Good afternoon, everyone, and welcome to the Hologic, Inc. Third Quarter Fiscal 2014 Earnings Call. My name is Jamie, and I am your operator for today's call. Today's conference call is being recorded. [Operator Instructions] I would now like to introduce Deborah Gordon, Vice President, Investor Relations and Corporate Communications, to begin the call.

Thank you, Jamie. Good afternoon, and thank you for joining us for Hologic's third quarter fiscal 2014 earnings call. With me today are Steve MacMillan, President and Chief Executive Officer; and Bob McMahon, Chief Financial Officer. Today's call will consist of opening remarks followed by a question-and-answer session. The replay of this call will be archived on our website through Wednesday, August 20, and a copy of our third quarter release is available in the Investor Relations section of our website. Also in that section is a supplemental third quarter financial presentation related to the comments that will be made during today's opening remarks. Before we begin, I would like to inform you that certain statements we make during this call may be forward-looking. These statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from any future results implied by such statements. Such factors include those referenced in our Safe Harbor statement included in our earnings release and in our filings with the SEC. Also during this call, we will be discussing certain non-GAAP financial measures. A reconciliation to GAAP can also be found in our third quarter earnings release. I would now like to turn the call over to Steve MacMillan.

Thank you, Deb, and thank you, all, for joining us today. Before we begin, I'm excited to welcome Bob McMahon, our new CFO, to his first Hologic earnings call. As many of you know, Bob joined the Hologic team during the quarter from Johnson & Johnson. Bob's strong operational and leadership skills are already evident, and we know Bob will have a big impact on our performance and direction in the quarters and years ahead. On today's call, I will: one, review our third quarter results and recent developments; two, give an update on leadership changes; and three, discuss key business highlights, particularly the landmark JAMA publication that came out last month. I'd like to begin by providing some context for where Hologic is today. After steep sales and earnings declines early in the year, we had indicated we hoped to stabilize the business by the end of the year and pave the way for a return to growth in 2015. Our fiscal 2014 results to date now offer a more definitive sign that we have stopped the declines and are returning to growth a little faster than expected. While the absolute growth rate is not the level we aspire to, this was a second straight quarter of sales growth as our turnaround is clearly taking hold. The reported overall sales growth was slightly below last quarter's rate, though this quarter was qualitatively stronger as our Breast Health, Molecular Diagnostics and even our Surgical businesses all grew. Our higher-margin U.S. businesses accelerated, and the outlook for our key U.S. Breast Imaging business strengthened considerably. These results clearly demonstrate improving growth trends with our key franchises strengthening and our financial outlook improving. In addition to the results which we'll discuss further, we put a completely new leadership team in place during…

Thank you, Steve. I am excited to be part of the new Hologic leadership team at a time of tremendous opportunity for the company. I look forward to partnering with Steve and the rest of the senior management team to support the efforts already underway to drive growth and capitalize on new opportunities and deliver improved operating and financial results. I also look forward to building relationships with our investors and the analyst community in the coming months. Our third quarter results are a signal that the turnaround of the company is taking place, but we realize there is more work ahead of us. With that, I will now review our third quarter financial results in more detail. Unless otherwise noted, all of my commentary regarding changes will be on a year-over-year non-GAAP basis. As Steve mentioned, third quarter revenues were $633 million, up 1% on a reported basis compared to the prior year of $626 million and up 0.5% operationally. These results exceeded our guidance range of $615 million to $625 million for the quarter. Now moving on to our results by division, starting with Diagnostics. Revenues of $293 million in this division declined 1.5% in the third quarter. Drilling down into the Diagnostics major business lines. Revenues in our cytology and perinatal business declined 7% to $123 million. International revenues were down 3%, while U.S. revenues declined 9%, primarily as a result of lower U.S. sales of ThinPrep due to ongoing screening interval expansion, and to a lesser extent, a decrease in average selling prices based on customer mix. We had a good quarter on our Molecular Diagnostics business, which increased 7% to $116 million, driven by growth in the U.S. Our core Aptima franchise experienced healthy growth in the high-teens, primarily due to continued uptake at Quest…

