1%
Total Gross Profit $ 523,957 $ 504,807 $19,150 3.8%
Gross Profit Percentage:
Product 40.0% 41.2%
Service 43.9% 43.8%
Total Gross Profit Percentage 41.4% 42.2%
Our gross profit (margin) is affected by the volume, pricing, and mix of sales of our products and services, as well as the costs
associated with the products and services that are sold. Our gross margin decreased 80 basis points to 41.4% for fiscal 2008. In fiscal 2008,
we benefited from labor savings from the transfer of our manufacturing operations from Erie, Pennsylvania to Monterrey, Mexico and from
price increases. However, these benefits were more than offset by increases in raw material costs, increases in transportation costs, and the
unfavorable impact of foreign exchange rates.
The gross margins related to our operating segments are further discussed in the section of MD&A titled, “Business Segment
Results of Operations.”
Operating Expenses. The following table compares our operating expenses for the year ended March 31, 2008 to the year ended
March 31, 2007:
Years Ended March 31,
(dollars in thousands) 2008 2007
Change
Percent
Change
Operating Expenses:
Selling, General, and Administrative $ 348,035 $ 326,896 $ 21,139 6.5%
Research and Development 36,916 33,626 3,290 9.8%
Restructuring Expenses 15,461 6,584 8,877 NM
Total Operating Expenses $ 400,412 $ 367,106 $ 33,306 9.1%
NM – Not meaningful.
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