Good morning, ladies and gentlemen, and welcome to the Owens & Minor First Quarter 2015 Financial Results Conference Call. My name is Marcus and I will be your operator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of this conference call. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the presentation over to your host for today's call, Mr. James Bierman, President and Chief Executive Officer of Owens & Minor. Please proceed, sir. James L. Bierman - President, Chief Executive Officer & Director: Thank you, Marcus. Good morning everyone and thank you for your interest in Owens & Minor. This morning, we will be reviewing our first quarter 2015 financial results. With me are Randy Meier, our Chief Financial Officer and Grace den Hartog, our General Counsel. But before we begin, Trudi Allcott will read a Safe Harbor statement. Trudi? Truitt Allcott - Director-Investor & Media Relations: Thank you, Jim. Our comments today will be focused on financial results for the first quarter of 2015, which are included in our press release. In our discussion today, we will reference certain non-GAAP financial measures. Information about these measures and reconciliations to GAAP financial measures are included in our press release and in the supplemental slide presentation, both of which are posted on our website. Also, our call today will be archived on the website. In the course of our discussion today, we may make forward-looking statements. These statements are subject to risk and uncertainty, could cause actual results to differ materially from those projected. Please see our press release and our SEC filings for full discussions of these risk factors. And finally, we will be participating in the…

Yes. Our first question comes from the line of Glen Santangelo, Credit Suisse. Please proceed with your question. Glen J. Santangelo - Credit Suisse Securities (USA) LLC (Broker): Yeah, thanks and good morning. Just two quick ones. Jim, first on the International segment, you obviously posted the second consecutive quarter of profits within that division. I know the revenue line might be difficult to predict given some of the transition of fee-for-service, but do you feel comfortable with all the customer movement that from a profitability perspective we should be profitable now every single quarter, sort of, going forward or do you think there's, given some of the recent contract noise you talked about that we could dip into negative profitability again at some point this year? James L. Bierman - President, Chief Executive Officer & Director: Yeah, Glen, great question. I would say that as we look at the guidance that we gave for the full year and the additional insight that we provided relative to the major, I would call, either success factors or components of achieving that targeted guidance, probably the section that had the greatest degree of variability around it had to do with the International segment. Not only were we reversing a negative trend, as you alluded to in earnings, but we had a customer that we had a dispute with. I definitely think as we look at where we are at the end of the first quarter that we have significantly reduced the level of variability around that component. That being said and the fact that we don't give quarterly guidance, I'd stop short of predicting what the ebbs and flows may be going forward, other than to say we're feeling more comfortable today than we did back in December. Glen J. Santangelo -…

Our next question comes from the line of Lisa Gill from JPMorgan. Please proceed.

Hi, thanks very much. Randy, can you quantify what the FX impact was on the quarter? Richard A. Meier - Executive Vice President & Chief Financial Officer: Sure. We had about $17 million of top-line exposure. When you drop down to gross profit, it was significantly reduced, and when you get down to the operating margin, it was about a push. We remain fairly, naturally hedged to currencies, although you will continue to see exposure on the revenue line. So, net-net, as we have said for the past year or so, we remained pretty well hedged naturally based on just our operating expenses to our gross margin.

And then just a bigger picture question for you, Jim, would just be around what you are seeing out there in the environment right now, you talked about working more collaboratively with your clients, your customers that the hospitals, as we think about the changing reimbursement landscape, how will that impact your business going forward? And can you give us more color on what you see as the expansion of service offerings that you believe can improve your margins over time? James L. Bierman - President, Chief Executive Officer & Director: Sure, again, I think the expansion of our service offerings is probably best embodied in the acquisition of the packaging capabilities that we – the transactions that we did towards the end of 2014. Remember we draw a distinction that the acquisition of the packaging business here domestically in the United States had primarily a provider focus, whereas the acquisition of the packaging capabilities in the UK or Ireland had much more to do with focusing on the manufacturer segment of the business. We think there's real opportunity in bringing those skill-sets together and we're referring to it in our terminology as a new offering that is a unitized delivery. So, it has everything to do with getting the product to the point of care, but most importantly, getting it at the right unit of measure and bundled with or packaged with additional products that would be needed for a procedure or for a service to a patient. We think that we're uniquely positioned to do that and we're finding a significant interest and traction in that offering in the marketplace. As to the first part of your question, as to the future of reimbursement and its knock on impact to either margin or revenue model for healthcare distributors, I think that's still evolving. We're in conversations with some of the leading healthcare companies in the United States who have thought leaders around this space. Certainly the whole concept of a bundled payment and risk-based payments are the topic of discussion. How that plays out still remains to be seen, and I think it's premature to offer any conjecture at this point.