Thanks, Bob. Before we take questions, I would like to remind everyone of our priorities and commitments. First and foremost, we are focused on driving sustainable organic growth across all of our businesses, and believe we are already seeing signs of progress on this front. We're committed to reinvigorating our innovation engine and establishing a strong global infrastructure, which will require time and investment, but should yield significant benefits for the company in the long term. We are committed to paying down our debt obligations and restoring the company's financial flexibility while generating the sizable cash flows we have historically realized. We believe focusing on these priorities places us in the best position to drive improved performance and maximize shareholder value. This is a company with some truly breakthrough products, and we are on the path to improve performance. With that, Jamie, please open the call up to questions.

[Operator Instructions] And we'll take our first question from David Lewis with Morgan Stanley.

Two questions, 1 strategic and 1 very specific on the numbers. Steve or Bob, you talked about the growth of mammo in the business the last 2 quarters, that's been very clear. Can you just walk me through the fourth quarter number? Because the implied guidance for the fourth quarter implied a break in that momentum, as I'm sure you're aware last quarter or last year this time, was your easiest comparable. So on a comparable adjusted basis, it implies fourth quarter as sort of decelerating. Is that just conservatism or is there something specific to the fourth quarter? And I have a follow-up for Bob as well.

Sure. I think as you pointed out, David, we are going up against our easiest comp in the fourth quarter. So our reported growth will actually be a little bit better than it was in the last 2 quarters versus year ago. We're still being -- I would say, as we're shifting our guidance, I wouldn't want to signal that I'd say we're going from more conservative to more realistic guidance. We had 2 pretty big beats, but I think we feel pretty good still about the direction, but haven't sat through all the ups and downs and been through the full year cycle here yet to get overly ahead of ourselves on the revenue front. But I think we're feeling reasonably good about where it's headed.

And then, Bob, maybe, if you could indulge us. We've had multiple CEO changes here over the last several years at Hologic, but we haven't had a CFO change in decades. So maybe if you could share with us your perspective from a financial point of view on what are the interesting opportunities as you've gone from a larger organization to a rather small one? What are the opportunities? What do you see short-term? What can you achieve short-term? What do you see long-term? Any help would be very much appreciated.

David, before he answers that, I'd like to jump in and say one of his goals is to prevent the frequency of CEO changes. So with that, Bob will take over here.

It's a good question. You had a number of questions in there and maybe I'll take it in a couple of areas. When I think about what are some of the focus areas that I'm going to be looking at, both short-term and long-term, I'll really speak to kind of 3 areas. And first and foremost, as Steve talked about, what we want to do with this company. I'm really going to be focused on helping improve the operational execution of the business. This is going to be including working with some of the new leadership, as he mentioned, in our divisions, to increase the profitability and helping drive better performance by instilling some of that financial discipline. I think there's real opportunity there, both in the short term and also in the long term. I also think that we need to be focused on a much more disciplined approach to capital allocation. We want to leverage those strong operating cash flows to pay down the debt. We are improving our net debt-to-EBITDA ratio. But as you, I'm sure, know, we're highly leveraged relative to our peers and we want to increase our operating flexibility going forward. As part of that, one of the things that we are going to be looking at more concretely is ROIC. We have been publishing that. That's a metric that I think is a really important metric for this company. And I think by increasing that, that really creates shareholder value, leads to shareholder value. Our current is 8.3, and I think that's something, longer term, I'm going to really be focused on improving that over time. And then finally, I spoke to it a little bit, our opportunity around optimizing our tax position. Again, I think that's one of the key opportunities. I think that's something that we're looking at over time. We haven't had a tax planning in the organization of any significance, and we're a primarily U.S. based company, but longer term, with the growth opportunities that we have in international, we think that we'll be able to have a nice dovetail there between our tax strategy and our growth strategies to lower that tax rate over time.

And we'll take our next question from Isaac Ro with Goldman Sachs.

Steve, maybe if you could spend a minute talking a little bit about how you guys are driving the x U.S. growth. And trying to get a sense of the infrastructure you put in place beyond the new leadership team and just some of the ways in which you could help us stay comfortable that this pace of improvement is sustainable?

I would say that the truth is, we're still on probably the top of the first inning, we're probably in the batter's box. Claus Egstrand Just started midway through the last quarter and if I'm candid with you, part of what he's going to do is rip a few things apart before he rebuilds and puts it all back together again. So I think he's been assessing the situation, sees clear opportunities to focus in specific geographies and specific franchises, and is really taking a franchise-based approach and a country-based approach to the efforts. And that's going to really start to build the infrastructure candidly this quarter, and really, next quarter. So I think it's going to be a build over time, as we look at it. But to underscore the opportunities, we are delivering nice growth in Europe. We did bring in a new head of our European business last year, and she's been doing a heck of a job driving that business. So I think that will be generating the shorter term growth, while he really then refocuses on Asia. And while everybody focuses a lot on China, we specifically have huge opportunities even in Japan. So big opportunities for us ahead. And I think what you'll see is, this is going to be a multi-year journey. Much like our tax strategy, a lot of what we're looking at is it's going to take a little bit of time as we build the right people and get everything in place.

That's helpful. And just maybe one follow-up, obligatory question on the overall volume environment, specifically the Surgical business. I'm just wondering how much in the environment, I mean, improvement, rather, you might attribute to things like weather, ACA versus underlying trend, versus share? It seems like to me, it's really more company-specific, but I'm curious about your views on the overall environment.

Any time we have an uptick, probably always my first default is to credit the external events. I think that did it. I would tell you though, I think our sales force in that division has really settled down. If you look back, go back to third quarter, fourth quarter, call it our fourth fiscal quarter last year and even our first fiscal quarter of this year, that surgical division was thinking it might be sold off, turnover was incredibly high. That team has really hunkered down and refocused on executing and I'm just incredibly proud of the leadership and at all levels of that organization and how they've really settled that team down and refocused on the customers. And we saw very nice continued progress in MyoSure and even the NovaSure declines starting to slow. And I think it's just a blocking and tackling of those extra sales calls every day and reenergized team there. So that's probably one of the ones we're most proud of.

And we'll take our next question from Mike Matson with Needham & Company. Michael Matson - Needham & Company, LLC, Research Division: You did a good job paying down a significant amount of debt so far this fiscal year, but I was wondering if you could tell us what sort of level you're comfortable with, I guess, on a leverage ratio perspective. And then what level of debt would you consider allocating some of your cash flow back to shareholders, either with buybacks or dividends?

Yes, Mike this is Bob, I'll take that. And so as I mentioned, currently, were at 4.2x. I would tell you that's too high. I think we've mentioned getting back into a more normalized and that would probably be in the 2.5x net debt-to-EBITDA ratio we've put out there. We think we can get there by fiscal year '17, and I think that, that makes sense. And I think until we do that and pay down, it's probably premature to talk about how we would distribute excess cash, but that will be something that we will be taking on over time. Michael Matson - Needham & Company, LLC, Research Division: And then just a question on the JAMA study. I'm just wondering, obviously got a lot of headlines. Do you view this as something that's more important in the clinical community, more important in the patient community or equally important in both areas? Because I know some of this data has sort of been out there in various forms, maybe not quite as visible though.