Jim, just so I understand this, when you talk about your new offering for a unitized delivery, can you talk about how big that is in your business today? Just so we can have an idea of where it could potentially go. I mean, how penetrated can you get? How big of an opportunity is this? James L. Bierman - President, Chief Executive Officer & Director: Yeah, I think there will be more on this as the year unfolds. I would characterize it as a new offering in contrast of that which has historically been offered by the Medical Action business here in the United States or the packaging business in the UK. So, I think it will evolve, but the interest around it is significant. And the fact that providers and manufacturers can work with a packaging company such as ourselves, that really is neutral in a sense to the product that's placed and bundled is the differentiator we have in the marketplace.

Okay. That's helpful. Thank you.

Our next question comes from the line of Robert Jones from Goldman Sachs. Please proceed with your question. Robert P. Jones - Goldman Sachs & Co.: Thanks for the questions. Jim, the quarter saw solid domestic revenue growth and I think you guys called out a bit of a mix shift towards your larger clients is helping that. I was wondering if you could give us any sense of the underlying domestic utilization from your existing customers that you saw in the quarter? James L. Bierman - President, Chief Executive Officer & Director: Help me understand that question just a little more, Robert, if you will... Robert P. Jones - Goldman Sachs & Co.: So, it sounds like you guys say... James L. Bierman - President, Chief Executive Officer & Director: What do you call underlying...? Robert P. Jones - Goldman Sachs & Co.: Well, I mean, like are you seeing a pickup in core demand at your customers? Are they coming to you saying volumes are up on a same-store basis within your larger customer base? James L. Bierman - President, Chief Executive Officer & Director: I see. Yeah, so I think when we comment on that, we are looking and distilling down to the concept of a comparable period, comparable set of customers, stop short of using same-store sales, but I mean that ostensibly is how one would think about it and refer to it, to get to the core of the utilization trend in the United States. So, yes, we have seen a pickup in that. Robert P. Jones - Goldman Sachs & Co.: That's helpful. And then you talked a little bit about your customers being excited about some of the new offerings, you mentioned packaging, unitized delivery. Your major U.S. competitor has been pretty aggressive…

Our next question comes from the line of Robert Willoughby from Bank of America. Please proceed.

Thanks. Maybe I think to Glen's question, looking at sort of the earnings progression over the course, I know you mentioned providing quarterly guidance per se, but I guess we're modeling, obviously improving revenues and a bigger improvement in profitability over the course of the year. But what are you assuming below the line? How much debt will you pay down and the tax rate for the year did you mention? Richard A. Meier - Executive Vice President & Chief Financial Officer: Glen, this is Randy. We haven't given any guidance particularly to that and we wouldn't expect to see any dramatic change in our balance sheet as we move forward. And we've given guidance to the tax rate being in the high 30%s. I believe we had a 38% to 39% range, which on an adjusted basis, were slightly below that for the quarter. So, I think when you add that all up, we feel comfortable with where we positioned ourself with the first quarter. And we think as with the guidance that we gave and kind of the segment that Jim outlined in his remarks, that the first step towards the full year has been a real positive one and we can build on that as we go throughout the year. So, I don't think we've got any change. We reiterated guidance and we're pretty comfortable with being able to hit the range that we've offered folks.

For uses of cash then, Randy, just haven't accumulated on the balance sheet or... Richard A. Meier - Executive Vice President & Chief Financial Officer: I think over the past couple of years, we've been pretty aggressive with both the dividend rate and how we've deployed capital and returned capital to shareholders, so I would think that what we did last quarter in terms of our dividend and we had historically tried to maintain share count in terms of our repurchase. I'd think those things would continue throughout the year. And then we've got some modest expectations about capital expenditures, consistent with last year and our guidance. So, again, I wouldn't expect we're going to see too much building of cash. We have a pretty good first quarter. I think that gave everybody some comfort that the yearend number on the cash flow is a bit of an anomaly and some timing differences. So I think we're, again, in good position to continue to execute our game plans for 2015.

Great. Thank you.

Our next question comes from the line of Evan Stover from Robert W. Baird. Please proceed with your question. Evan A. Stover - Robert W. Baird & Co., Inc. (Broker): Hey, wanted to talk about International for a second. So if I strip out FX and the ArcRoyal acquisition, looks like the constant dollar organic growth there was about 5% to 6% this quarter. How should I think about that growth rate moving forward through the rest of 2015? And I guess in particular in light of the comments you made today, I'm wondering how the exited UK customer will impact the – at least the topline outlook in that business this year. Richard A. Meier - Executive Vice President & Chief Financial Officer: I think when you take the negative 1.8% and you back out acquisitions and some of the FX, we were at about 3% year-over-year growth rate. We did point out that that did incorporate a pretty significant change of one customer from a buy/sell to a fee-for-service, which fairly dramatically changes the orientation of both revenue to more of a gross profit position. So that did have some headwind related to our trend. Overall, our European business, we continue to expect it to grow nicely year-over-year. And as we said in the fourth quarter and I think back at Investor Day, if we didn't get to an amicable relationship with a particular customer in the UK that we'd probably have a little bit of cost associated with unwinding that, but as again, we reiterated guidance, so we're pretty comfortable with being able to work through that. Clearly that will have some impact to top line growth. That will probably be more of a – little bit of a second half of the year impact as we…

Our next question comes from the line of Sean Dodge from Jefferies. Please proceed with your question.

Hi. Good morning. Thanks. Jim, can we maybe start with an update on the search for your successor? James L. Bierman - President, Chief Executive Officer & Director: Sure, Sean. Well, I think the search committee of our board of directors has been actively involved in candidate interviews. I think they're very pleased with the progress of the search and the opportunities that they've seen. So, it's underway and any additional comments probably would be premature at this time.

Okay. Now that the International segment appears to be stabilizing somewhat, can you give us a sense of timing around when you'll begin to contemplate or look at introducing more provider-focused services into Europe? Richard A. Meier - Executive Vice President & Chief Financial Officer: Sure, Sean. I think, as we look out in the future, we continue to look at different ways to continue to expand the business. Certainly UK is not as homogenous market as the U.S. is as well, so you've got to approach it in a slightly different fashion. Today we do have a few provider customers in the UK that we provide some basic services to, so it's not as if we aren't doing that today as we look to the future. So, I think there's a platform and a basis for us to do those things, although we don't have any plans today to directly invest into a particular provider platform in Europe.

Got it. All right. Thank you.

Our next question comes from the line of David Larsen from Leerink. Your line is now open.

Hi. On the International side in 1Q of 2015, was there good client retention in the quarter? I'm just comparing the back half of 2014 revenue to 1Q of 2015. I mean were there any significant customer losses that occurred in 1Q of 2015 internationally or was there like 100% retention? Thanks. Richard A. Meier - Executive Vice President & Chief Financial Officer: Well, other than the fact that we terminated a relationship with our customer in the UK, we saw fairly reasonable customer retention and we've got a European-wide price increase going on with the vast majority of our customers. We've had some good wins that continue to improve and sustain the growth rate. But clearly, as with all the businesses, we've had some minor losses. This year, though, I would characterize is we haven't had any significant or major losses in any particular market. We've had a pretty good retention rate and we're seeing a lot of activity around a lot of what I'd characterize are multi-country customers looking to expand into other countries or other regions, which is all part of the leveraging of the platform in Europe. So we continue to feel pretty good about where the European business is moving. We have now almost had a full year of profitability on the European Continental side of it as we continue to work through the UK challenges. But overall, I think we're pleased with where we are at the end of the first quarter.