Great question, Mike. I think, really, both. There's still been the naysayers within the hospital purchasing community that have been able to kind of throw back. Well, we don't have any big studies, you got Oslo, you got Scottie, you got Rose, some little things here and there. I think we immediately are starting to see more interest, certainly from both the hospital community. And again, as you well know, because you're very familiar with capital purchase cycles, it's not like this quarter, sales are going to have this huge inflection point, but I think the momentum driving it is very good. The other piece that we literally saw that day was hospitals who were suddenly getting calls from patients starting to demand it. And I'd tell you one anecdote, we had some folks at a hospital I won't say, that had been very reticent and really was kind of going through the motions, I think, humoring our team and one more time. The meeting started at 10 a.m. that day and somebody came into the meeting and said they'd already gotten 6 calls from patients that morning, asking if that hospital had Hologic 3D mammo. So it clearly made for a better sales call than we otherwise would have expected. So I think it's both the patient awareness and I think we can do even more on that. The other anecdote in all of this is actually the OB/GYN community where we should be doing a better job of really educating that audience. We've been so focused on radiologists and the traditional users but as you know, we've got very nice sales forces calling on OB/GYNs. And a lot of the OB/GYNs hadn't really been very familiar with. So it's also something that we can leverage there. Again, given the size of that audience, that will take some time, but a study that's published in JAMA certainly has a lot of credibility with that audience as well.

And we'll take our next question from Richard Newitter with Leerink.

Steve, kind of just piggybacking off of that, can you talk a little bit about the capital equipment spend environment? Obviously, you're in a unique position, you have a differentiated technology to perhaps push you over the edge on some levels, but are you noticing any changes in the tone or the conversations with the administrators, their willingness to kind of prioritize capital? Can you comment there?

Not seeing any meaningful difference. It's clearly not the late '08, early '09 time period, so it's open up, but it's still fairly rigorous. I would say, I think in general, we're competing against a lot of healthcare IT in terms of capital investments coming from the hospitals. So we've really got to make our cases. And I think even our own sales team in that Breast Imaging business is getting better at making the economic arguments in addition to just the technical features and benefits of the products. So it's still a slog in some, the process has gotten a lot more layered, shall we say, in terms of the number of sign offs within an institution, but nothing meaningfully different, say, today versus, I'd say, even a year ago.

Great. And then just follow-up also on tomo. You mentioned that you're optimistic that the CPT code decision and the rates that are set will be helpful to your commercialization process in January of next year and going forward. Can you give us a sense of, are hospitals more concerned right now with perhaps not buying just because they don't want to be in front of that given uncertainty? What are the rates going to be? How is the paradigm of reimbursement for the whole 2D, 3D process going to change? Or is it the other way, are you noticing a pickup in discussions and willingness, and they want to get ahead of the CPT code that they know is coming one way or the other?

It's probably a little more of the former, though it's a combination of both. I think the lack of differentiation is a simple smokescreen and a simple objection that can be put up there. Frankly, given the incredible differentiation of this product, even we're challenging our sales teams, and a lot of our sales teams that have been selling it, are selling through that objection. I do think knowing there's something coming is helping get people a little more comfortable. And I think that extra certainty will be a nice additional, call it, accelerator to the curve.

And we'll take our next question from Jon Block with Stifel. Jonathan D. Block - Stifel, Nicolaus & Company, Incorporated, Research Division: Maybe first one, Steve, for you. On the international breast side, I asked last quarter, I think the business was down last quarter, and you pointed to a tough comp. But down again this quarter, and you mentioned pricing environment. So can you talk to maybe, the landscape over there? It's a different one from a competitive standpoint from what you're seeing from a pricing environment because I think when you mentioned pricing internationally, that was specific to Breast Health.

Sure. Very good question, Jon. I'd put it this way. We largely deal with the dealer network outside the U.S., and candidly, when you look at the performance of the company over time, I think we had developed a habit of allowing deep discounts at quarter end to get some extra revenue across the finish line. And we're in the process right now of saying, you know what, we're not going to do those deals. I think Bob has come in and my new team exerting a very different level of financial discipline that we're going to be willing to walk away from some deals that I think will come over time, but it's probably -- if you look, dare I say, we're never going to get into monthly reporting, but if you look at the months within the quarter, very different in the last month, dare I say, the last weeks of the quarter. And so I feel very good about where we will be going there. Jonathan D. Block - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, great. And maybe just a quick follow-up on surgical. Anything specific? I mean, I don't believe there was sort of an iteration for the NovaSure product line. Was it when you alluded to the guys hunkering down, has some of the dust settled from Affordable Care Act and what's free from sort of an IUD standpoint? And I guess where I'm going with this is, do you think that the worst is behind you and even though you might be fighting negative growth on NovaSure, we can see some stability going forward?

I do think the worst is behind us. We're clearly probably getting a little bit of a pop from the ACA, but that's cut both ways because IUDs are now covered. I really think this one is largely is coming down the sales execution, and being reminded that we've got 2 great products in the bag. And I think to some degree, there was probably a bit of infatuation with MyoSure, and we just kind of took our eye off the ball a little bit with NovaSure. And now, the team, I think, has really hunkered back down and realizing if we can just slow the declines on NovaSure, that also helps get them a lot of closer to hitting their quotas and really helps both. So I think that the leadership team there has really reengaged and refocused the team on remembering what a great product NovaSure still is, even if it's facing some general declines. So I think we'll still see some declines there in the U.S., but the rate of them seem to come down and then we're really trying to ramp up those businesses outside the U.S.

And we'll go next to Tycho Peterson with JPMorgan. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: Maybe a follow-up to Jon's first question there, just on pricing. In general, it seems like there's a broader strategy here to extract more price where you can. So maybe can you just comment beyond mammography, and where you see additional opportunities to extract price within the portfolio and maybe by geography?

Sure, Tycho. I would tell you the bulk of it is probably, really in the Breast Imaging business. I would love to say that it's broader than that, Bob. I'm not sure if you've seen anything else in your early days to say other big opportunities to extract price?

No, I would agree with you, Steve. I think like others, we are also seeing some pricing headwinds in some other areas of the business. And what we're trying to do is where we have the opportunity to extract that value as you talked about. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: When you commented -- go ahead, Steve.

No, you go. Tycho W. Peterson - JP Morgan Chase & Co, Research Division: You did comment on ThinPrep coming down, that's obviously been a trend for a while, but did you take a more significant step down this quarter and maybe just talk on within the market, what are you seeing vis-a-vis Roche getting the primary claim?

Sure, I think we're still seeing, in the U.S., fairly steady, it flips a little bit up and down. We can't say that we're slowing the decline yet in the U.S. on ThinPrep. And we still had a little bit of softness in China just as we're shifting to some dealers and some things on that front. So ThinPrep has continued to be a big headwind and I think it's important to point out if we didn't have that, that we'd be a lot more optimistic probably, about where we're going. But it's still a very profitable, high-margin business. It's going to be a headwind even in 2015 and so forth ahead of us but I think we're feeling it's still going down. We're working on trying to slow it and we're just not ready to declare that we're near the bottom yet.

And we'll take our next question from Anthony Petrone with Jefferies.

Maybe start with Breast Health, and then a quick follow-up on Diagnostics. Steve or Bob, maybe you can give us a sense of how much 3D mammography service revenue was a driver this quarter? Our understanding is that a lot of systems are beyond sort of that 1 year, 18 month mark in terms of being out of warranty. So how much of a driver was that this quarter and what do you expect in terms of 3D services when you look into next quarter and next year?

Bob, do we have the breakout of 3D versus 2D [indiscernible].

Yes, I don't think we're going to be prepared to talk to the breakout of our service revenue between 2D and 3D.

Yes, but I think it...

But overall, I mean, our service revenue, which is primarily, obviously, in our Digital Mammography business, grew 8.5% as I mentioned. That was helping drive the Breast Health. We see that as a very positive development, given the large installed base of digital mammography systems that we have. And while I'm not going to project going forward, we don't see that significantly dropping off.

No, it's helpful. And just a quick one on [indiscernible] maybe specifically on the Gen-Probe business. When Gen-Probe was acquired, the strategy really was to stay focused on women's health. And some of the business there have already been sold while others, such as say, oncology and respiratory have not. So maybe just an update on where you sit in the Diagnostics portfolio? Should we expect further asset sales or is that sort of where you like -- where the business should be at this point in terms of the portfolio?