That's very helpful. And then can you just comment on the sales force internationally? Any sense for how many sales people there are and how long they've been there and just any metrics you could put around that would be very helpful. Thanks. Richard A. Meier - Executive Vice President & Chief Financial Officer: There's a fairly lean sales organization in Europe. Again, it's a different sales organization than the one we have here. It's more focused on the manufacturing side of the fence. It's selling 3PL services, and again, you've got more of a regional and local focus in some areas. We've spent a particularly long period of time in how we want to position that organization, both last year and as we move into this year. But I would say we manage a fairly lean organization that is looking both on a pan-European basis to leverage our European and global customers as we align with some of our U.S. manufacturing activities as well as continue to service our local customers as well. So we incorporate a lot of key account and customer service managers as well into that organization.

Okay. That's helpful. And then is International still two-thirds fee-for-service and how much did ArcRoyal contribute in terms of revenue in the quarter? Richard A. Meier - Executive Vice President & Chief Financial Officer: It is still a two-thirds fee-for-service. That's about where we are, and that would include ArcRoyal, as ArcRoyal is providing services to the manufacturer. And we don't break out our products and packaging segment. So we'll have to leave a little mystery to that going forward. But suffice to say, they did contribute in the quarter and we continue to see very good activity in leveraging our packaging business across our manufacturing platform, both over in Europe as well as here in the United States.

Okay. Thanks a lot. Appreciate it.

Our next question comes from the line of Steven Valiquette from UBS. Please proceed with your question.

Yes, thanks. Just a couple of quick ones here at this stage of the call. First, you touched on this earlier, but it was good to see a nice recovery in the operating cash flow in the first quarter of 2015 after the result in calendar 2014. So I guess is there any just rough approximation for what you think that OCF will shake out for the full-year 2015 recognizing that some of it may be a pull forward from 2014? Richard A. Meier - Executive Vice President & Chief Financial Officer: We don't give particular specific guidance around cash flow, but if you look back over the last couple of years and you look at what, generally speaking, our cash flow has been, it's always been, on average, on a rolling basis about $150 million to $175 million. So, I think if you kind of take that as a proxy, I think that's a reasonable place to where any given quarter, certainly last quarter highlighted it, we've got some timing issues where we had some use of cash and otherwise, but generally if you go back and do a rolling four quarters, you're going to probably see us oscillate around that $150 million to $175 million range.

Okay. I'm not sure if somebody just asked this or not, but just on the Medical Action, is there any update on where the accretion may shake out for 2015 now that you've owned that asset for little bit longer? Maybe any quantification as opposed to just simply the word accretive would be helpful? Thanks. James L. Bierman - President, Chief Executive Officer & Director: I guess, Steven, what I would do is go back to what we said at Investor Day in that the bridging schedule that we've provided that talked about our acquisition, so this would be both Medical Action and ArcRoyal, net of the new financing that we did that Randy has referred to, we fundamentally were saying that it would contribute around 4% to 6% of the 10% targeted growth rate that we were looking at. And I think the other color we offered is that in the initial year of ownership that had more to do with getting cost synergies and cost reduction as to anything else. And then my final comment on this would be – and this was in part of the prepared remarks – that we're generally on schedule or on what we've targeted at this point of the year, we're slightly ahead on some of the timing of some of the cost reduction efforts we've put in place. So that's a fair amount of color around the acquisitions.

Yes, okay. That's perfect. Thanks.

Next we have a follow-up from the line of Glen Santangelo from Credit Suisse. Please proceed. Glen J. Santangelo - Credit Suisse Securities (USA) LLC (Broker): My follow-up has been answered. Thank you. James L. Bierman - President, Chief Executive Officer & Director: Thank you, Glen.

There are no further questions at this time. I will now turn the call back over to Mr. Bierman for his closing remarks. James L. Bierman - President, Chief Executive Officer & Director: Thank you, Marcus. Well, that concludes our first quarter 2015 conference call. And again, thank you all for your interest in Owens & Minor. Have a good day.