Sure. I think we have that portfolio pretty well set at this stage now, so with what we have. By the way, to also answer a previous -- I realized I didn't answer the second part of Tycho's question around HPV and its link to this. We do continue to feel very good about co-testing. And therefore, ThinPrep I think, is still playing a very strong role in that going forward. And meanwhile, even though we don't have the primary indication for HPV, we feel good about the direction we're going there.

And we'll go next to Vijay Kumar with ISI Group.

Maybe on the first question, big picture on the Diagnostics side. High-single digits in the U.S. And first, I know that Aptima franchise sort of performed well, but I feel like that franchise in the last quarter, it wasn't great, but then now, it's back high-singles. What's really driving this? Was this the Quest contract? And how should we think about sort of the run rate on a go-forward basis?

Sure. Clearly, the Molecular business right now in the U.S. is being boosted by Quest. So were going to get a 4-quarter run on that and, therefore, we don't want to get too excited about exactly what that will be once that all anniversaries. We are feeling very good about HPV. We're making great strides there and I really like our trajectory there.

And maybe as a follow-up on that. I think one of your earlier comments in optimizing the back structure caught my attention. And can you walk through sort of this blocking and tackling? And given your revenue mix, like 75% in the U.S., where do you think the tax rate could go? How long is going to take? And can you think of anything else that could accelerate the process in decreasing the tax rates?

Vijay, this is Bob. I think we're still in the early stages, so I'm not going to get into specific numbers around when we think that the tax rate can go down, but rest assured that's something that is high on my agenda. What I would say is, with the opportunities that we're having around up and expanding our International business, there's a number of opportunities that we can do with looking at our footprint in redomiciling [ph] things like IP, and so forth. This is something that's going to take time. As you mentioned, we have 75% of our revenues in the U.S. and we're still growing our U.S. business. But this is something that we're going to be focused on and actually have already started doing some of the kind of the blocking and tackling, and that's why some of our G&A costs are actually high year-over-year, as we're starting to rationalize some legal entities to help prepare or pave the road for optimizing some of our tax structures going forward. So we're starting to do that. When we have a more concrete plan, we will share that with you.

Suffice it to say, it won't really impact even 2015.

That's a fair comment.

And we'll go next to Bill Quirk with Piper Jaffray.

So beyond the, call it, 1-year boost from Quest, certainly the diligence does suggest that customers that have maybe been previously looking at some alternatives are seeking or looking to stick with Hologic. So I'm curious, so what have you done organizationally to, I guess, improve your overall competitive dynamic within the existing team?

Sure. We've really got, I'd say, it's 2 things. It's that Panther instrument, which is just a dynamite instrument. Eric Compton and Bob, both as they came over -- Eric our Chief Operating Officer. I know when he first went out to San Diego and saw the Panther system was, dare I say, salivating and incredibly excited at what a good instrument it is. And our team, I think that's really the biggest part of the magic we got out of the Gen-Probe business. Combined with our sales leadership, we have -- I really like what our sales leadership is doing in that business. And if you think about some of the magic that we probably haven't talked about quite as much, but bringing the physician sales force, along with the lab sales force and getting them really working together to help support the labs, I think, is a competitive advantage for us that is starting to show and kick in a little bit. So again, it's really a sales execution story and sales leadership and rep story, along with the instrumentation.

Understood. And then as a follow up, and I recognize that we don't have a perfect crystal ball here, but any color on where you think the reimbursement might shake out for 3D? And then maybe asking in a slightly different way, where do think it has to be in order to help accelerate the overall adoption there?

I don't -- I think just -- it's almost -- this will sound like a cop out, but frankly, just getting it solidified, whether there was any differentiation or not, is enough that we ought to be able to sell the heck out of this product. This product is truly differentiated. And whether it becomes a small premium or medium premium, frankly, I don't think I want the investment community worried about a specific number. I would tell you, as I sit here, I worry people are going to peg a number and say gee, if it's above X or below Y, that it's not as meaningful. And at the end of the day, just having it quoted, we assume there will be differentiation, but we would also plan even worse case if it wasn't differentiated, but we still want to be able to drive this franchise incredibly well regardless of where it plays out. So I don't want to headline a #1 way or the other, and we ought to be able to drive it.

And we'll take our next question form Doug Schenkel with Cowen and Company.

So international surgical has been a real success story the last couple of quarters, really last 3 at least. I guess to move from baseball to football analogies, given that you and the new team are in Patriots country now, can you talk about what quarter you are in driving NovaSure and MyoSure growth internationally? And if there are ways to further leverage some of the successful o U.S. commercial efforts that have been ongoing?

I think we're still in the pre-season. There is years and years of growth ahead of us for our surgical business outside the U.S. and we're literally -- we're in the basics here of figuring out country-by-country, a reimbursement strategy and where we go. So it ought to be a very nice double-digit growth story for a long, long time. So if we play the one game, then we're clearly in the first quarter.

Okay. And then, I guess, this is sort of another pricing question but keeping in mind as we've talked about a little bit over the course of this call that there's been some new approvals in chlamydia and gonorrhea and of course, the recent Roche HPV label expansion. Are you factoring in any assumptions for incremental pricing pressure in Molecular Diagnostics in the fourth quarter? And that may be too quick, but as we think about 2015, as some of these new approvals competitively are coming about, should we be assuming that there is some incremental price? Is that how you're thinking about things?

Sure. Less about the fourth quarter, but I think we are concerned a bit about the pricing pressure in that space. It's getting more competitive, certainly and I think is one of the headwinds we will face going forward in the molecular business.

And we'll take our next question from Jayson Bedford with Raymond James. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Just a couple questions on the Diagnostics. In terms of the Quest rollout, how far along are you in realizing the benefits of this agreement? Meaning, are they 75% through the transition, more, less?

Yes, I would say we're -- this is Bob. So to follow that same analogy, I mean, we're pretty close to -- we've rolled it out, we've been very successful, we continue to see nice volume increases associated with our Diagnostics business. And as I mentioned, Quest is a portion of that. And we signed that about mid-year last year. And so, that ramp-up will start anniversary-ing itself, some in the third quarter this year, but more in the fourth quarter. Jayson T. Bedford - Raymond James & Associates, Inc., Research Division: Okay. And then just as a follow-up. Thinking about the impact of Panther to the Diagnostics franchise, are most of the devices you're selling pulling through incremental volume or are they cannibalizing the existing base?

It's bits of both but we're clearly getting some incremental business and a reasonable chunk of incremental, but we're also upgrading existing customers as well.

And we have time for only one more question. That final question will come from Jon Groberg with Macquarie.

So I guess, my main question is around CapEx side of things. At AACC, there's a hospital who just kind of off the cuff mentioned that there was a potential new tax law that would require hospitals to actually capitalize their instruments as opposed to getting the benefit of the reagent rental. I was just curious if that's something that you have dug into or know about? And if there's any kind of update there that you can share with us now that might impact the business?

I don't think we know much about that.

No, we haven't.

We're not sure. I haven't heard that.

By the way, we don't let [indiscernible] either.

Okay. That was just there was a big hospital chain who just mentioned something that I'm trying to dig at maybe into a little bit more. And then, I guess, for Bob. On the Roka side, what is the royalty now? And does it have the potential to be material or is it no longer material?

Yes, so we -- the royalties that we've received to date are de minimis. And actually, the details actually can be found on the Res 1. Our royalty rate was 12% and it has an option to go, depending on performance and the paydown, it could be to 8% and eventually, to 4%. But I would say, this is kind of a one-time. We haven't seen any material revenue associated with that royalty to date, and don't expect that this would have a material impact in '15.

Thank you. That is all the time we have for questions today. This now concludes Hologic's Third Quarter Fiscal 2014 Earnings Call. Have a good evening.